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C ontents
Introduction

About this report | 3 |

Strategy and performance

The w orld around us | 4 |
Our strategy | 6 |
Superior customer experience | 7 |
Sustainability at the heart | 12 |
How we are making the difference | 13 |
Our performance | 19 |

Our leadership and corporate governance

Our leadership | 23 |
Supervisory Board report | 26 |
Corporate governance | 39 |
Conformity Statement | 41 |

Risk management

Risk management at ING Bank | 42 |
Solvency risk | 50 |
Credit risk | 53 |
Market risk | 83 |
Funding and liquidity risk | 96 |
Environmental, social and governance risk | 100 |
Non-financial risk | 105 |

Compliance risk | 108 |
Model risk | 114 |
Business risk | 116 |

Consolidated financial statements

Consolidated statement of financial position | 119 |
Consolidated statement of profit or loss | 120 |
Consolidated statement of comprehensive income | 121 |
Consolidated statement of changes in equity | 122 |
Consolidated statement of cash flows | 125 |
Notes to the consolidated financial statements | 127 |

Parent company financial statements

Parent company financial statements | 218 |

Other information and appendices

Independent auditor’s report | 239 |
Articles of Association – Appropriation of results | 247 |
Risk factors | 248 |

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 2
About this report
ING’s purpose is empowering people to stay a step ahead in life and in business. In this report we describe
how we live up to this purpose and how we created value for our stakeholders over the year. When
assessing ING’s ability to create value in the short, medium and long term, stakeholders look at our financial
and non-financial performance.
In this report, the sections Strategy and performance, Our leadership and corporate governance and Risk
management together form the Report of the Management Board Banking. This annual report also contains
ING Bank N.V. consolidated and parent company financial statements, and other information.
Th is report is i ntended to inform stakeholder groups that have an impact on or are impacted by our
business. This includes customers, investors and shareholders, regulators and supervisors, employees,
government authorities and non-governmental organisations.
It aims to give our stakeholders a balanced overview of our activities and ING’s ability to create and sustain
value.
In this annual report, unless otherwise stated or implied by context, references to 'ING Bank' refer to ING
Bank N.V. and references to 'ING', the 'Company', the 'Group', 'we' and 'us' refer to ING Bank N.V. and its
consolidated subsidiaries.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 3
The world around us
Our business is closely shaped by what’s happening in the world around
us, from economic and political developments to the changing
regulatory environment, global trends and societal issues.
Stakeholder engagement
ING’s stakeholders are persons or organisations that may be directly or indirectly affected by our activities,
or who may have an impact on our activities or ability to provide products and services. Banks operate in a
heavily regulated environment. It is therefore key that we anticipate and understand the impact of
legislative and regulatory developments and assess their impact on our customers and business. New laws
and regulations should contribute to financial stability, sustain a competitive environment and enable us to
provide excellent quality services to our customers and to society as a whole. That’s why we participate in
the debate on the direction of public policy and regulatory developments in the European Union and the
countries where ING is active. We analyse proposed legislation to assess its potential impact.
We regularly engage with customers, investors, policymakers – banking regulators, supervisors, officials and
politicians – as well as NGOs, industry associations, think tanks, academics and other members of society.
When determining ING’s position, we weigh the interests of ING and all the stakeholders involved and seek
to strike the right balance between possibly conflicting viewpoints.
Next to having one-off consultations on specific topics, we engage in ongoing dialogues about our role in
society, our products and services, our business performance and other topics. This is done at both expert
level within our business units and at senior management and Board level.
Engaging with stakeholders also clarifies our approach to sustainability. Under the section ‘How we engage’
on ing.com, we explain how we do it, including collaborating, listening and by being transparent.
We contribute to various international initiatives such as the United Nations Environment Programme
Finance Initiative (UNEP FI) and the Net-Zero Banking Alliance. ING is a member of platforms such as the
Equator Principles Association and we use international frameworks such as the OECD Guidelines for
Multinational Enterprises and the UN Guiding Principles on Business and Human Rights to develop our
sustainability approach and priorities.
An overview of partnerships, memberships and endorsements is available at ing.com.
An ongoing dialogue with stakeholders can help to drive internal change at ING, including by enhancing our
environmental and social risk management policy and improving awareness of the wider impact of our
business conduct. Equally, ING can drive change by sharing subject-matter expertise with external working
groups and think tanks such as the RMI Center for Climate-Aligned Finance.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> The world around us
ING Bank Annual Report 2023 4
Our operating environment.
Geopolitical and economic events not only have a significant impact on
customers and individuals, but also on financial institutions like ING.
The global economy was lacklustre in 2023. A buoyant reopening phase, which drove GDP growth to well
above pre-pandemic levels, was followed by a weaker spell driven by higher inflation, geopolitical
uncertainty and a disappointing Chinese economy. Europe, being an open economy, suffered from this
weak global environment and the simmering impact of the energy crisis on industry, resulting in stagnant
economic activity.
However, inflation came down significantly in advanced economies, in part driven by lower energy prices, a
fading of supply-chain problems, and of course higher interest rates.
China had a weak 2023 due to underwhelming household consumption upon reopening of the economy,
continued problems in the real estate sector (which is still dealing with a debt overhang), and slowed
demand for production from advanced markets. The latter put pressure on industrial production and
exports.
The United States has been the positive exception, with resilient 2023 GDP growth. The US economy was
supported by continued high government spending, but also by consumers running down excess savings.
This, in turn, kept the job market roaring, which supported income. The effect of higher interest rates started
to show but did not curb economic activity too much. This drove the Fed funds rate to five-and-a half
percent and while a recession was expected, it did not materialise.
The US economy continued to perform well despite significant financial stress in the first half of the year.
The failure of several smaller American banks caused instability and forced governments and central banks
to take action. Eurozone banks were not significantly affected, but the industry did experience a degree of
financial stress. In Switzerland, this financial distress contributed to the emergency takeover of Credit Suisse
by UBS. Overall, monetary tightening had a significant effect on borrowing and deposit growth, but did not
result in a major downturn in activity in advanced markets.
The performance of the eurozone economy in 2023 was stagnant. Germany underperformed the eurozone
average due to a larger share of energy-intensive industries, which continued to suffer from higher energy
prices (despite a decline from 2022 peaks) and overall competitiveness problems. Eurozone consumers
struggled with the loss of purchasing power, with household consumption remaining below its late-2022
peak throughout the year.
However, the labour market remained strong in the eurozone and bankruptcies have not meaningfully
increased. The inflation rate also fell substantially, which caused the European Central Bank (ECB) to pause
interest-rate rises after raising the deposit rate to a record high of four percent.
In general, 2023 saw a smaller impact on the economy from geopolitical events than 2022. While global
risks did not abate, the impact of the Russia-Ukraine war had a more muted effect on advanced markets as
energy prices remained much more subdued and the Israel-Gaza conflict did not result in significant
spillovers to the global economy. Still, the effect on the eurozone was larger than in other major markets,
resulting in a weaker economic performance than peers like the US.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> The world around us
ING Bank Annual Report 2023 5
Our strategy
ING’s purpose is empowering people to stay a step ahead in life and in
business. Our strategy – making the difference for people and the
planet – is built around this purpose.
In a world that is constantly changing, we aim to be digital and sustainability pioneers, skilled at adapting to
the trends impacting our business. Our two overarching priorities are providing customers with a superior
customer experience (CX) and aiming to put sustainability at the heart of what we do. These priorities are
supported by four ’enablers’: providing seamless digital services, using our scalable technology and
operations, staying safe and secure, and unlocking our people’s full potential.
Providing customers with a superior experience
As an organisation, we need to be customer focused – after all, customers are who we’re here for, our
reason for being. We want to provide them with the products and services they need: executing payments
and other transactions, keeping and managing their money and savings and extending loans and making
investments. Our aim is to do all that with an experience that is easy, instant, personal and relevant. We
realise that different types of customers have different needs. We can make a difference by helping them to
plan for the future and make informed financial decisions, and by providing suitable financial products and
customised advice. Read more on how we cater to our customers’ needs, private individuals, small
businesses and large corporates in 'Superior customer experience'.
Putting sustainability at the heart of what we do
We have a role in society to define new ways of doing business that align with economic changes, growth
and social impact. Climate change is one of the world’s biggest challenges, threatening societies as we know
them today. We’re determined to be a banking leader in building a sustainable future for customers, society
and the environment. We want to lead by example by striving for net zero in our own operations. We also
want to play our part in the low-carbon transformation that’s necessary to achieve a sustainable future,
aiming to steer our financing towards meeting global climate goals and working with clients to achieve their
own sustainability goals. Read more on our sustainability efforts in the 'ESG overview'.
Our enablers
Providing seamless digital services
We know that we can serve our customers better if we use robust, ‘always-on’ channels, providing data-
enabled personalised experiences and end-to-end digitalising processes, with human intervention only
where needed or desired.
Using scalable technology and operations
A technology and operations foundation that is modular and scalable brings many benefits, including
support for providing a superior customer experience, increased safety, speeding up time-to-volume,
shortening time-to-market, and lowering cost-to-serve.
Staying safe and secure
For a bank, trust is the starting point, the most basic requirement for all stakeholders. People trust us with
their money and with their data, and keeping that safe is crucial. As a gatekeeper to the financial system,
we play an important role in the collective fight against fraud, cybercrime, and financial and economic
crimes.
Unlocking our people’s full potential
People are our greatest asset. We seek to attract, develop and retain the best people, and our sustained
success is founded on their continued commitment. What will unlock their full potential is our inclusive
Orange culture where everyone has the opportunity to develop and have impact for our customers and
society. In 2023, we focused on three pillars to deliver for our people: ‘talent & leadership’, ‘culture &
organisation’ and ‘Employee Experience’. Read more about how we unlock our people’s full potential in
'Social'.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Our strategy
ING Bank Annual Report 2023 6
Superior customer experience
We want to provide customers with an experience that is easy, instant,
personal and relevant. What this looks like depends on the type of
customer. For private individuals and small businesses, our emphasis is
predominantly on mobile banking, while for mid-corporate and
Wholesale Banking clients it’s all about personal relationships and
sector and network expertise.
What we strive for
In response to changing expectations in today’s always-on digital society, ING wants to offer customers an
experience that is easy, instant, personal and relevant.
Easy is about taking the complexity out of banking, making it intuitive, transparent and understandable so
customers feel confident. For example, we aim to clearly price products and services, avoid complicated
jargon and always be accessible.
Instant is about customers having solutions at their fingertips that put them in the driver’s seat of their
finances and make them feel in control by allowing them, for instance, to switch seamlessly between self-
service banking on the app and personal advice in a branch. Different groups of customers have different
requirements. For private individuals and some Business Banking clients (i.e. the self-employed and small
and medium-sized enterprises), the emphasis is on mobile, for both products and services.
Personal is about recognising customers as individuals and getting to know their needs, goals and
challenges so they feel valued. For example, to tailor messaging to their specific situation.
Relevant is about bringing value to customers, anticipating their needs, and proactively providing the right
insights, advice and solutions at the right time, making them feel empowered. For example, by guiding
them on important financial decisions, such as re-financing a mortgage in an environment of rapidly
increasing interest rates.
For Business Banking mid-corporates and Wholesale Banking clients, the emphasis remains on deepening
client relationships, offering deep sector knowledge and networking expertise, tailored products and advice,
supported by seamless digital delivery and services.
Retail Banking – Private Individuals
For customers using Retail Banking products and services, ING intends to provide a seamless digital, mobile-
led experience that’s easy, instant, personal and relevant. We want to engage with our customers on mobile
at every stage of their journey and give them personalised products and services based on relevant, data-
driven insights. Seamless end-to-end digital delivery of customer services is an enabler for a superior
customer experience to earn, and keep, the primary relationship.
Earning ‘primary relationships’ with customers is an important driver for profitable growth. It leads to deeper
relationships, greater customer satisfaction, and ultimately customers choosing us for more of their banking
needs. We want to be our customers’ first partner for their financial business. In Retail Banking, primary
customers have at least two active ING products. One of these should be a current account into which they
deposit regular income. In 2023, the number of primary customers increased by 750,000 over the course of
a year to 15.3 million. Particularly strong growth was achieved in Germany (+252,000), Spain (+129,000),
and the Netherlands (+99,000).
A seamless digital, mobile-led experience
Reflecting customer demand, we are continuously improving our mobile capabilities. In 2023, over 62
percent of customers used mobile banking only (mobile device login through the app or mobile device login
through the website), compared to 58 percent in 2022. High adoption of mobile banking is especially visible
in Türkiye (90 percent), Romania (84 percent), the Netherlands (69 percent), and Spain (66 percent).
In the Netherlands, Australia, Germany, and Spain, over 60 percent of new customers are now fully digitally
onboarded, due to continuous improvements in the mobile onboarding flow. Those improvements aim to
make digital onboarding available to as many new customers as possible. Similar efforts are underway in
other Retail countries.
More customers are using remote video advice and digital self-service channels. We can connect with
customers across multiple channels through ING’s cloud-based customer interaction platform for phone,
chat and video contacts. Our global customer interaction platform is used across seven Retail countries and
in Wholesale Banking to harmonise the experience and ensure customers receive the same services
everywhere. This year, we continued to expand the platform’s footprint, rolling out voice functionality in
Germany and Romania, and chat/chatbot capabilities in Italy. In total, the platform facilitated more than
100,000 video meetings and over 1.8 million authenticated chat conversations in 2023.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Superior customer experience
ING Bank Annual Report 2023 7
Daily banking and savings products
Everyday Roundup is a digital functionality that aims to make saving simpler, and it is now used by more
than 1.5 million customers in seven countries (Poland, Australia, Germany, Romania, Türkiye, Spain and,
since the fourth quarter of 2023, the Netherlands). It works by rounding up every transaction on a
customer’s current account and automatically transferring the difference to their savings account. In Spain,
we also connected Everyday Roundup to investment products to help customers who want to start
investing, little by little.
In March, ING in Australia introduced Everyday Roundup to Charity, becoming the first Australian bank to
launch a charitable round-up feature. This enables customers to round up eligible everyday card
transactions to the nearest dollar or five dollars and donate the difference to a charity.
ING in Germany expanded its current account to include a sustainable option. Customers of the so-called
‘Future current account’ pay one additional euro per month, and can choose between various social and
ecological projects that are selected in partnership with the social impact company share®. These projects
are supported by the amount equal to the monthly payment made by the customer. Additionally, a
sustainable use of deposits is earmarked to sustainability criteria defined by ING Germany. These take the
UN principles for responsible banking into account and are aligned with the EU taxonomy. By the end of
2023, 21,000 ‘Future current accounts’ were opened, resulting in more than €90 million in sustainable
deposits that are matched with sustainable loans and investments.
Dealwise, a smart shopping platform available in the app in Romania, Germany and Belgium, offers
personalised deals, supporting customers to save on their daily spending.
Mortgage products
In Belgium, we launched the HomeHub functionality – a new online journey that takes the customer
through the mortgage application process in just four steps, including a conditional approval. A customer
can now simulate this process using the Quick & Easy Simulator, as well as make an appointment using the
recently launched Call me back flow. Customers can get an overview of required documents and check the
status of their application via the HomeHub.
In the Netherlands, orientating customers who have made an appointment via mobile app or web can now
digitally prepare for their appointment by uploading documents based on a personalised document list.
In Belgium and Romania, digitalising partial repayments simplified this process for customers, enabling
them to make changes online to reduce a monthly charge and/or reduce the duration of a loan. This gives
our clients more control of their financing without hassle. In Belgium, these digitalisation efforts led to over
98 percent of early repayment requests being processed automatically or with minimal manual effort (only
one simple check by the employee). In Romania, customers who visit an ING office monthly to make an
early repayment with loan duration reduction can now make the same changes online.
ING in Poland introduced a fully digital process for customers that apply for a change to their mortgage
agreement. In the second half of 2023, almost all customers (>99 percent) conducted the change of the
mortgage tenor online. Additionally, since the fourth quarter of 2023, customers in Poland can also change
their repayment account and/or repayment date online.
Investment products
ING customers have access to smart digital investment tools to make investing accessible. Leveraging the
Dutch investment platform, entry products Easy Invest and Self Invest are now also available in Belgium.
Easy Invest is the most basic product for clients with no experience of investing independently. It consists of
an online risk assessment that helps clients choose the risk level they can tolerate when starting to invest in
one of ING’s mutual funds. Self-Invest is ING’s online brokerage platform offering a wide selection of
international equities for clients to invest in directly by themselves.
In Germany, our self-execution investment tool is serving more than two million clients. Additionally, our
clients in Germany can make use of our robo-adviser, offered in partnership with online wealth manager
Scalable Capital.
Insurance products
ING works together with several insurance partners in various markets to offer our customers compelling
insurance products, based on local customer needs. We offer insurance related to bank products as well as
a range of standalone non-life insurance policies. We enhanced our insurance proposition in 2023, for
example, by launching car insurance in Spain, improving our home, car, health and travel insurance in the
Netherlands, and adding pet insurance to our product offering in Türkiye.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Superior customer experience
ING Bank Annual Report 2023 8
Retail Banking – Private Banking & Wealth Management
Private Banking & Wealth Management offers banking services and personalised wealth management to
affluent and (ultra) high-net worth individuals and their entities in the Netherlands, Belgium and
Luxembourg. Through dedicated relationship managers and the support of product specialists and account
management, Private Banking aims to give customers access to a diverse range of products and services
suited to their needs. This includes tailor-made and standardised investment advice based on
comprehensive financial planning. We have been awarded best private bank in the Netherlands by PWM/The
Banker (a Financial Times magazine) and in the MT1000 ranking.
In 2023, the Netherlands introduced investing in private markets, allowing wealthy customers (from €2.5
million in advice/discretionary portfolio management) to invest in, for example, private equity, private credit,
and infrastructure. ING works closely with renowned international players in this regard. Private markets’
importance in the economy is increasing worldwide, and adding our services fits in with ING Private
Banking’s ambition to serve customers even better with innovative investment solutions.
In Belgium, we introduced a new concept of family business events. Over 12 events, 600 family business
owners were invited to exchange views on the transition of a family business to the next generation. Our
customers appreciated these events, combining both the business and private wealth needs.
Retail Banking – Business Banking
The Business Banking segment covers the following three sub-segments:
Self-employed and micro companies: Independent professionals or small companies that employ up to 10
people and have a turnover up to one million euros.
SMEs: Small to medium-sized companies that employ between 10 and 250 people and have a turnover of
between one and 10 million euros.
Mid-corporates: Sophisticated larger companies employing more than 250 employees with a turnover of
between 10 million and 250 million euros.
Business Banking serves customers in seven markets: the Netherlands, Belgium, Luxembourg, Poland,
Romania, Türkiye and Germany. Our customers are focused on managing and growing their businesses
profitably in an ever-changing and increasingly complex environment. Our goal is to support them through
relevant, seamless, trusted and personal financial solutions in key moments.
We apply a needs-based customer segmentation approach that differentiates between basic, and more
complex and/or specific needs. This enables customers to ’self-serve’ using our strong digital foundation but
also access remote and face-to-face advice, when needed.
We are therefore advancing our digitalisation roadmap to create a seamless customer experience by
digitalising key customer journeys: from onboarding to customer in life, and from lending solutions to daily
banking and payments. We have placed emphasis on critical customer journeys, including digital
onboarding in the Netherlands, Belgium, Poland, and Türkiye. Furthermore, we offer instant and fast-track
lending solutions in the Netherlands, Belgium, Poland, Romania, and Türkiye to cater to our customers’
lending requirements. These solutions have significantly enhanced our end-to-end digital rates for lead-to-
cash and customer-acquisition journeys.
For more complex and specific needs, especially for bigger SMEs and mid-corporates, we offer customised
relationship banking. This not only covers tailored solutions and advice, but also sector expertise and access
to ING’s international network.
Customer Experience (CX) day
As part of ING’s focus on continuous improvement of the customer journey, we hold an annual customer
experience (CX) day. On 28 September, ING held its fourth global CX day where over 8,000 colleagues from
across the bank, together with customers, put their collective minds together to come up with tangible
ideas to delight our customers and make their experiences easy, instant, personal and relevant. The event
attracted employees from Retail Banking, Wholesale Banking, ING Hubs, and support functions all around
the world. Together, they identified over 400 improvements to delight our customers, some of which were
created and tested on the day.
Measuring NPS
One of the ways we measure our ability to deliver a superior customer experience is through the Net
Promoter Score (NPS). The NPS indicates whether customers would recommend ING to others. We compare
our NPS to selected peers in each market.
Our ambition is to achieve a number one NPS ranking in all 10 of our Retail markets. In 2023, ING ranked
number one in five of our 10 Retail markets: Australia, Poland, Germany, Romania and Spain. ING ranks in
the top three in another four markets: the Netherlands, Luxembourg, Italy and Belgium (all ranked third). In
Australia, Belgium and Italy, ING’s NPS improved versus last year, while Germany, Romania and Spain
maintained their strong NPS.

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> Superior customer experience
ING Bank Annual Report 2023 9
We ran a separate NPS programme in 32 Wholesale Banking markets throughout 2023, to ensure a broad
coverage of our client base. ING’s relationship NPS score rose to an all-time high of 72 (on a scale of -100 to
+100), compared to last year’s score of 67. All regions showed an increase in NPS and response rate, with
the latter rising from 71 percent to 76 percent overall. The number of detractors decreased from 54 to 33.
The NPS result aids our efforts to continuously improve our customer service and product offering.
Wholesale Banking
ING’s ambition is to provide corporate clients and financial institutions with the financial solutions they need
across their value chains. Underpinning our work is the ‘ING difference’, three major characteristics that offer
value to clients:
1. Our global reach, with local experts: no matter where clients are, our network of experts offers them a
seamless local experience with a global view.
2. We’re sector experts: clients trust us to provide tailored solutions to meet their needs.
3. We’re sustainability pioneers: we’re not just leaders in sustainable finance; we work hand-in-hand with
clients to address some of the most pressing issues in the world today.
ING’s Wholesale Banking business line network covers three regions: EMEA, APAC and the Americas. To bring
our local experts closer to clients, we focused on hiring more talent for client-facing teams in 2023 – such as
for our trade and commodity finance team in Switzerland, our sustainable finance team in Asia, and our
investment banking team in the Netherlands.
Wholesale Banking clients benefit from our deep sector knowledge of over seven sectors and 29 sub-sectors,
including: commodities, food and agriculture; corporate sector coverage; energy; infrastructure and real
estate; financial institutions; technology, media, telecom and healthcare; transport and logistics. Together
with our target sector research capabilities and our client segmentation model, we aim to help clients
navigate the highs and lows of economic cycles, providing them with relevant advice, data-driven insights
and customised, integrated solutions that support their business ambitions.
As a large wholesale bank, with billions of euros flowing through our balance sheet, ING aims to play an
important role in accelerating our clients’ transitions to net zero by 2050. In addition to the financial support
and incentives we provide, we help and advise clients by putting our sector expertise, international network,
climate-action experience and other sustainability-related insights to work for them. This includes our Terra
approach, which uses science-based and sector-agreed pathways for getting our in-scope sector portfolios
in sync with reaching net zero by 2050, and guides us in making business decisions that aim to accelerate
the transition. To better assess the climate performance of our clients and use these insights to identify risks
and opportunities for supporting them in their transitions, we have developed a bespoke ‘client transition
plan’ tool. This online platform is where we have started to centrally collect, assess and monitor the publicly
disclosed climate transition plans of each client. For more information on Terra and the client transition tool,
see ‘Environment’.
Our support comes in the form of financing too. In 2023, we saw €115 billion of volume mobilised and closed
792 sustainability transactions. One example is the green loan provided by ING as sole bank for the
implementation of RetuRO Sistem Garantie Returnare, an important circular-economy project in Romania.
The loan will finance the set-up of regional centres, which will aim to collect, sort and prepare more than six
billion returned plastic, glass and metal beverage packages for recycling each year.
In 2023, ING won the Euromoney Award for Best Bank for ESG in Germany, as well as five awards at the
Global Finance Magazine Sustainable Finance Awards. These included the global award for Outstanding
Leadership in Sustainable Bonds for the third year running, three regional awards in Western Europe for
Outstanding Leadership in Sustainable Finance, Sustainable Bonds and ESG-related Loans respectively, and
a country award for Best Bank for Sustainable Finance in the Netherlands. Our client segmentation model
aligns our strengths with client needs and plays an important role in deepening relationships. ING’s way of
working allows us to respond rapidly to our clients’ changing needs, and to close the gap between local and
global specialists, making an impact in our markets.
Strengthening our foundations
As part of our efforts to strengthen our product foundations, we continued to develop our proprietary
platform, InsideBusiness, in 2023. This included setting up alerts for payments, improving user verification to
comply with local anti-money laundering regulation, and making it easier to download lending notices,
among other updates. Additionally, we rolled out real-time instant payments in the Netherlands, Germany,
Italy, Luxembourg and Portugal, and digitalised the account-opening journey in the Netherlands, Germany
and Belgium.
To further streamline and simplify the infrastructure in our Financial Markets business, we continued to
enhance our digital ecosystem in 2023, from introducing new process automation, APIs and algorithms
across sales and e-trading to providing better pricing, greater stability, and more insights.
Following the creation of our dedicated Payment & Settlements Services (PSS) organisation in 2022, we
continued to implement strategic change within Transaction Services in 2023 by laying the groundwork for
a new structure that took effect on 1 January 2024. This includes a separation of commercial product
management activities from delivery activities, enabling us to evolve our product offering to deliver
competitive and seamless digital solutions for clients at pace, amid a rapidly changing macroeconomic
environment.
We established Capital Markets & Advisory (CMA) in 2023 as the single centre of excellence for our advisory
business and related financing globally across Wholesale Banking. We want to be the strategic partner for

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> Superior customer experience
ING Bank Annual Report 2023 10
our clients in transformational moments in the boardroom and also accelerate our capital velocity
deliverables. Under CMA, we’re upgrading and refocusing our commercial engine, including selective senior
hires, to ensure we have the right capabilities to support our clients throughout their lifecycle.
Finding new ways to help customers stay a step ahead
ING is proud of its innovative culture and considers this an important contributor to a superior customer
experience. To keep surprising customers in a fast-moving competitive environment, we need to keep
finding fresh ways to translate emerging trends and technologies into new business opportunities.
Therefore we also experiment with new and emerging technology (e.g. digital assets, generative AI),
translating it into bite-sized use cases, with central oversight.
For incremental-type innovations that support our strategic priorities of CX and sustainability, such as
digitalising processes, we believe this is best done within individual business lines (Retail, Business Banking,
and Wholesale Banking) where we are closer to the customer.
Blacksmith was established in 2017, as part of ING Labs Singapore, and offers a single platform to digitalise
and automatically apply policy requirements to KYC processes. It also delivers standardised and actionable
customer due diligence (CDD) files. In 2023, Blacksmith reduced ING’s time spent on desk research as part of
the CDD process by 48 percent. This removed a lot of the manual work for analysts, who must typically
collect data and analyse how its attributes are risk rated according to ING policies. Blacksmith also
onboarded Skandinaviska Enskilda Banken (SEB) to digitalise the KYC processes for financial institutions.
Also in 2023, ING sold Invisible Tickets, a next-gen ticketing and payment solution that allows commuters to
pay for the cost of travel using their mobile phone, to Tata Consultancy Services (TCS), which is part of
India’s largest multinational group. TCS will be taking the Invisible Tickets solution to the next level by
introducing it to railway and public transport operators around the globe.
XLINQ is an enterprise software development and SaaS platform with a unique technology to generate
secure and compliant software automatically from business knowledge captured. ING Labs served as an
incubator for XLINQ, which spun out of ING in June 2023. ING retains a warrant to become a minority
shareholder and is a client of XLINQ in several ING countries. XLINQ has two big corporate clients in the
financial services and energy sectors that use its platform to develop reliable software faster with lower
costs.

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> Superior customer experience
ING Bank Annual Report 2023 11
Sustainability at the heart
ING’s purpose is empowering people to stay a step ahead in life and in
business. This also means helping customers and society to stay a step
ahead of the challenges they’re facing. Climate change is one of the
world’s greatest challenges. Also, people may struggle with inequality,
poor financial health, or a lack of basic human rights. There’s a growing
sense of urgency and rising expectations that governments and
businesses must help tackle these challenges.
ING aims to put sustainability at the heart of what we do, defining new ways of doing business that align
economic growth with positive environmental and social impact.
Our priorities are as follows:
Climate action: This is our main focus. We want to lead by example by striving for net zero in our own
operations. We aim to play our part in the low-carbon transformation that is necessary to achieve a
sustainable future, steering the most carbon-intensive parts of our lending portfolio towards reaching net
zero by 2050. Read more on ING’s climate action in 'Environment'.
Collaboration: We work with clients to achieve their own sustainability goals, increasing our impact through
partnerships and coalition-building. Read more in 'ESG overview'.
C limate-related, environmental and social risk: We manage the most relevant environmental and social
risks. We also contribute to positive change by supporting clients that seek continuous improvement in
environmental and social practices. Read more in 'Environment'.
Financial health and inclusion: We’re working to advance financial health and inclusion for customers and
communities. Read more in 'Social'.
Empowering colleagues: We empower colleagues to contribute to it all, for example by providing them with
the right knowledge and training. Read more in 'Social'.
ING’s sustainability efforts have been recognised externally by environmental, social and governance (ESG)
rating agencies and other benchmarks. In 2023, Sustainalytics assessed our management of ESG material
risk as ’strong’. Also in 2023, investment research firm MSCI awarded ING an AA ESG rating for the fourth
consecutive year.
As society transitions to a low-carbon economy, so do our clients, and so does ING. The low-carbon
transition cannot happen overnight. Even though we finance a lot of sustainable activities, we still finance
more that's not, which is a reflection of the current global economy and how far the world still needs to go.
Our approach follows data and science, and evolves as the available science evolves. We want to be part of
the solution and strongly believe we can make the most impact by engaging with clients, talking to them
about their climate goals, and helping finance what they need to reach them.
While we are committed to doing our part, we know that the world’s problems cannot be solved by one
sector, much less by one bank. We specifically call on governments and regulators to guide the transition
more firmly. They have to help answer the question "What does ’good’ look like?". We believe an inclusive
approach is the best way to make a meaningful impact. From climate to human rights and financial health,
we seek to increase our impact through partnerships and coalition-building

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> Sustainability at the heart
ING Bank Annual Report 2023 12
How we are making the difference
ING is making the difference by concentrating on two overarching
strategic priorities: giving customers a superior experience and putting
sustainability at the heart of what we do. To put these into practice,
and to make that difference for all customers, we have defined four
enablers: providing seamless digital services, using scalable technology
and operations, staying safe and secure, and unlocking our people’s
full potential.

1. The 2022 comparatives have been adjusted, reflecting the enhanced process as further explained in the next paragraphs.
Providing seamless digital services
In a world where accelerating digitalisation is one of the main global trends impacting banking, customers
are spending more and more time online. That’s why we want to make their lives easier by giving them a
seamless digital service.
Customers deserve an easy, instant, personal and relevant experience at every touchpoint, from the way
we communicate and onboard them to how we provide products and handle customer requests. ING
facilitates this by developing, maintaining and enhancing personalised, reliable digital services that aim to
be available 24/7.
Developing, maintaining and enhancing these basics gives us the foundation for providing a superior
customer experience. By digitalising key customer journeys, we are enabling a superior customer
experience at a reduced cost-to-serve, while measuring impact through NPS and cost efficiency. In 2023,
our Digi Index Score was 71.2 percent. The Digi Index concerns a figure that reflects the average of straight-
through processing (STP) rates of key customer journeys that are handled without manual intervention.
The previously reported Digi Index Score was based on scores from countries that included global and local
processes. Global processes are aligned and consistent throughout countries, while local processes could
differ slightly per country. Starting from the first quarter of 2023, the Digi Index has been ’rebaselined’ to
enhance consistency and comparability. Currently, only 33 global processes are used as a baseline, and
local processes have been eliminated. All STP processing has been updated retrospectively, meaning
comparative figures have been adjusted and are based on the 33 global processes. The unadjusted 2022
Digi Index Score amounted to 64.4 percent and, as a result of the rebaselining, the adjusted 2022 score
amounts to 66.8 percent. Our previously reported aim of reaching a Digi Index Score of over 75 percent by
2025 has not been adjusted.
Individual customers increasingly only use the mobile channel. For them, our emphasis continues to be on
mobile and further improving our mobile capabilities.
In 2023, 77.4 percent of our communication was personalised. We use data analytics and machine learning
to personalise digital services for customers. Personalising customer interactions helps customers make
more informed financial decisions and supports mobile sales, while also reducing the need for customers to
use other channels. Given the importance of data for offering personal and relevant services, data security
and privacy protection are crucial.

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> How we are making the difference
ING Bank Annual Report 2023 13
Data analytics
ING uses advanced data analytics to help achieve both superior customer experience and sustainability
priorities, making the difference for customers, colleagues and society.
Handling calls better by further digitalising our contact centre processes plays a significant role in driving a
better customer experience. In 2023, ING’s Analytics team implemented speech analytics as a metric tool in
the Netherlands and Belgium, providing generated insights into the root causes of contact centre calls, and
helping ING to improve its digital journeys in the app and website. In parallel, ING has further promoted
virtual assistants. These work to provide more precise answers to address customer FAQs, resulting in active
bots in the Netherlands, Belgium, Spain, Poland and Türkiye, handling up to 45 percent of the incoming chat
volumes.
For Retail and Business Banking, ING’s Analytics team has developed acceptance and affordability models in
the lending process with the goal to improve customers’ digital experience and to ensure we are safe and
secure. In the Netherlands, the artificial intelligence-based lending models enabled instant loan decision and
granting within a few minutes instead of days, achieving a higher acceptance ratio by three percent while
keeping the same risk level. In Germany, the use of transactional data based on customer consent has
allowed for the redevelopment of the consumer loan models. This has led to a notable increase in loan
production and approval ratings, helping the business to provide services to more eligible customers.
ING has also used analytics to reduce advertisement blindness (where consumers consciously or
subconsciously ignore advertisements) to improve relevancy, and enable hyper-personalisation. In 2023,
pivotal enhancements to ING’s recommendation engine resulted in highly personalised campaign
management and, eventually, higher customer engagement. We’ve updated the underlying model to a
deep-learning method, helping us tailor our offerings to better meet customer needs. Meanwhile, real-time
processing has been enabled to address customers’ needs instantaneously.
In Wholesale Banking, advanced analytics has helped the front office in their preparations for client
interactions, ensuring our colleagues can provide better ideas and ask relevant questions at relevant times.
For example, we use the entity-matching model, which uses a name-matching algorithm to identify our
own clients in datasets, even if the data is not perfectly organised. Using just a small amount of information,
it helps us better understand how our clients behave within our network.
The Analytics team continued to focus on improving the customer due-diligence (CDD) process for
Wholesale Banking, leading to a clearer process for our clients and eliminating the need to ask related
questions in person.
More broadly, the team continued to provide support to protect our customers and the bank against
increasingly sophisticated fraud attempts, such as impersonation scams, through AI-based detection
models.
Additionally, ING, as a partner of the Kickstart AI foundation in the Netherlands, hosted a hackathon with
the foundation in 2023 to boost progress of the Allow More initiative. Based on existing research by the
Dutch government, up to 15 percent of those who are eligible for a financial allowance don’t claim it. Allow
More aims to help individuals identify whether they may be eligible for these allowances. This can
encourage more people to use the available help, which could improve the financial situation of many
people in the Netherlands. As a result of the hackathon, analysis and model development based on the
method generated during the hackathon will be followed across a few banks.
On top of the existing models, ING’s Analytics team continues to improve the customer experience by
exploring new technologies. ING recognises the potential of generative AI (GenAI) and we are taking a
prudent and responsible approach to doing this in a safe and secure way. To better learn about both the
opportunities and risks, we explored opportunities in two areas with a central oversight: Customer contact
(like chatbots and transcript analysis) and software engineering (to write code or fix bugs).
As an example, we piloted LLM (large language models) technologies to improve our chatbot performance
and help customers. The first phase of the pilot came to a close in 2023 with promising customer
satisfaction and deflection improvements – the rate at which our alternative channels and self-service
resources fulfil demand. These experiments have shown there is value in incorporating GenAI into our
processes. In 2024, we will expand our GenAI explorations into a few selected areas: KYC, marketing content
generation and early warning systems. Application of GenAI technology in these domains has the highest
potential to transform our business processes and contribute to our ambition of a superior customer
experience.
Scalable technology and operations
Reflecting our role as a digital-first bank and to enable a superior customer experience, ING believes that
scalable technology and operations foundations are key requirements. We have therefore made this an
integral part of our strategy. Standardisation and automation give us a shorter time to market, quicker time
to volume, consistent and higher quality, and improved productivity. Scalable technology and operations
also help us attract and retain talent by offering employees the opportunity to not only work with
technology but also collaborate across countries and make an impact globally. Scalable technology allows
ING to create specific and local propositions that serve our customers, while leveraging ING’s scale when it
comes to engineering, security, and data experts.

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ING Bank Annual Report 2023 14
Scalable technology
Our scalable technology strategy provides a foundation for the modular components we use to build and
operate propositions. It allows ING countries to introduce propositions quickly and easily, while providing the
opportunity to add local flavour.
Our scalable technology is divided into three parts: ING’s private cloud infrastructure (IPC), our engineering
pipeline (OnePipeline), and our banking technology platform, with its extendable and reusable services and
components. Given the flexibility and scalability of public cloud technology in general, ING has chosen a
hybrid cloud strategy, i.e., using public cloud providers in addition to IPC. Cloud computing is an important
component for scaling our digital capabilities. IPC is where we store and manage applications and data such
as channel applications, core banking systems and other banking applications. We measure IPC adoption by
the percentage of physical cores – also known as processing cores or CPU cores – in IPC compared to the
total number of physical cores in ING data centres globally. By the end of 2023, 63 percent of all physical
cores in ING were on IPC (2022: 52 percent). By the end of 2025, we expect that figure to have risen to at
least 70 percent.
OnePipeline, our continuous integration and delivery pipeline, provides engineers with a consistent and
secure global capability to develop, test and deploy software. OnePipeline’s key features are being
compliant, secure and reliable. In addition, the platform allows for simple ways of collaboration between
multiple teams. We invest heavily in infrastructure, test and risk automation. At the end of 2023, 62.9
percent of applications were onboarded to this pipeline (2022: 48 percent). We measure the pipeline’s
adoption by the number of applications onboarded to the pipeline (used to develop and deploy to
production), compared to the total number of applications registered in our IT management platform across
all ING entities. Our ambition is to have 90 percent of applications on OnePipeline by 2025.
Touchpoint is part of our banking technology platform. Touchpoint provides a set of reusable shared
services, freeing up capacity for engineers to create more value for customers and employees. By using
these shared platform services like an authentication service or Engagement suite, engineers can realise
business solutions like Instant Payments and Open Banking quicker and easier. We measure the Touchpoint-
enabled customer online traffic using the Touchpoint authentication, represented by the number of
Touchpoint-enabled unique customer authentications against the total ING number of unique customer
authentications. At the end of 2023, approximately 64 percent of customer logins used Touchpoint (2022:
approximately 60 percent). By 2025, we expect that figure to increase to 84 percent.
Digital access
In a digital society, customers expect to have round-the-clock access to digital channels, including their
banking services. To live up to their expectations, we strive to provide uninterrupted access to our banking
services, while allowing for scheduled maintenance and downtime. In Retail Banking in 2023, our digital
channel availability for the Netherlands and Belgium was 99.56 percent.
ING’s Chief Technology Office has been diligently working on the identification and analysis of the root
causes of major incidents experienced in 2023. Based on the outcome, we took measures to strengthen our
reliability. For example, we started a reliability programme across the Tech organisation, including an
extensive training for all Tech employees, with the aim of strengthening the overall resilience of our
channels.
For Wholesale Banking clients worldwide, the availability for our Inside Business payments channel and for
our Inside Business Connect channel (file transfer) was 100 percent. These figures are based on outputs of
availability monitoring processes, which are run with a high frequency per hour.
Payment & Settlement Services
The Payment & Settlement Services organisation (PSS), part of the CTO (Chief Technology Office), covers the
full scope of payment and settlement services for Retail and Wholesale Banking.
Our scalable tech and ops provide PSS with high-quality and efficient payment, settlement, and open-
banking services, leveraging our scalable payment and settlement solutions. As of 2023, PSS processed well
over four billion transactions through our central payment engines.
We aim to further consolidate most of our payment services on this platform, improving quality and
reducing price per transaction.
Scalable operations
Our scalable operations are driven by digitalisation and capability hubs, focusing on becoming fully STP,
leveraging expertise and using scale, and sharing productive, quality services across the ING network.
Capability hubs provide shared services and solutions across ING worldwide. The hubs are mainly located in
the Netherlands, Poland, Romania, Slovakia and the Philippines. In 2023, 34 percent of operations were
carried out with the support of these hubs, compared to 32 percent in 2022. Our aim for 2025 is to have the
hubs carry out at least 50 percent of the operational work.
By digitalising client contacts, accelerating remote advice, and increasing the use of chatbots, we reduced
inbound contacts to contact centres by 18 percent in 2023 (versus 2021). We aim for 30 percent less in 2025
(versus 2021). Similarly, by automating and centralising our know-your-customer (KYC) activities this year,

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ING Bank Annual Report 2023 15
we reached 58 percent of KYC workforce in our hubs and expect to increase that to 60 percent by 2025
through more consolidation, automation and straight-through processing.
Staying safe and secure
Trust is the starting point, the most basic requirement, for all stakeholders. That’s especially true for a
digital-first bank like ING. People trust us with their money and their data. Keeping these safe, and
maintaining this trust, is crucial. See also ‘Risk management’.
Risk appetite framework
The risk appetite framework (RAF) combines various financial and non-financial risk appetite statements
(RAS) into a single, coordinated approach, to provide the business with a clear overview of the relevant risks
and the tools to manage them. These tools include the boundaries and instruments set for each risk type
that help to manage the risk appetite. This view allows the EB, the MBB, and senior management to pursue
ING’s business strategy in a safe, secure and compliant way while meeting regulatory requirements at all
times. See also ‘Risk management’.
Anti-money laundering and KYC
Knowing who we do business with helps to protect our clients, ING and the financial system against financial
economic crimes. As part of our continuing anti-money laundering (AML) efforts, we screen customers,
carry out due-diligence checks, and monitor transactions for unusual or suspicious activities. In 2023, we
strengthened our KYC by enhancing our global way of working. Read more about KYC and AML in
’Compliance risk’ in ’Risk management’.
Cyberthreat landscape
Cybercrime remains a continuous threat to companies and to financial institutions in particular.
Ransomware is one of the prime threats, with phishing the most common way that attackers gain access to
a company’s system or network. Phishing is also used to plant information-stealing malware or for drive-by
download attacks – the unintentional download of malicious code to users’ computers or mobile phones.
Other high-ranking threats are attacks against availability, or Distributed Denial of Service (DDoS) attacks,
used against the financial sector and digital services operators for reputational damage and/or extortion.
Different types of cyberthreats are not only relevant for the financial industry, but are increasingly hitting
their supply chains. ING continues to invest in cybersecurity capabilities in all domains (prevention,
detection, response and recovery). See also ‘Non-financial risk’.
Cybersecurity incidents
No cybersecurity incidents with criminal intent were identified on ING IT infrastructure in 2023 that met the
ECB cyber-incident reporting thresholds.
However, in June 2023, a third-party bank account switching service suffered a breach that affected ING
customers in Germany. This involved a customer data leak for private customers who, when opening a
current account with ING, used the German legal account change assistance (Gesetzliche
Kontowechselhilfe). German banks are legally obliged to support private customers in moving their account
from the old to the new bank in this defined generic process. ING in Germany informed authorities and
affected customers about the incident and provided safety instructions and contact options to further
protect personal information.
Preventative measures
Being cybercrime-resilient is a high priority. We continuously test our IT and IT organisational resilience, and
perform crisis management and red-team exercises to improve our response to DDoS and targeted attacks.
Cybersecurity risks from suppliers are monitored and mitigation is initiated where needed. ING maintains a
strong global cybercrime alliance within the financial industry and government institutions to monitor
trends.
ING recognises the value of an effective regulatory framework and is in favour of cybersecurity
requirements being responsive to actual cyberthreats. The adoption of threat-led penetration testing in the
EU’s Digital Operational Resilience Act, which also ensures continuity of business, is a good example. Testing
critical systems on real-life threats helps entities to gain insights. Our staff awareness and training
programme is regularly updated with the latest cybercrime trends and prevention measures.
We have a responsible disclosure procedure for security researchers that may find issues in our business
applications or infrastructure. See also ‘Non-financial risk’.
Identity and access management (IAM)
Identity and access management (IAM) is an important element in our control framework to prevent and
mitigate the risk of unauthorised access to IT systems and the data processed and stored therein. ING has
IAM global processes and controls in place which are periodically reviewed and tested. See also ‘Non-
financial risk’.

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> How we are making the difference
ING Bank Annual Report 2023 16
Fraud landscape
Types of fraud are also evolving. As the digital world continuously changes, fraudsters have become more
international and their modus operandi more complex. Customers are being deceived in increasingly
sophisticated ways. Online fraud has become a societal problem and in several countries, banks have
collaborated with governments, law-enforcement entities, and other sectors to find innovative ways to
prevent and detect fraud. ING continues to play an important role in preventing and detecting fraud in the
digital world and wants to minimise the impact of fraud losses and the number of fraud victims.
We recognise this transformation in the fraud landscape with developments high on our agenda. We have
improved our ability to monitor and react to fraud incidents and to adapt quickly to new fraud methods. By
using innovative technology, data analytics and IT solutions, we’re better able to identify suspicious
activities. We are increasingly collaborating with peers and other relevant sectors, such as
telecommunications companies.
In 2023, the Fraud organisation was made part of the Global KYC organisation. Joining the two allows us to
draw on combined knowledge and experience, which can help keep ING and our customers safe and secure.
Read more in ’Risk management’.
Data privacy, protection and ethics
In its capacity as a global financial institution, ING processes personal data belonging to our customers,
employees, suppliers and business partners. They trust us with confidential and personal information, so it’s
important that we maintain that trust and keep this data safe from loss or misuse. This is part of our
commitment to ensure safe and transparent banking practices, including in how we manage personal data
in an environment that’s increasingly open and interconnected. ING is bound by European and local data-
protection laws, which can differ from country to country. For more information on how ING has globally
implemented its personal data protection measures, see ’Compliance risk’.
As ethical standards evolve over time, we closely monitor regulatory compliance and potential new
requirements to gain an ’outside-in’ view on data ethics. This includes legislation for new trends, like artificial
intelligence.
Everything we do is guided by ING’s Orange Code, which describes the values and behaviours that underpin
our way of working, and which puts integrity above all. Building on the Orange Code is ING’s Global Code of
Conduct. Its 10 core principles provide more detail on our main values. These help to give greater balance to
ING’s decision-making, as we weigh up different relevant factors. We’ve developed supporting
methodologies for this purpose, like Orange Code decision-making, which allow us to arrive at decisions that
are considerate and well informed. As such, ethics routinely plays a significant role in all our decision-
making. Read more in ’Governance’.
To provide further protection, we actively encourage employees to speak up when they are confronted with
unethical or illegal behaviour. Through a variety of reporting channels, like managers, persons of trust, or
ING whistleblower reporting officers, concerns can be reported. ING also has external whistleblower
channels. We take great care to protect the identity of those who report concerns, which they can do
anonymously, as well the confidentiality of their reports to protect them against potential retaliation. We
believe that trust, integrity and ethical behaviour are at the core of any reliable business. They go hand-in-
hand with satisfied customers. Read more in ’Compliance risk’.
Unlocking our people’s full potential
‘Unlocking our people’s full potential’ is a key enabler of our strategy. We are making the difference through
the skills, expertise and actions of our 60,000+ people worldwide. We attract, develop and retain the people
and skills we need at all levels by offering the opportunity to make a global impact and to belong to a
friendly, collaborative and inclusive company. Fostering such an environment is made possible through our
Orange Culture, built on the values of honesty, prudence and responsibility. These values are aligned to the
Orange Behaviours our people exhibit: ‘you take it on and make it happen’, ‘you help others to be
successful’, and ‘you are always a step ahead’. We see the effect of this throughout our business, but in
particular in our levels of retention and in our Organisational Health Index (OHI), which is part of our
continuous-listening approach.
We use the OHI to get an ongoing sense of how our people feel and we make sure to act on their feedback.
We held two pulse OHI surveys in 2023. In May, we had more than 46,000 employees participating, and all
our priorities saw improvements globally, particularly strategic clarity. The second pulse took place in
October. We received feedback from 77 percent of employees, making this our highest-ever response rate.
We sustained the gains from May, which indicates our focused efforts led to sustainable improvements
across our OHI priorities.
Using these data points, together with external trend research and internal needs assessments, in 2023 we
reviewed our people strategy and are focusing on three pillars to further unlock our people’s full potential:
’talent & leadership’, ’culture & organisation’, and ’employee experience’.
Talent & leadership
ING has an abundance of internal talent and a strong culture of developing our people. We offer everyone
the opportunity to develop their business, technical and leadership skills, and we’re opening up new avenues
for them to do so. For example, we have a wide range of academies that deliver specialist professional
development. These are complemented by our leadership curriculum, as part of which we launched the
leadership accelerator in 2023. As a result, our people are building the right skills to thrive in the future.

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> How we are making the difference
ING Bank Annual Report 2023 17
Culture & organisation
Our culture of diversity, inclusion and belonging continues to improve. Since 2019, we have been guided by
our 70 percent principle, in which we aim for no group or level to be comprised of more than 70 percent of
the same age, nationality or gender. Our culture & organisation pillar takes this further, with the mission to
make sure that ING is a place where everyone, regardless of background or identity, can thrive and realise
their full potential. We do this by embedding inclusion and equity in all our people processes and by having
specific gender-diversity targets for which the Executive Board and Management Board Banking are
accountable. We look at indicators such as the number of women in senior management positions, which
amounts to 31 percent at year-end 2023, up from 29 percent at year-end 2022.
We also continue to build a vitalised culture and organisation that foster healthy performance. We support
our people by offering hybrid working so that they have the autonomy to better balance their professional
and personal lives. Some 77 percent of our employees are working hybrid (one to four days in the office,
based on self-reported data). We care about giving our people this flexibility, and it is highly valued by our
employees, helping us attract and retain great talent. Alongside this flexibility, we offer a competitive total
reward package, and strong learning and development opportunities. This is reflected in our people offer,
which creates clarity on what we offer, and what we ask in return.
Employee experience
We want to free up people’s time so they can focus on making the difference, which is why we aim to make
our employee experience as easy, instant and relevant as our customer experience. In 2023, we made good
progress, with more than 70 percent of our people now covered by our global people management systems,
enabling them to process employee transactions on their mobile devices. We also started a broad cross-
functional initiative to reduce bureaucracy and make services easier to use for employees. For example, in
the Netherlands, we reduced the number of notifications and approval steps on HR-related processes from
more than 16,000 to 6,000 per month. In 2024, we plan to further automate HR documents in major
countries such as the Netherlands, the Philippines and Germany.
For more on unlocking our people’s full potential, see 'Social'.

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> How we are making the difference
ING Bank Annual Report 2023 18
Our performance
Financial Developments
2023 was characterised by ongoing challenges, as economic sentiment weakened, geopolitical
uncertainties persisted, and inflation remained elevated. In these circumstances, we delivered very strong
results with net profit almost doubling to €7,157 million.
Our interest income benefited from the positive rate environment and expense growth was limited, despite
inflationary effects on staff expenses and continued investments in the growth of our business. Risk costs
declined considerably and were well below the through-the-cycle average, reflecting the quality of our loan
book and our prudent credit risk management.
Total income increased 21% to €22,401 million. Next to a positive rate environment, this was supported by a
growing primary customer base and an increase in lending and deposits. In Retail Banking, we added
750,000 primary customers to reach a total of 15.3 million. Especially Germany, Spain and the Netherlands
contributed to this growth. Net core lending growth (which is the increase in customer lending adjusted for
currency impacts and excluding Treasury and the run-off portfolios) was €8.6 billion in 2023, including €8.0
billion growth in our mortgage portfolio in a challenging housing market. Our diversified customer deposit
base was resilient. For the full-year 2023, net core deposits growth (which excludes FX impacts and
movements in Treasury deposits) totalled €10.6 billion, driven entirely by Retail Banking.
Net interest income (NII) increased 15% to €15,809 million, as we benefited from positive interest rate
environment. This was particularly visible in a strong increase of the liability NII. This increase was somewhat
offset by continued subdued loan demand, which impacted our lending NII. In addition, NII for Treasury and
Financial Markets declined, but in each case this was more than compensated in other income. Net interest
income in 2022 had included a €-343 million impact from new regulation in Poland for mortgages and a net
TLTRO impact of €-87 million. ING’s full-year net interest margin rose to 1.55% in 2023 from 1.34% in 2022.
Excluding the impact of the Polish moratorium and TLTRO, the net interest margin showed an increase of 17
basis points year-on-year.
Net fee and commission income was flat on previous year, at €3,586 million, despite a strong growth in
primary customers and pricing initiatives for payment packages. This is fully explained by limited demand
for mortgages, which led to lower mortgage brokerage volumes, and low trading levels in investment
products.
Total investment and other income jumped to €3,006 million in 2023 from €1,215 million in 2022. This was
driven by strong results for Treasury and higher trading results in Financial Markets (both partly offset by a
lower net interest income). Other income in 2022 had included a hedge accounting impact of €-288 million
and €165 million of impairments on our stake in TTB (TMBThanachart Bank), partly offset by a €125 million
gain from the transfer of our investment business in France, a €67 million gain from a legacy entity in
Belgium and €38 million related to the sale of a non-performing loan portfolio in Spain.
Operating expenses increased 3.3% to €11,563 million. Expenses in 2023 included €1,042 million of
regulatory costs, a decline of €208 million year-on-year due to a lower contribution to the Single Resolution
Fund and because 2022 had included a €99 million contribution to the Institutional Protection Scheme in
Poland. Furthermore, expenses in 2023 included €247 million of incidental items, largely related to
restructuring provisions and impairments, compared with €325 million of incidental items in 2022. Expenses
excluding regulatory costs and incidental items increased by 6.8%. This increase was mostly driven by the
effect of high inflation on staff expenses, while we also continued to invest in our business. The cost/income
ratio improved significantly in 2023, to 51.6%, compared with 60.4% a year earlier.
Net additions to loan loss provisions dropped to €520 million, or eight basis points of average customer
lending, from €1,861 million (29 basis points) in 2022. Our strong asset quality and robust approach to risk
management resulted in limited new defaults and this was combined with effective recoveries. A net
addition of €533 million on our Russia-related exposure in 2022 was followed by a net release of €218
million in 2023, mainly as a result of continued reduction of our Russia-related exposure.
The effective tax rate in 2023 was 28.4%, down from 31.4% recorded in 2022 which had included non-
deductible impairments on TTB and higher non-deductible expenses in various countries.
The return on IFRS-EU equity increased to 17.5% in 2023 from 8.2% in 2022.
Retail Banking
Total Retail Banking
During 2023, customers continued to put their trust in us. This was evidenced by an increase in both
customer lending and deposits, and by a growth of 750,000 in the number of primary customers, which
provides us with further opportunities to deepen our client relationships.
Retail Banking recorded strong results in 2023, with net result increasing 64% to €4,667 million. The result
before tax increased 70% to €6,753 million from €3,964 million in 2022, as a 24% growth in income was
coupled with only a limited increase in operating expenses, while risk costs slightly declined.

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> Our performance
ING Bank Annual Report 2023 19
Net interest income increased 28% to €11,459 million, mainly reflecting higher net interest income on
liabilities following a rapid increase in interest rates. Furthermore, 2022 had included €-343 million impact
from the impact of the Polish mortgage moratorium and €-123 million net TLTRO impact after the
unwinding of our TLTRO-related derivative position.
Net fee and commission income declined 1.6% to €2,337 million, as higher daily banking fees (thanks to an
increase in payment package fees and new service fees) could not fully compensate for a decline in fees
from investment products (due to subdued trading activity) and for lower fees from mortgage brokerage.
Total investment and other income increased by €442 million, mainly attributable to Treasury, which
benefited from favourable market opportunities through money market and FX transactions; this increase
was partly offset in net interest income, where the funding costs of these transactions were recorded. Other
income in 2022 had included €-55 million of exceptional items, consisting of €-247 million to unwind a
macro fair value hedge in Belgium, partly offset by €125 million income from the transfer of our investment
business in France and a €67 million gain from a legacy entity in Belgium.
In 2023, total customer lending rose by €8.1 billion to €459.8 billion. Adjusted for currency impacts, Treasury
and the run-off in Westland Utrecht Bank, Retail’s lending book rose by €9.7 billion. The bulk of this growth
(€8.0 billion) was in residential mortgages, mainly in the Netherlands, Australia and Germany. Total
customer deposits increased to €585.5 billion from €566.2 billion in 2022. Excluding FX impacts and
Treasury, deposits growth was €18.5 billion in 2023, primarily driven by Germany, Spain and Poland.
Expenses excluding regulatory costs increased 5.2% to €6,938 million, as the impact of high inflation on
staff expenses, reflected in CLA increases and indexation, was partly offset by savings from exiting the
French and Philippine retail markets and by lower incidental item costs. Expenses in 2023 included €131
million of incidental items, largely related to restructuring provisions in Belgium, Poland and Germany. In
2022, incidental item costs had amounted to €233 million, primarily for restructuring (mainly in Belgium
and France) and for compensation related to consumer credit products in the Netherlands. Regulatory costs
declined by €185 million due to a lower contribution to the European Single Resolution Fund and because
2022 had included a €99 million contribution to the Institutional Protection Scheme in Poland. The cost/
income ratio improved to 51.2% in 2023 compared with 62.1% in 2022.
Net additions to loan loss provisions for Retail Banking were €607 million in 2023 (compared with €639
million a year earlier) and with 13 basis points of average customer lending remained well below the
through-the-cycle average. Risk costs in 2023 were mainly recorded in Belgium, Poland and Germany.
Retail Netherlands
The result before tax of Retail Netherlands increased 42% to €2,861 million from €2,014 million in 2022. This
was mainly driven by a 19% increase in total income while operating expenses were broadly flat and risk
costs were minimal.
Net interest income was €3,096 million, or 7.2% higher than a year earlier, supported by a strong increase in
liability margins. This was partly offset, however, by lower Treasury-related interest income (compensated
in other income), reflecting activities to benefit from favourable market opportunities through money
market and FX transactions.
Net fee and commission income rose by €67 million, or 7.5%, supported by higher fees for payment
packages and new service fees. Investment and other income increased by €528 million, driven by much
higher Treasury-related income (that was partly offset by lower net interest income).
Net core lending (which excludes Treasury products and a €0.4 billion decline in the Westland Utrecht Bank
run-off portfolio) grew by €2.3 billion, as €2.6 billion growth in the mortgage portfolio more than
compensated for a €0.3 billion decrease in other lending. Customer deposits (excluding Treasury) declined
by €1.6 billion, partially due to a shift from deposits to assets under management.
Operating expenses amounted to €2,135 million compared with €2,115 million in 2022. Excluding €38
million lower regulatory costs and €75 million of incidental item costs in 2022 (related to consumer credit
products), expenses rose by €133 million or 7.4%. This was primarily due to higher staff expenses, reflecting
the impact of a new collective labour agreement in 2023, and restructuring provisions.
The net addition to loan loss provisions was very low at €5 million, down from €67 million in the prior year.
Limited net additions in 2023 for the mortgage portfolio, including the impact of a methodology update,
were almost fully offset by a net release for the business lending portfolio.
Retail Belgium
The result before tax for Retail Belgium (which includes ING’s retail activities in Luxembourg) jumped to €661
million compared with €223 million in 2022. The strong increase was mainly due to growth in net interest
income and the impact of one-off income items in the year before.
Total income rose by €536 million, or 25%, to €2,683 million. Net interest income increased by €395 million,
or 24%, as higher income from liabilities more than compensated for the impact of lower margins on
mortgages due to higher funding costs.

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> Our performance
ING Bank Annual Report 2023 20
Net fee and commission income slipped 1.8% from a year earlier as higher fees on investment products,
reflecting an increase in assets under management, were offset by lower daily banking fees due to higher
fees paid to brokers. Investment and other income in 2022 had included an impact of €-247 million to
unwind a macro fair value hedge and a €67 million gain from a legacy entity. Excluding the aforementioned
two items, investment and other income declined by €31 million, mainly reflecting lower Treasury-related
income.
Customer lending (excluding Treasury) rose by €1.4 billion, equally split over mortgages and other lending.
Customer deposits (excluding Treasury) declined by €1.3 billion, mainly due to customers buying retail
bonds issued by the Belgian government and a shift to assets under management.
Operating expenses were €1,852 million, up 3.7% on the year before. This included €76 million of incidental
item costs related to restructuring and a further optimisation of the branch network, while 2022 had €97
million of incidental item costs. Expenses excluding regulatory costs (which were €33 million lower year-on-
year) and incidental items increased 8.4%. This was mainly due to the impact of automatic salary
indexation on staff expenses.
The net addition to the provision for loan losses amounted to €169 million, or 18 basis points of average
customer lending, up from €139 million in 2022. The increase year-on-year included the impact of model
updates for the mortgage and consumer lending portfolios in 2023.
Retail Germany
The result before tax for Retail Germany almost doubled to €1,790 million compared with €901 million in
2022, mainly on the back of a 45% increase in total income. This was driven by a 72% growth in net interest
income, supported by higher liability volumes at significantly improved margins, and by an increase in
interest income from treasury-related products and mortgages.
Net fee and commission income declined 18% to €357 million. This reflected a decrease in fees from
mortgages (due to lower brokerage volumes) and from investment products (due to a lower number of
brokerage trades). Investment and other income decreased by €136 million, largely due to lower Treasury-
related revenues.
Net core lending growth (which excludes Treasury) was €1.7 billion, consisting of €1.4 billion growth in the
residential mortgages portfolio and €0.3 billion growth in other lending. Customer deposits (excluding
Treasury) increased by €8.5 billion following successful promotional campaigns to attract new savings and
customers.
Operating expenses rose 9.0% to €1,243 million. This included €96 million of regulatory costs (up €3 million
from 2022) and €20 million of incidental items for restructuring costs and staff allowances (compared with
€10 million in 2022). Excluding regulatory costs and incidental items, cost growth was 8.7% due to higher
staff expenses related to annual salary increases, and higher marketing expenses and investments to
support business growth.
Net additions to loan loss provisions declined to €119 million (12 basis points of average customer lending)
and were primarily related to consumer lending.
Retail Other
Retail Other consists of the other Challengers & Growth Markets. Following a change in governance, the
Asian stakes (our investments in Bank of Beijing and TMBThanachart Bank) are reported in Corporate Line as
of 2023 (with a profit before tax of €185 million), whereas previously they were reported in Retail Other.
Comparable data have been adjusted accordingly.
Retail Other’s result before tax increased 75% to €1,441 million, from €825 million in 2022, mainly thanks to
higher interest income and lower regulatory costs.
Total income rose 16% to €4,233 million. Net interest income was up 26% to €3,437 million, supported by
improved margins on liabilities in a higher interest rate environment, and because 2022 had included a
€-343 million impact from the introduction of the Polish mortgage moratorium. This more than
compensated negative currency impacts and tighter lending margins.
Net fee and commission income declined by €16 million, or 3.0%, mainly due to lower fees on investment
products. This reflected subdued trading activity and the impact of ING’s exit from the French retail market
in 2022. Investment and other income in 2022 had included €125 million income from the transfer of our
investment business in France to Boursorama (with another €14 million recorded in 2023 for the final
settlement) and €38 million of proceeds from the sale of a non-performing loan portfolio in Spain. Excluding
these specific income items, investment and other income increased by €49 million, mainly due to higher
Treasury-related income.
Net customer lending growth (adjusted for currency effects and Treasury) was €4.3 billion in 2023, with
growth in all countries, but particularly in Australia. Net core deposits growth (also excluding currency
impacts and Treasury) was €12.9 billion, primarily driven by net inflows in Spain and Poland.
Operating expenses in 2023 amounted to €2,479 million. This included €36 million of restructuring costs and
impairments, mainly for Poland. By comparison, 2022 had included €51 million of incidental item costs,
mainly restructuring costs for France and the Philippines. Excluding these incidental items and much lower
regulatory costs (as 2022 had included a €99 million contribution to the Institutional Protection Scheme in
Poland), expenses increased by €102 million or 4.9%. This was mainly due to inflationary pressure on staff

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> Our performance
ING Bank Annual Report 2023 21
expenses, partly offset by savings following the discontinuation of our retail activities in France and the
Philippines, and FX impacts in Türkiye.
The net addition to loan loss provisions amounted to €313 million, or 29 basis points of average customer
lending, compared with €302 million in 2022. Risk costs in 2023 were primarily attributable to net additions
in Poland and Spain, with Poland including €67 million for adjustments to the expected future cash flows of
CHF-indexed mortgages.
Wholesale Banking
In 2023, Wholesale Banking recorded strong results as higher income and significantly lower risk costs led to
a 93% increase in result before tax, to €3,836 million. Net profit more than doubled to €2,875 million
compared with €1,358 million in 2022. In 2023, the Wholesale Banking business was supported by strong
capital management, which included steps to de-risk our portfolio and improve our book quality, for
instance via sales initiatives and ongoing management of underperforming risk-weighted assets (RWAs).
Wholesale Banking posted double-digit income growth to come out at €7,057 million, up 12% from €6,325
million in 2022. This was mainly driven by a 30% increase in income for Daily Banking & Trade Finance,
particularly in Payments & Cash Management, Bank Mendes Gans and Working Capital Solutions, all of
which benefited from the higher interest rate environment. And we managed to grow our income from
Trade Finance Services as we continued to support the activities and initiatives of our clients. Income from
Trade & Commodity Finance declined as volumes were under pressure, reflecting lower commodity prices
and lower economic activity.
In Lending we focused on further optimising our capital usage while decreasing risk-weights, prioritising own
origination of high-quality loans. Average asset volumes decreased, reflecting the weaker economic climate
and a continued reduction of our Russia-related exposure. This was more than compensated by a slightly
higher interest margins and a 5.3% growth in fees and commissions, lifting total income for Lending 2.1% to
€3,224 million. Combined with a 7.0% reduction in risk-weighted assets, this led to a significant
improvement in income over average risk-weighted assets.
Financial Markets' income increased by 4.4% to €1,280 million. They recorded strong trading results,
especially in Rates and Credits, as these desks benefited the most from market volatility and good client
flows. In addition, fee income was up by 55%, mainly reflecting higher Capital Markets issuance income.
Income from Treasury & Other increased by €121 million to €401 million, driven by higher income from
Corporate Investments and Corporate Finance. The prior year had included high mark-to-market gains from
credit default positions but also a €-41 million hedge accounting impact in Belgium and a net TLTRO impact
of €-51 million.
Total operating expenses increased 6.4% to €3,313 million. Excluding lower regulatory costs and €17 million
of restructuring costs (versus €10 million of incidental items recorded in 2022) expense growth was 7.6%.
This reflected the impact of collective labour agreements, higher performance-related payments and
strategic investments for business expansion.
In 2023, a net release of €92 million from loan loss provisions was recorded compared to a net addition of
€1,220 million in 2022. Risk costs in 2022 had been significantly impacted by the Russian invasion in
Ukraine, which then led to a net addition of €533 million on our Russia-related exposure. In addition, 2022
had included an increase in Stage 3 individual risk costs, partly as a result of a more negative
macroeconomic outlook. In 2023, €218 million of provisions for our Russia-related portfolio could be
released, mainly due to a reduction of our exposure. Moreover, Stage 3 risk costs were limited in 2023 as
additions for specific files in the real estate portfolio were largely offset by recoveries from previously
provisioned files and secondary market sales.

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> Our performance
ING Bank Annual Report 2023 22
Our leadership - members of the Management Board Banking
The management of ING at board level substantially contributes to ING's governance. Our Management
Board Banking (MBB) is overseen by our Supervisory Board.
We aim for a balanced composition of these boards, consisting of a diverse selection of people with
knowledge, skills and executive experience, preferably gained in the banking sector, in corporate
governance of large stock-listed companies and in the political and social environment in which such
companies operate.
There should also be a balance of experience and affinity with the nature and culture of the business of ING.
The boards play a role in setting and promoting the culture, underlying values & behaviours and code of
conduct that aim to run our business in a way that contributes to sustainable long-term value creation for
our people, our customers, our shareholders and society.
To contribute to the above ING has a matrix structure combining hierarchical and functional lines that work
together to achieve a common goal, with dedicated roles and responsibilities and mechanisms for
delegation, decision making and escalation.
ING’s risk governance safeguards the functioning of the matrix structure and is based on the three lines of
defence model (3LoD), which has segregated duties and independent internal control functions. Each
defence line has a specific role and defined responsibilities and they work closely together to identify,
assess, mitigate and monitor risks. The first line of defence lies with the heads (or delegates) of ING’s
banking business, support functions, geographies and countries; the second line with the risk management
and compliance functions; and the third line with the internal audit function. Read more on ING’s risk
governance and three lines of defence in 'Risk management'.
Read more on ING’s risk governance and three lines of defence in 'Risk management'.

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> Our leadership
ING Bank Annual Report 2023 23
Our leadership - members of the Supervisory Board

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> Our leadership
ING Bank Annual Report 2023 24
Our leadership - members of the Management Board Banking

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> Our leadership
ING Bank Annual Report 2023 25
Supervisory Board report
During 2023, the Supervisory Board (SB), in its statutory and advisory
capacity, focused on a number of operational elements, ranging from
comprehensive risk management across a broad spectrum to climate-
related matters as defined by Terra. In addition, the SB has, during the
year, focused on resilience of the organisation with respect to
operational and technology platforms, and Human Resources, both in
terms of succession and talent management/recruitment.
The SB has a number of committees which prepare discussion and
decision items. The SB committees play a significant role in supporting
the SB in its oversight and supervisory activities, allowing the SB to
operate effectively. With respect to strategy, both strategic intent and
execution are a normal part of the discourse between the SB and the
CEO.
The SB has an active and continuous dialogue with the Management Board Banking (MBB) where it
challenges and advises on the strategic and enabling priorities. For more, see 'Our strategy'. The SB
acknowledges the responsibility it has to consider and balances the interests of all stakeholders of ING. It
makes sure to take this into account while delivery on the strategic priorities is being executed.
Highlights of 2023 Supervisory Board meetings
During 2023, the SB discussed a wide range of topics. In its deliberations on the various topics, the SB
considers the customers’ and other stakeholders’ interests in view of ING’s role in society. The highlights of
the SB meetings are outlined below.
Closely monitoring the macroeconomic environment
The year 2023 was marked by uncertain market conditions with high inflation and implications for ING's risk
costs and RWA as a result of market volatility. The operating environment was marked by high inflation,
increasing interest rates, tightening monetary conditions, geopolitical tensions and an energy crisis on the
back of the Russia/Ukraine crisis, specific uncertainties in certain areas such as Poland and Türkiye, and the
ending of the TLTRO and tightening of financing conditions. The SB closely monitored those macroeconomic
developments in 2023 and discussed the consequences for ING's operations, including higher income of
liabilities and mitigating measures for risk costs and RWA. Specific updates were provided on the movement
on the financial markets as a result of macroeconomic trends.
Scalability and resilience of ING's technology & operations
To put ING's strategy into practice, one of the key enablers is scalable Technology and operations. Scalable
technology and operations is driven by digitalisation and the capability of ING Hubs, leading to a superior
customer experience and a reduction of the costs-to-serve. The SB closely monitored the targets for 2023
with regard to Scalable Technology and Operations. The aim is to achieve scalable technology and
operations that provide for a superior customer experience, while preventing technological failures, and if
they occur, undertaking remediation activities and addressing root causes. The SB has a general and
continuous focus on operational resilience. In addition to the updates on operational resilience, the SB
regularly discussed the availability and reliability of ING's channels, including the remediation activities
undertaken by (senior) management and root causes for set-backs in availability and reliability of channels .
Not only do scalable technology and operations require available and reliable channels, they also require
systems that are safe for use for clients and employees. For that reason, cybersecurity has warranted
further attention in 2023.

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ING Bank Annual Report 2023 26
Succession matters, people development and diversity & inclusion
In addition to frequent reviews by the Nomination and Corporate Governance Committee and the SB of the
MBB and SB composition and succession planning, the SB regularly discusses broader people development
and diversity & inclusion matters with the MBB. This includes topics such as the organisational health within
ING, focussing on the alignment within the organisation on common goals, strategy and culture, and in
particular the work environment within ING. For 2023 some of the root causes for lower scores were
discussed, including the impact of ongoing Collective Labour Agreement negotiations. A specific topic that
was addressed last year was 'Unlocking people's full potential', which is a critical enabler for ING's 'Making
the difference' strategy. It should ensure an inclusive culture where everyone has the opportunity to
develop and have impact for ING's customers and the society. In discussions with HR and the MBB the focus
is talent & leadership, culture & organisation, including the bank-wide diversity and inclusion approach, and
on operational excellence. Plans to develop, attract and retain diverse talent have been part of those
discussions, as well as the gender pay gap analysis and gender targets.
ESG-related matters, including sustainability, climate risk and the energy
transition
Another core pillar of ING's strategy is putting sustainability at the heart of everything we do. Management
of climate and ESG risks is a priority for ING. The SB oversees these topics and challenges where necessary.
Recurring topics on the agenda of the SB include reports from the ESG Committee on ESG-related matters.
Apart from the recurring topics, ESG-related matters, including sustainability and climate risk, are
intertwined in many other discussions and topics the SB oversees. An example of this is the (strategic)
updates on ING locations that are regularly discussed in the SB of which ESG-related topics form an integral
part. In addition to the regular agenda items, deep dives and training sessions were also organised. This
included separate sessions on the E, the S and the G of ESG, but also sessions on stakeholder engagement
and ESG within specific business lines. ESG topics that have an overlap with other committees were covered
as joint sessions. For example, a joint session on the impact of climate risk on several parts of ING's
residential mortgages portfolio was organised for the ESG Committee and Risk Committee, and a joint
session on ESG (regulatory) reporting and disclosures took place with the ESG Committee and Audit
Committee.
AML enhancement with embedded eﬀective KYC processes
In 2023, the SB continued to be updated regularly on developments regarding KYC and relevant items were
discussed in more detail to ensure sufficient progress was made to achieve the successful completion of the
KYC Enhancement Programme. Operational effectiveness was achieved by end 2023 with an effective end-
to-end KYC lifecycle control framework, validated by the second line of defence and audited by the third line
of defence.
Progress is monitored by and discussed between the SB, the MBB and the relevant supervisors.
Continuous dialogue with stakeholders
At ING we seek out open dialogue and maintain continuous interaction with our stakeholders, responding to
their views and concerns, driving increased collaboration. We aim to strike a balance between the interests
of all stakeholders, including customers, shareholders, employees, regulators, supervisors and society at
large. In 2023, the SB had periodic conversations with various stakeholders, including our shareholders,
employees, supervisors and the MBB. A specific topic that ING actively engaged on with investors and other
stakeholders, including regulators, was the update of the SB remuneration policy. The proposed updated EB
and SB remuneration policy will be presented for shareholder approval at the 2024 AGM. The SB exercised its
oversight role, which aimed to ensure that actions resulting from these conversations were embedded in
the organisation and were followed up effectively. Examples of topics covered in 2023 in this respect are
cybersecurity, availability and reliability of ING's channels, climate risks, sustainability, ESG, remuneration
and ING’s KYC enhancement efforts.
The dialogue between ING and external supervisors and regulators was a regular agenda item for the SB
throughout the year. This included several discussions between the SB and the MBB on the results of and
follow-up to the annual Supervisory Review and Evaluation Process (SREP), through which the ECB aims to
promote a resilient banking system as a prerequisite for a sustainable and sound financing of the economy.
The SREP involves a comprehensive assessment of banks’ strategies, processes and risks, and takes a
forward-looking view to determine how much capital each bank needs to cover its risks.
Supervisory Board meetings
In addition to the topics mentioned above, the SB discussed and monitored, among others things:
• Progress of ING’s performance in the various countries and business lines on key financial and non-
financial metrics;
• Ongoing supervisory developments, such as the European Central Bank’s SREP and related matters such
as the internal capital adequacy assessment process (ICAAP), the internal liquidity adequacy assessment
process (ILAAP) and (climate risk-related) stress testing;
• The financing of the company in accordance with ING’s capital and liquidity adequacy, ING’s capital plan
and ING’s dividend and distribution policy;
• ING’s financial, non-financial and compliance risks and in this respect, among other things, ING’s
gatekeeper role and ensuring the security and compliance of the bank through enhancing and maturing
ING’s KYC priorities, supported by structural solutions (see 'Strengthening ING’s global AML/KYC
capabilities' and ‘Risk management’ for further details on ING’s AML/KYC measures), ING's operational
resilience;
• The audit plans of the internal and external auditor and the external auditor rotation;

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ING Bank Annual Report 2023 27
• Various remuneration-related matters, such as the annual review of the reward and appointment
framework, the ING Remuneration and Regulations Framework and the review of the SB and EB
remuneration policy;
• The functioning of the SB and its committees, and MBB, supported by annual collective self-evaluations,
and the functioning of their individual members;
• Several topical regulatory themes with a global ING scope, such as data strategy and management, IT,
cybersecurity and ransomware, sourcing, geopolitical developments, compliance with sanctions, the KYC
enhancement programme and leveraged transactions;
• ESG-related matters in relation to strategy, including, among others, sustainability, climate risk and
energy transition.
The MBB was present at each regular SB meeting. For some parts of these meetings, depending on the
nature of the topics discussed, only the chief executive officer (CEO) was present. The SB also had sessions
without the MBB prior to its regular meetings when this was justified by the nature of the topics on the
agenda. The purpose of these so-called pre-meetings and SB-only meetings is to allow the SB to reflect
independently on and consider important matters in the absence of the MBB.
There was frequent interaction between the chairpersons of the relevant SB committees and the members
of the MBB to ensure that – at all times – everyone was up-to-date on the most recent developments.
Furthermore, the chairperson of the Risk Committee and the chairperson of the Audit Committee continued
their informal interaction with the chairpersons of local risk and audit committees of ING’s five largest
subsidiaries to enrich the SB dialogue. Also, SB members who do not chair committees were assigned
specific focus areas that best fit their skills, knowledge and experience to further enhance SB decision-
making.
The SB continued to monitor the execution of the strategy by regularly discussing the challenges and
opportunities of the strategic priorities, countries and business with the MBB.
The SB discusses and reconfirms all of its members’ outside positions on an annual basis. In addition, it
discusses any intended outside positions and assesses if such positions can be approved while safeguarding
the level of engagement.
In addition to the information included in this SB report, information on the SB can be found in ‘Our
leadership’ and ‘Corporate governance’ chapter.
Permanent education including exchange with the business
To further strengthen their knowledge, continuous learning is organised for the SB. SB members participate
in these permanent education sessions to exchange knowledge and information on a regular basis with
ING’s business. The latter is aimed at keeping the SB up to date on ING-relevant knowledge, skills and
expertise and at increasing the SB’s understanding of and engagement with ING’s business operations and
stakeholders.
For 2023, a balance was sought in the specific topics of the sessions organised for the SB. Subjects that were
covered include ESG, operational resilience, cybersecurity, compliance, corporate governance and a range of
strategic topics. The latter included in-depth sessions on (i) digital assets, (ii) cloud strategy, (iii) generative
AI and, (iv) ING’s Wholesale- and Retail Banking business, including Business Banking, focused on ESG. A
session to gain an outside-in view on investor perspectives was also organised. For the SB committees, these
sessions included deep dives and thematic sessions. Deep dives are technical discussions on selected key
topics that contribute to a more in-depth understanding of the matters at hand. Thematic sessions focus
specifically on certain themes that need further attention and/or are looking forward at emerging risks and
developments. Both these thematic and deep-dive sessions contributed to a more in-depth understanding
of the matters discussed. Although the deep dives and thematic sessions are for the specific committees, all
SB members have standing invitations.
As part of the annual business visit, the entire SB, together with the MBB, visited the ING locations in the
Philippines and Australia in September 2023. This visit allowed the SB to get a better understanding of local
business challenges and the country-specific market opportunities.
The various educational sessions provided opportunities for SB members to interact with senior
management and subject-matter experts. Interactions also took place through speed-meet sessions. The
meetings were held both in person and virtually. Interactions contributed to a better mutual understanding
and alignment on what matters most to ING and its stakeholders.
For more information on the education of the SB committees and their respective members, for instance on
sustainability and digitisation, see 'Committee meetings'.
Financial and risk reporting
The MBB prepared the financial statements and discussed these with the SB. The quarterly results, including
the relevant auditor reports and press releases, were discussed and approved in February, May, August and
November 2023. The full-year 2023 financial results were discussed and approved in March 2024. In
addition, elements relevant to the draft agenda for the Annual General Meeting 2023 were discussed and
decided on. ING’s Annual Report is presented in an integrated form for the ninth successive year. The

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ING Bank Annual Report 2023 28
financial statements will be submitted for adoption at the 2024 Annual General Meeting as part of the 2023
Annual Report. KPMG, in its role as ING’s external auditor, audited ING’s 2023 financial statements. As part of
the standard procedures, KPMG declared itself independent from ING, in compliance with applicable rules
and regulations. Read more in ‘Audit Committee’ below.
The SB was also informed in detail throughout the year of potential financial, non-financial and compliance
risks for ING, including: the continuing political and economic developments in various countries and regions;
climate- and ESG-related risks; cybersecurity and ransomware; and updates on (upcoming) regulatory
changes.
The SB discussed how these and other risks could best be mitigated, which included reviewing stress-test
results performed by ING and programmes related to known and anticipated risks. In addition to internal
stress tests and programmes related to known and anticipated risks, ING released its integrated climate
report in October 2023. This report explains how our financing impacts climate change, as well as how
climate change impacts our business. It includes our progress on steering the nine most carbon-intensive
sectors in our loan portfolio towards global climate goals (our Terra approach) how we engage with clients
to help them in their transitions, and our work to assess climate risks and take action to mitigate them. This
progress and progress on other ESG related matters was monitored by the ESG Committee.
Read more on risk management in ‘Risk Committee’ below.
Internal Supervisory Board meetings 1
During the 2023 internal meetings of the SB (with the CEO attending, except when matters concerning him
were discussed), among others, the following topics were addressed:
• The annual targets and periodic performance assessments of the MBB and their individual members. The
SB evaluates and assesses the functioning and diversity of the MBB, including questions of succession
and remuneration, at least annually, in an internal meeting;
• The composition of the MBB;
• The composition of the SB, including its committee composition;
• ING’s broader talent and succession planning in view of bench strength, including the outcome of ING’s
annual talent review;
• Remuneration-related matters, including, but not limited to (i) the remuneration report, (ii) the
appointment/compensation/severance proposals of high earners and senior management in control
functions, (iii) the Variable Remuneration Accrual Model (VRAM) process, and the review of the SB and EB
remuneration policies;
• The annual collective self-evaluation of the MBB and the SB;
• The NYSE clawback policy.
Management Board Banking and Supervisory Board annual
collective self-evaluation
In 2023 the MBB and SB conducted the annual collective self-evaluation. This was facilitated by an
independent external party and with anonymous input from several executives and senior managers who
regularly interact with the MBB and SB and attend their meetings. The self-evaluation addressed the
‘what’ (roles and responsibilities) and the ‘how’ (culture and behaviour) of the MBB and SB. In addition to the
traditional themes, the self-evaluation over 2023 also reflected on ING’s strategy, digital and data
developments, ESG, and geopolitical and macroeconomic events, including the accessing of outside-in views
of stakeholders.
Approach
During the October and November 2023 meetings, the MBB and SB discussed and approved the annual
collective self-evaluation process and design for the year 2023. In December 2023, input was gathered from
the MBB and SB members and a group of frequent attendees. This, together with the outcome of the 2023
mid-year review and of the bilateral interactions between the MBB members, the SB chairperson and each
individual SB member in January 2024, formed the basis for the collective MBB and SB self-evaluation
dialogue in January 2024. During this dialogue the MBB and SB determined their collective positive points to
maintain and its 2024 priorities for further improvement. This forms part of the MBB's and SB’s practice to
regularly deliberate on its collective performance i.e. towards year-end (to determine the next year’s
approach and potential specific themes to address), halfway through the year (to reflect on status and
progress) and at the start of the year (to discuss the outcome of the previous year and agree on positive
points to keep and points for further improvement).
Results Management Board Banking
The MBB's collective dialogue on 15 January 2024 centred around the following questions:
1. Positive points: are the positive points previously identified still valid? Where has the EB/MBB further
improved, taking into account the continued focus on ESG and ongoing geopolitical and macroeconomic
events?

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ING Bank Annual Report 2023 29
1 As of 2024, the name of the Internal Supervisory Board meetings was amended to Restricted Supervisory Board meetings.
2. Priorities for further improvement: Did the MBB sufficiently progress in 2023 on the improvement areas
previously defined? What are the priority areas to further improve in 2024?
The MBB’s agreed priorities for 2023 included:
1. Regarding the 'what': increasing focused time on strategy and external insights;
2. Regarding the ‘how’: (i) further enhance the quality of board meetings through assessment of most
material topics and content for the agenda, and (ii) maintain the effectiveness of the MBB throughout
expected changes to its composition.
During 2023, the MBB addressed the above and, where applicable, embedded enhancements in its standard
working practice: With regard to the ‘what’, this was addressed by spending significantly more time on
bringing outside-in perspectives, particularly investor perspectives, which remains a priority for 2024, by the
increased integration of ESG considerations into discussions and decisions and by proactively monitoring
and responding to external geopolitical and market events. With regard to the ‘how’, item (i) was addressed
by clarity on priorities, open and constructive team dialogue on key topics (e.g. risk and compliance) and
improved quality of board documents which will remain a focus of attention during 2024. Item (2) was
addressed by further improved board member alignment, enhanced by members making joint market visits
and presentations.
Looking back on 2023, the MBB has concluded that there are still several positive points that are valid:
• Regarding the ‘what’: the following strengths were recognised: (i) effective fulfilment of overall
responsibilities, management of meetings, support and information available, including external insights
and education, (ii) MBB composition, including skills, experience, and diversity, (iii) understanding of key
stakeholder groups, (iv), increased focus on ESG topics, and (v) organisation culture and ability to attract
and develop talent.
• Regarding the ‘how’: the following positives were recognised: (i) MBB interactions and quality of debate,
and (ii) MBB effectiveness in making decisions, integrating key external considerations into discussions
and decisions.
Looking ahead, the MBB concluded that several priorities are still relevant. Consequently, the MBB will focus
its attention on the following during 2024:
• Regarding the ‘what’: (i) strategy and performance: when discussing strategy and performance, continue
to strengthen external insights and data, and (ii) people and talent: continue focus on attraction,
development and retention of diverse talent to strengthen talent pipelines.
• Regarding the ‘how’: (i) consider opportunities to further enhance strategic focus of meeting agendas,
managing volume of operational reviews and updates, with deep dives on priority areas where needed,
(ii) continue to focus on developing MBB interactions, and team dynamics, and (iii) continue to prioritise
content of meeting agendas.
The MBB agreed to a number of specific actions for 2024 to contribute to its performance, such as:
1. Strategy and performance: when discussing strategy and performance further enrich views with
structured external insights and market data.
2. Meeting agenda items: continue to enhance strategic focus of meeting agendas and quality of materials.
3. On people related matters, further focus on talent and diversity to strengthen talent pipelines.
4. Continued to enhance MBB effectiveness by investing time in team building.
The MBB is of the opinion that the above contributes to ING delivering on its ambitions to keep transforming
in line with the strategy.
Results Supervisory Board
The SB’s collective dialogue on 31 January 2024 centred around the following questions:
1. Positive points: are the positive points previously identified still valid? Where has the SB further improved,
taking into account the continued focus on ESG and ongoing geopolitical & macroeconomic events?
2. Priorities for further improvement: Did the SB sufficiently progress in 2023 on the improvement areas /
previously defined? What are the priority areas to further improve in 2024?
The SB's agreed priorities for 2023 included:
1. Regarding the ‘what’: (i) safeguarding balance in open, constructive dialogue with the EB and the MBB on
strategy/business/market developments, including ESG, emerging risks, and time spent on shareholders’
and other stakeholders’ views on performance of the company, and (ii) continue to be provided with fit-
for-purpose supporting materials for board meetings.
2. Regarding the ‘how’: (i) managing the change in composition of the SB, and (ii) enhancing insight into
people and talent processes.

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ING Bank Annual Report 2023 30
During 2023, the SB addressed all of the above and, where applicable, embedded enhancements in its
standard working practice. With regard to the ‘what’, items (i) and (ii) form part of the regular meetings of
the SB and its committees, with a view to the SB’s role and responsibilities, supported by its comprehensive
annual cycle of work. With regard to the ‘how’, item (i) was addressed by having regular formal and informal
interactions e.g. during the annual business visit, which contributed to maintaining cohesive and
harmonious collective dynamics within the newly composed SB, and item (ii) was addressed by spending
more time on and establishing a greater focus on people and talent.
Looking back on 2023, the SB has concluded that there are still several positive points that are valid:
• Regarding the ‘what’, the following SB strengths were recognised: (i) its effectiveness at overseeing,
supervising, challenging and advising the EB and MBB, (ii) effective decision making through its dialogues
and interactions with the EB and MBB (iii) its composition and the interface/working balance between the
committees and the SB, and (iv) its meeting management, timeliness of meeting materials, and the
support available.
• Regarding the ‘how’, the following positives were recognised: (i) taking into account the vies of key
stakeholders, for example during the review of the SB and EB remuneration policies, and (ii) an increased
focus on ESG.
Looking ahead, the SB concluded that several priorities are still relevant. Consequently, the SB will focu s its
attention on the following during 2024:
• Regarding the ‘what’ it identified: (i) continue to improve the workings and effectiveness of the SB and its
committees, and (ii) continue with the focus on business, market and (geo)political developments as well
as stakeholder engagement.
• Regarding the ‘how’ these attention points were identified: (i) continued attention to succession and
composition of the SB, EB and MBB, and (ii) further enhance the SB’s effectiveness in ING’s people and
talent management process including the talent pipeline.
Overall, the SB agreed to a number of specific actions for 2024 to contribute to its performance, such as to:
1. Ensure continued focus on key topics with specific attention for strategy, leadership & people,
governance, (geo)political developments and digital & data;
2. Enhance the effectiveness of operational oversight by reviewing the governance, structure, and remit of
the SB committees: (i) evaluate the status of the ad-hoc ESG Committee and (ii) establish an SB
Technology and Operations Committee;
3. Further improvement of board meeting materials quality through more focused and concise materials.
The SB is of the opinion that the above contributes to overseeing and constructively challenging ING in its
ambition to empower people to stay a step ahead in life and in business and making the difference for
people and the planet in line with the strategy.
Committee meetings
To manage each of the committees’ annual cycle of work and potential committee interdependencies, each
committee has drawn up an annual work plan that is being kept up to date throughout the year for priority-
setting and forward-looking purposes. These plans all feed into the SB’s annual meeting cycle.
For an overview of the composition of the committees on 31 December 2023, see the table under 'Overview
of Supervisory Board committee members'.
Risk Committee
The Risk Committee met nine times in 2023, of which two meetings were combined with the Remuneration
Committee to address remuneration-related proposals that include risk methodology elements, such as
those relating to the Variable Remuneration Accrual Model (VRAM) (see also ‘Remuneration Committee’).
Eight out of the nine SB members are member of the Risk Committee, due to the continued importance of
risk and how this is managed and supervised.
The committee assists and advises the SB with the performance of its duties in relation to overseeing: (i) the
setting and monitoring of ING’s risk appetite and risk strategy for all types of risk, including but not limited to
financial, non-financial and compliance risk; (iii) the effectiveness of the internal risk management and
control systems; and (iii) other related risk management topics. The Risk Committee pre-discusses such
matters after which it provides its input together with its recommendation to the SB, after which the SB
discusses and, where needed, decides on such matters.
The Risk Committee aims to ensure that integrity continues to come first for ING and that critical non-
financial risk areas stay top of mind, as an integral part of ING’s identity. Through risk management ING
builds strong foundations, supported by structural solutions that continue to earn and maintain the trust of
its stakeholders, including its customers and society at large.
At each quarterly Risk Committee meeting financial and model risks, non-financial risks and compliance
risks were discussed. This included the status of ING’s accompanying metrics, such as for risks in the areas of
solvency, liquidity and funding, credit, country, market, IT, non-financial risk and compliance. The
discussions were supported by different analyses conducted on the inflationary and geopolitical impact on

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ING Bank Annual Report 2023 31
ING’s credit portfolio, capital and liquidity position, and updates on credit developments in certain countries
and portfolios. The non-financial and compliance risk discussions were supported by (i) updates of the bank-
wide KYC enhancement and maturity efforts, (ii) a variety of topical dashboards such as on IT (risk),
cybersecurity, sourcing, data quality and data privacy (including GDPR) and (iii) the status of
implementation of related regulatory programmes.
As part of the annually recurring topics, the Risk Committee discussed, among other things, the following:
• The annual review of the Risk Appetite Framework and accompanying principles and risk appetite
statements;
• The annual update to the Recovery Plan;
• The impact of upcoming regulations, and credit developments in certain countries and portfolios;
• The review of the scope of ING’s key policies.
The Risk Committee also regularly discussed the status of reported whistleblower concerns.
In 2023, the deep dives for the Risk Committee encompassed: country-related regulatory and operational
challenges, payments processing and controls, funding and liquidity update in expectation of targeted
longer-term refinancing operations repayment, risk management effectiveness, modelling and operational
KYC effectiveness. Thematic sessions in 2023 encompassed: leveraged transactions framework and
management, credit risk assessment system improvements setting and steering signals, the cyber
evaluation, the internal capital adequacy assessment process (including economic capital and stress
testing), climate risk stress testing with a focus on floods and sea-level rising and a data and model ethics
session. All SB members had a standing invitation for these sessions and participated in several of these as
deemed relevant to them.
All relevant items discussed by the committee were reported to the SB, with the SB approving those items
as required from a governance perspective.
Read more on how ING manages its risks in ‘Risk management’.
Audit Committee
The Audit Committee met seven times in 2023.
The committee assists and advises the SB with (i) the performance of its duties in relation to the integrity
and quality of ING’s financial reporting, (ii) the effectiveness of ING’s internal risk management and control
systems in relation to financial reporting and (iii) the preparation of the discussions within and the decisions
of the SB on such matters.
The Audit Committee addressed, among other things, the following recurring topics:
• The quarterly results and the related press releases, the interim accounts and the financial statements,
and the Annual Report.
• Judgemental accounting topics;
• Key audit matters, as included in the auditors’ reports;
• Financial reporting, including the quarterly results;
• (The approval of) the external auditor’s audit plan/engagement letter/independence and fees;
• The overall internal control environment, the internal controls over financial reporting, the internal and
external auditor reports;
• The review of the internal audit function;
• Matters related to the financing of the company, including the assessment of ING’s capital and liquidity
position;
• The internal audit plan, including its support and progress monitoring;
• Critical and high rated overdue issues, as reported by the internal audit function;
• The updated internal audit charter;
• The update of ING’s key policies;
• ING’s long-term CET1 ratio target level;
• ING’s dividend and distribution policy;
• SOx Act framework;
• Capital and liquidity management.
The Audit Committee performed an assessment of the functioning of the external auditor, the scope and
materiality of the audit plan and the principal risks identified in the audit plan. In 2023, the Audit Committee
was involved in the selection procedure for the nomination for the legally required rotation of the auditor as
of reporting year 2026.
Specific attention was paid to a variety of other related topics. These included, among other things, the
following topics:
• ICAAP governance;
• External audit quality indicators;
• IFRS 9, ESG-disclosures;
• ING's additional capital distributions including cash dividend payments and share buy-back programmes.
In 2023, the thematic sessions for the Audit Committee encompassed: impact of market volatility on
financial reporting (e.g. foreign currencies and rising interest rates), disclosure requirements (including ESG),
and internal audit methodologies.

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ING Bank Annual Report 2023 32
All relevant items discussed by the committee were reported to the SB, with the SB approving those items
as required from a governance perspective. Directly following the Audit Committee meetings, the members
of the Audit Committee met in a closed meeting with the internal and external auditors to seek
confirmation that all relevant topics were discussed in the Audit Committee meetings.
To properly prepare for the regular Audit Committee meetings, the chairperson of the Audit Committee held
separate sessions with the external auditor, the general manager of the internal audit department, the chief
financial officer (CFO) and the Group Controller. The chairperson also met with various senior managers.
Nomination and Corporate Governance Committee
The Nomination and Corporate Governance Committee met 11 times in 2023.
The committee assists the SB with the performance of its duties in relation to selection and nomination of,
among others, the members of the SB and MBB, talent management and the effectiveness of ING’s
governance arrangements. In this respect, MBB and SB composition, bench strength and other related
succession matters are discussed during the committee meetings. The committee prepares the discussions
with and decisions of the SB on such matters.
With regard to nomination-related matters, ING aims to ensure that all of its boards are, at all times, –
adequately composed to perform their duties. As its standard practice, the Nomination and Corporate
Governance Committee therefore discusses (i) the performance of the individual members of the MBB (also
serving as input to the Remuneration Committee) and (ii) medium- to long-term succession planning for the
MBB and the SB. A continuing conversation on MBB succession planning is facilitated by the chief human
resources officer as part of the regular Nomination and Corporate Governance Committee meetings in the
form of deep dives by function and business line.
When selecting suitable board succession candidates, various aspects are to be taken into account in view
of board composition, such as regulatory requirements, suitability considerations, banking and other
industry knowledge, outside positions, independence, no conflicts of interest and availability. Also, the
minimum and optimal size of a board and diversity aspects such as how to arrive at an appropriate balance
in its representation of regions, age, gender, knowledge and expertise are to be taken into account. The
generic profile of the SB aims to capture these elements. The profile can be found on ing.com. Read more on
the boards’ composition in the ‘Composition of the Management Board Banking and Supervisory Board’
section that also includes a diversity and competence matrix.
The Nomination and Corporate Governance Committee also focuses on ING’s broader talent and succession
planning in view of bench strength and diversity at higher management levels, with selected key roles
receiving dedicated attention. This is done by taking into account ING’s diversity policy and by accelerating
refreshment where possible without jeopardising business continuity. The diversity policy is published on
ing.com. The committee also holds periodic conversations outside of its regular meetings with internal
talented individuals who are considered to have the potential to assume more senior and complex roles in
the organisation over time. The results of these conversations are fed into the individuals’ coaching and
development plans.
With regard to corporate governance, the committee discussed, among other things:
• The 2023 Annual Report and the accompanying booklets on ING’s application of the Dutch Corporate
Governance Code and the Dutch Banking Code;
• The approach and agenda for the 2023 AGM;
• The suitability policy framework and its global implementation, thereby also taking into account
regulatory developments;
• The annual updates to the corporate board charters and the decision structure as well as any changes in
board members’ outside positions;
• ING's Governance Framework;
• The revision of the Dutch Corporate Governance Code and the implementation of the revised code
throughout ING;
• The annual review of ING’s key policies list.
All relevant items discussed by the committee were reported to the SB, with the SB approving those items
as required from a governance perspective.
Remuneration Committee
The Remuneration Committee met 10 times in 2023.
The committee assists the SB, with the performance of its duties in relation to remuneration, the
remuneration policies and the application and compliance thereof and prepares the discussions within and
decisions of the SB on such matters. In doing so, the Remuneration Committee takes into account the
adequacy of information provided to shareholders on remuneration policies and practices.
As part of the renewal of the SB remuneration policy, the Remuneration Committee undertook a detailed
review to assess whether the policies, based on stakeholder feedback and market and regulatory
developments, are still appropriate. The Remuneration Committee conducted a comprehensive stakeholder
engagement process with regulators, our shareholders, customers, employees (Central Works Council) and
society at large in order to take into account their views on the remuneration policies.
As an annual recurring topic, the Remuneration Committee reviewed the remuneration report by way of
benchmarking with the purpose of further improving the remuneration report.

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ING Bank Annual Report 2023 33
In addition, the Remuneration Committee discussed the progress and performance on the annual targets
set for the MBB. With regard to variable remuneration and the application of ING’s accompanying VRAM
(including last year’s lessons learned), the committee received input and advice from the Risk Committee
following strengthened risk management governance. This served as input for a review of the predefined
thresholds above which the pool for variable remuneration may be unlocked for those eligible as well as the
accompanying individual variable remuneration proposals, including potential cases for holdback or
clawback of deferred compensation by way of malus.
The Remuneration Committee in addition discussed, among other topics:
• The EB and SB remuneration policies update;
• The progress and performance on the annual targets set for the MBB;
• The update of the gender diversity targets;
• Identified staff and high earner-related remuneration matters based on ING’s remuneration governance
structure;
• The variable remuneration and the application of ING’s accompanying VRAM (including last year’s
lessons learned);
• The NYSE Clawback Policy and potential cases for holdback or clawback of deferred compensation by
way of malus;
• Updates to ING’s Remuneration Regulations Framework;
• The actions necessary to narrow ING's gender pay gap;
• The remuneration related supervision and/or regulatory letters and publications.
All relevant items discussed by the committee were reported to the SB, with the SB approving those items
as required from a governance perspective.
ESG Committee
The ESG Committee met four times in 2023.
An ad hoc ESG Committee was established in 2022 to monitor the development of ESG within ING. The ESG
Committee has been established for an initial duration of two years. The SB is in the process of evaluating
the functioning of the committee and whether the ad hoc character of the committee will be extended or
made permanent.
To prevent an overlap between the ESG Committee and other SB committees and to safeguard an aligned
and common view on ESG, the ESG Committee consists of at least one member of each of the other
committees. The ESG Committee assists the SB with matters relating to the various areas of ESG
(environmental, social and governance), including but not limited to, the development of ESG and the
integration of ESG in the company and its strategy. In addition, the ESG Committee assists the SB by
generally monitoring and advising on potential impediments as well as relevant trends and developments
on ‘environmental’, ‘social’ and ‘governance’ topics and how to connect them with ING’s response and
actions on the basis of ING's ESG dashboard.
With regard to environmental, social and governance related topics, the committee discussed, among other
things:
• Key updates and relevant ESG-related matters, such as the 2023 Climate report, sustainability targets,
ESG dilemmas. and greenwashing;
• Any updates of key ESG policies and ESG-related supervisory/regulatory letters and publications;
• Environmental Programme update, incl. real estate strategy & green travel budget;
• Sustainable product definitions and controls.
Given the dynamic and continuously evolving nature of sustainability, deep dives were held to provide the
ESG Committee members with in-depth knowledge and experience on, among others: ING's ESG Stakeholder
engagement plan, Sustainability in connection with retail-, business- and wholesale Banking, human rights
and financial health. There was a thematic session on climate risk stress testing with a focus on floods and
sea level rising.
In June and September 2023 various external and internal experts organised a two day ESG Committee
training to inform the ESGcom and continue the discussion on a variety of ESG related topics. The June
sessions had a focus on ING's integrated climate approach and how we can empower our clients to reach
net zero by 2050, climate change and the importance of biodiversity and the role of sustainable finance
related to it. The September sessions focussed on ESG regulations and impact on the business, the ESG
reporting landscape, human rights, ESG related risk management and financial health.
All relevant items discussed by the committee were reported to the SB, with the SB approving those items
as required from a governance perspective.

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ING Bank Annual Report 2023 34
Attendance of SB members
The SB met 11 times in 2023 for its regular meetings. On average, 97 percent of the SB members
participated in the meetings. See the attendance matrix for the SB meetings and committee meetings for
more details. The continued high attendance demonstrates that SB members are engaged with ING and are
able to devote sufficient time and attention to overseeing its affairs.

SB Attendance 2023 1 |  |  |  |  |  |
| SB | RiCo 2 | AC | NCGcom | RemCo | ESGcom 4
Karl Guha (chairperson)3 | 3/3 | 4/4 | 2/2 | 4/4 | 6/6 | 2/2
Hans Wijers 3 | 8/8 | 3/3 | 4/5 | 7/7 | 4/4 | 2/2
Mike Rees (vice-chairperson) | 11/11 | 7/7 | 7/7 | 5/5 |  |
Juan Colombás | 11/11 | 7/7 | 7/7 |  | 6/6 | 2/2
Mariana Gheorghe 3 | 5/5 | 2/2 |  | 5/5 | 3/3 | 1/1
Margarete Haase | 11/11 | 7/7 | 7/7 |  |  |
Lodewijk Hijmans van den Bergh | 11/11 | 7/7 |  |  |  | 4/4
Herman Hulst | 11/11 | 7/7 | 7/7 |  |  | 4/4
Harold Naus | 10/11 | 6/7 |  |  | 9/10 |
Alexandra Reich 3 | 5/6 | 4/4 |  |  |  |
Herna Verhagen 45 | 10/11 |  |  | 11/11 | 10/10 |
Total attendance 6 | 96% | 99% | 97% | 100% | 98% | 100%

1 This SB attendance overview shows the SB (committee) meetings that took place during the year. In addition to these meetings,
there were 10 Internal SB meetings in 2023 in view of nomination and remuneration matters, with a total attendance rate of 100
percent. These are not shown separately in the overview for year-on-year, like-for-like comparison purposes.
2 In 2023, two RiCo meetings were held in combination with the RemCo on remuneration matters that also required a risk view.
3 Hans Wijers and Mariana Gheorghe retired from the SB as per 1 July 2023 and per the AGM on 24 April 2023 respectively. At this AGM,
Karl Guha and Alexandra Reich were appointed to the SB. The appointment of Karl Guha became effective on 1 July 2023. Their
attendance is shown relative to their tenure.
4 Herna Verhagen participated twice in a RiCo meeting in combination with the RemCo.
5 The numbers exclude SB observers, if any. If SB members cannot join a meeting they will always receive the meeting materials to
allow them to provide feedback prior to the meetings.
Abbreviations used: SB = Supervisory Board, RiCo = Risk Committee, AC = Audit Committee, NCGcom = Nomination and Corporate
Governance Committee, RemCo = Remuneration Committee; ESGcom = ESG Committee
Overview of the Supervisory Board committee members
The table below reflects the composition of the SB committees on 31 December 2023.

Supervisory Board | Risk Committee | Audit Committee | Nomination and Corporate Governance Committee | Remuneration Committee | ESG Committee
Karl Guha (chairperson) | Member | Member | Chairperson | Member | Member
Mike Rees (vice-chairperson) | Chairperson | Member | Member | — | —
Juan Colombás | Member | Member | — | Member | Member
Margarete Haase | Member | Chairperson | — | — | —
Lodewijk Hijmans van den Bergh | Member | — | — | — | Chairperson
Herman Hulst | Member | Member | — | — | Member
Harold Naus | Member | — | — | Member | —
Alexandra Reich | Member | — | — | — | Member
Herna Verhagen | — | — | Member | Chairperson | —

Composition of the Management Board Banking and Supervisory
Board
ING aims to ensure that the boards are – at all times – adequately composed to perform their duties.
Pinar Abay was appointed as head of Retail, Challengers & Growth and Market Leaders as of 15 May 2023.
The combining of the roles is in line with ING’s strategic priorities and was done to further simplify the
management structure of ING Bank. This appointment formalised this new role at MBB level and was
considered a logical step to further improve consistency, scalability and efficiency to the products and
services that ING offers. Pinar took over the role of Aris Bogdaneris, who was the head of Retail and
Challengers & Growth (and who stepped down from the MBB per 15 May 2023).
Ron van Kemenade left ING at the end of April 2023. With Ron's leadership ING has transformed into a bank
with scalable technology and operations. Görkem Köseoğlu was appointed as a member of the MBB and
chief technology officer as of 1 September 2023. Unfortunately, after mutual discussions on different views
regarding the expectations about his leadership role within ING, Görkem Köseoğlu stepped down from the
MBB, effective 1 November 2023. Marnix van Stiphout who’s been ING’s COO and chief transformation officer
and MBB member since 1 September 2021 took over the additional responsibilities as ad interim CTO.

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> Supervisory Board report
ING Bank Annual Report 2023 35
Hans Wijers retired from the SB per 1 July 2023. Hans was appointed to the Supervisory Board in 2017,
became its chairperson in 2018 and was reappointed for a second term in 2021. Hans became a member of
the Risk Committee, Audit Committee, Nomination and Corporate Governance Committee, Remuneration
Committee and the ESG Committee. Karl Guha was appointed as new SB chairperson, with effective date 1
July 2023.
Mariana Gheorghe retired from the SB effective per the 2023 General Meeting after more than seven years
of dedicated service. Alexandra Reich was appointed as new SB member at the 2023 General Meeting. She
became a member of the Risk Committee.
The Nomination and Corporate Governance Committee and the Supervisory Board will continue to strive for
an adequate and balanced composition of the Supervisory Board when selecting and nominating new
members for appointment, taking into account ING’s diversity policy and other factors.
Read more in the Corporate governance chapter on the composition of the MBB and the Supervisory Board.
All Supervisory Board members, with the exception of no more than one person, should qualify as
independent as defined in the best practice provision 2.1.8 of the Dutch Corporate Governance Code. The
members of the Supervisory Board are therefore requested to assess annually whether or not they are
independent as set out in the Dutch Corporate Governance Code and to confirm this in writing. On this basis,
the Supervisory Board confirms that all members of the Supervisory Board are to be regarded as
independent on 31 December 2023. On this date all members of the Supervisory Board were also to be
regarded as independent within the meaning of the NYSE listing standards. For the full list of Supervisory
Board members and more details see ‘Our leadership’, the information of which is considered to be
incorporated, by reference, in this Supervisory Board report.

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> Supervisory Board report
ING Bank Annual Report 2023 36
Diversity and competence matrix

Please note the following:
• The purpose of this matrix is to provide an overview on the experience and competencies that ING considers to be the most relevant for its stakeholders.
• The matrix represents to which extent ING's board members have such experience and competencies (either developed already before joining ING and/or during their position(s) at ING).
• The content of the matrix is subject to change in the light of ING’s continually changing situation, markets and environment.
• For the appointments of new board members, all relevant competencies are also shared with ING’s supervisors DNB/ECB based on their standard suitability matrix to assess the collective competence of members of the
management/supervisory body.

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> Supervisory Board report
ING Bank Annual Report 2023 37
Appreciation for management and employees
The SB would like to thank the management and the employees for their hard work and dedication to
deliver value for all stakeholders during a challenging year. The financial performance during 2023 speaks
for itself, but it is important to acknowledge that this performance was achieved in a febrile economic and
geopolitical environment.
With respect to the execution of the strategy, considerable progress was made during the course of the
year - with a particular attention to the KYC related processes. The SB would like to express its gratitude to
all involved for their relentless focus, dedication and work. The SB realises and understands that this is a
continual process and would like to wish all employees involved continued success in 2024.
Amsterdam, 4 March 2024

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> Supervisory Board report
ING Bank Annual Report 2023 38
Corporate governance
This section comprises ING Bank N.V.’s Corporate Governance
Statement.
Dutch Banking Code
The Dutch Banking Code is applied by ING Bank N.V. (ING Bank). The application by ING Bank is described in
the booklet ‘Application of the Dutch Banking Code by ING Bank N.V. (FY2023)’, 7 March 2024, available on
ing.com. This is to be read in conjunction with and deemed to be incorporated in the Annual Report of ING
Bank. The Banking Code can be downloaded from the website nvb.nl/English/.
Financial reporting
As ING Bank is a consolidated subsidiary of ING Groep N.V. (ING Group), its policies and procedures for
establishing and maintaining adequate internal control over financial reporting are the same as those
applied by ING Group for its consolidated financial statements with respect to ING Bank and the entities
included in the latter's own consolidated financial statements.
ING’s internal control over financial reporting is a process designed under the supervision of our principal
executive and principal financial officers to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.
ING's internal controls over financial reporting include those policies and procedures that:
• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of ING;
• Provide reasonable assurance that transactions are recorded as necessary to permit the preparation of
financial statements in accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorisations of our management and
directors; and
• Provide reasonable assurance regarding the prevention or timely detection of unauthorised acquisition,
use or disposition of assets that could have material effect on the financial statements.
ING has a process in place where, under the supervision and with the participation of the CEO and CFO, the
effectiveness of internal control over financial reporting is evaluated, based on the criteria of the Committee
of Sponsoring Organisations of the Treadway Commission in Internal Reporting (COSO) - Integrated
Framework (2013 Framework).
Supervisory Board composition
ING aims to have an adequate and balanced composition of its Supervisory Board, with a mix of persons
with knowledge, skills and executive experience, preferably gained in the banking sector, experience in
corporate governance of large stock-listed companies and experience in the political and social environment
in which such companies operate. In the selection of Supervisory Board members, ING strives for a balance
in nationality, gender, age, and educational and work background. In addition, there should be a balance of
experience and affinity with the nature and culture of the business of ING.
The Supervisory Board is responsible for selecting and nominating candidates for appointment or
reappointment to the Supervisory Board, among others based on the Supervisory Board profile, which is
available on ing.com. The Supervisory Board regularly assesses the composition of the Supervisory Board.
In 2023, three out of nine members of the Supervisory Board were female. We believe the Supervisory Board
is well-balanced in terms of other relevant diversity aspects. Overall, the preferred emphasis on members
with a financial or banking background has been maintained. In terms of nationality, the ratio between
Dutch and non-Dutch nationalities in 2023 was 56 - 44%.
According to the Gender Diversity Act, which came into force in the Netherlands on 1 January 2022, ING is
required to comply with a gender diversity quota of one third male and one third female for its Supervisory
Board. Over the year 2023, the Supervisory Board was compliant.
Relevant positions pursuant to CRD IV
Members of the Supervisory Board may hold other positions, including directorships, either paid
or unpaid. The Capital Requirements Directive 4 (CRD IV) restricts the total number of supervisory board
positions or non-executive directorships with predominantly commercial organisations that may be held by
a Supervisory Board member to four, or to two, if the Supervisory Board member also has an executive
board position. The ECB may, under special circumstances, permit a Supervisory Board member to fulfil an
additional supervisory board position or non-executive directorship. Positions with, inter alia, subsidiaries or

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> Corporate governance
ING Bank Annual Report 2023 39
qualified holdings are not taken into account in the application of these restrictions. Such positions may not
conflict with the interests of ING Bank. It is the responsibility of the individual member of the Supervisory
Board and the Supervisory Board collectively to ensure that the directorship duties are performed properly
and are not affected by any other positions that the individual may hold outside ING Bank.
Information on the members of the Supervisory Board
Reference is made to the Our leadership section for information on the members of the Supervisory Board,
which information is deemed incorporated by reference. Also read more about the composition and duties
of the Supervisory Board and its committees in the Supervisory Board report and on ing.com.
Management Board Banking composition
ING aims to have an adequate and balanced composition of its Management Board Banking, with a diverse
selection of persons with knowledge, skills and executive experience, preferably gained in the banking
sector, experience in corporate governance of large stock-listed companies and experience in the political
and social environment in which such companies operate. In addition, there should be a balance of
experience and affinity with the nature and culture of the business of ING. Factors such as nationality,
gender, age and education are also taken into account for the composition of the Management Board
Banking.
The Supervisory Board regularly assesses the composition of the Management Board Banking.
The Gender Diversity Act, which came into force in the Netherlands on 1 January 2022, requires ING to set
appropriate and ambitious targets for gender diversity in its Executive Board and senior management. ING
considers its Management Board Banking to be part of this senior management group for which the target
for gender diversity is set at at least 30% by 2025. See more information on diversity, including on gender
diversity in senior management, in the paragraphs on Unlocking our people's full potential in 'How we are
making the difference'.
Information on the members of the Management Board Banking
Reference is made to the Our leadership section for information on the members of the Management Board
Banking, which information is deemed incorporated by reference.

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> Corporate governance
ING Bank Annual Report 2023 40
Conformity statement
The Management Board Banking is required to prepare the Financial Statements and the Annual Report of
ING Bank N.V. for each financial year in accordance with applicable Dutch law and those International
Financial Reporting Standards (IFRS) that were endorsed by the European Union.
Conformity statement pursuant to section 5:25c paragraph 2(c) of the Dutch Financial Supervision Act (Wet
op het financieel toezicht).
The Management Board Banking is responsible for maintaining proper accounting records, for safeguarding
assets and for taking reasonable steps to prevent and detect fraud and other irregularities. It is responsible
for selecting suitable accounting policies and applying them on a consistent basis, making judgements and
estimates that are prudent and reasonable. It is also responsible for establishing and maintaining internal
procedures to ensure that all major financial information is known to the Management Board Banking, so
that the timeliness, completeness and correctness of the external financial reporting are assured.
As required by section 5:25c paragraph 2(c) of the Dutch Financial Supervision Act, each of the signatories
hereby confirms that to the best of his knowledge:
• the ING Bank N.V. 2023 Financial Statements give a true and fair view of the assets, liabilities, financial
position and profit or loss of ING Bank N.V. and the enterprises included in the consolidation taken as a
whole; and
• the ING Bank N.V. 2023 Annual Report gives a true and fair view of the position at the balance sheet date,
the development and performance of the business during the financial year 2023 of ING Bank N.V. and
the enterprises included in the consolidation taken as a whole, together with a description of the
principal risks ING Bank N.V. is being confronted with.
Amsterdam, 4 March 2024
The Management Board Banking
S.J.A. (Steven) van Rijswijk
CEO, chairman of the Management Board Banking
T. (Tanate) Phutrakul
CFO
L. (Ljiljana) Čortan
CRO
P. (Pinar) Abay
Head of Retail, Market Leaders and Challengers & Growth Markets
A.J.M. (Andrew) Bester
Head of Wholesale Banking
M.A. (Marnix) Stiphout
C hief operations officer, chief transformation officer and chief technology officer a.i.

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> Conformity statement
ING Bank Annual Report 2023 41
Risk management
A series of tumultuous events this year impacted our operating
environment. These include concerns around financial institution
stability following the failure of some banks, and geopolitical
uncertainties due to the ongoing war in Ukraine and the Israel-Gaza
conflict. These conflicts have brought further disruptions to supply
chains and energy prices in an environment of already high inflation.
This section explains ING’s approach to monitoring, managing and
controlling risks.
As a global financial institution with a strong European base, offering banking services, ING is exposed to a
variety of risks. We manage these risks through a comprehensive risk management framework that
integrates risk management into strategic planning and daily business activities. This aims to safeguard
ING’s financial strength and reputation by promoting the identification, measurement and management of
risks at all levels of the organisation. Taking measured risks aligned with its risk appetite is core to ING’s
business.
The risk management function supports the EB in formulating the risk appetite, strategies, policies and
limits. It provides adequate steering, oversight, challenge and controls throughout ING on risk-related items.
This section sets out how ING manages its risks on a day-to-day basis. It explains how the risk management
function is embedded within the organisation based on the ‘three lines of defence’ model. It describes the
key risks that arise from ING’s business model and how these are managed by dedicated risk management
departments, with various specific areas of expertise. The section provides qualitative and quantitative risk
disclosures on solvency, credit, market, funding and liquidity, ESG, operational, IT, compliance, business and
model risks.

Basis of disclosures (*) The risk management section contains information relating to the nature and extent of the risks of financial instruments as required by International Financial Reporting Standards (IFRS) 7 'Financial Instruments: Disclosures'. These disclosures are an integral part of ING Bank Consolidated financial statements and are indicated by the symbol (*). This is applicable for the chapters, paragraphs, graphs or tables within the risk management section that are indicated with this symbol in the respective headings or table header. This risk management section includes additional disclosures beyond those required by IFRS standards, such as certain legal and regulatory disclosures. Not all information in this section can be reconciled back to the primary financial statements and corresponding notes, as it has been prepared using risk data that differs to the accounting basis of measurement. Disclosures in accordance with Part Eight of the CRR2 and CRD V, and as required by the supervisory authority, are published in our ‘Additional Pillar III Report’, which can be found on our corporate website ing.com.

Top and emerging risks
The risks listed below are defined as existing and emerging risks that could cause actual results to differ, in
some instances materially, from those anticipated. They may have a material impact on the reputation of
the company, introduce volatility in future operating results or impact ING’s medium- and long-term
strategy, including the ability to pay dividends, maintain appropriate levels of capital or meet liquidity and
funding targets. An emerging risk is defined as a new or unexpected risk that we don't have experience of
managing, and so need to proactively identify and monitor. The impact on the organisation is therefore
more difficult to assess than other risk factors. These risks are on top of other existing risks.
The topics have mainly emerged as part of the annual risk assessment that feeds into, among others, the
annual review of the Stress Testing Framework and the Risk Appetite Framework. The sequence in which the
risks are presented below is not indicative of their likelihood of occurrence or the potential magnitude of
their financial consequences.
The 2023 risk assessment confirmed our top and emerging risks. The top risks in 2023 relate to people risk,
geopolitical risk, cybercrime, and inflation risk. Climate change risk remains an emerging risk, and reflects
the impact that climate change may have on the financial position and/or reputation of ING.

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> Risk Management
ING Bank Annual Report 2023 42
Geopolitical risk
Geopolitical risk was of the greatest concern for the MBB in 2023, and dedicated meetings were held on this
topic. ING developed a specific geopolitical risk assessment to complement the normal risk-assessment
process. This risk persisted throughout the year, mainly due to tensions between the US and China, relating
to Taiwan and deglobalisation. Other reasons were the ongoing war in Ukraine that persisted in 2023, and
the Israel-Gaza conflict.
China/Taiwan/US
China’s increased military presence in the South China Sea, technological advancements, and ongoing trade
tensions with the US have given rise to geopolitical tensions between these countries. Despite a common
interest in a good relationship, particularly across trade and supply chain, the countries also have areas of
conflict, like the Taiwan situation, and their relations have become more complex in recent years. China has
threatened to sell US Treasury bonds, and the US has blacklisted some Chinese technology companies.
There is growing concern that US-China trade tensions could escalate into further financial disconnection.
Such a conflict would cause significant disruption to global financial markets and the economy.
Deglobalisation
The period of Western-based liberalisation and globalisation is being challenged by a global trend towards
polarisation and more assertive political policies. The rise of nationalism, protectionism, populist movements
and anti-global sentiments in recent years has created an environment of increasing uncertainty. This could
potentially lead to a reversal or slowdown of globalisation.
The war in Ukraine
The war in Ukraine continued to pose a significant geopolitical risk in 2023. It has initiated a humanitarian
crisis and given rise to greater risk exposures, causing disruption to business and economic activity in the
region and worldwide. Following the invasion of Ukraine, the US, UK and EU initiated sanctions against
Russia in 2022. In response, the Russian Central Bank enforced liquidity and currency controls. For sanctions-
related developments, see ‘Compliance risk’.
With the support by NATO membership countries for Ukraine in the form of financial and military aid,
neither side seeming likely to produce a conclusive victory in the near term, and a ceasefire or settlement
looking improbable, the uncertainty about the outcome of the war looks set to last in the longer term.
Remaining at risk for ING in December 2023 is €0.4 billion (2022: €0.3 billion) local equity and €1.3 billion
(2022: €2.5 billion) credit exposures booked outside of Russia. In Ukraine, our exposure was approximately
€600 million (2022: €500 million), mainly with liquidity facilities and other lending. Early in March 2022, we
announced a decision to not do new Russia-related business.
Israel-Gaza conflict
The Israel-Gaza conflict brings significant volatility to the region and disrupts broader efforts to enhance
cooperation between Israel and the Arab states. As the conflict continues to unfold, it poses a real threat to
stability in the wider Middle East, and could affect oil supplies and drive the price higher.
People risk
People risk, which can be translated into management of labour, including among others talent attraction
and retention, was the highest risk in the risk assessment in 2023. The main challenges were linked to the
salary and compensation demands coming from a high-inflation environment and subsequent rising cost of
living. This led to lengthy CLA negotiations in the Netherlands, creating employee uncertainty.
The other concern was the skill shortage in the labour market. The labour markets in general, and the
financial industry more so, face an intensified challenge to attract and keep eligible talent. Competition not
only comes from peers; new players like tech companies and start-ups entered the playing field and are
looking for similar profiles.
Climate and environmental risk
Climate-related and environmental risks are among the biggest threats the world is facing. They can impact
both ING and the global economy in various ways.
ING is aware of the risks associated with climate change and how these can impact customers and their
financial health. This includes physical risk and transition risk. Physical risk can be acute, such as floods and
wildfires, or chronic, such as increased temperature and rising sea levels. Transition risk can be driven by
policy, technological or market changes as we shift towards a low-carbon global economy, and potentially
lead to stranded assets.
For more details and mitigation actions, see ‘Environmental, social and governance risk’.
Cybercrime and fraud
The further digitalisation of existing banking services, the introduction of new products, and evolving threats
against those services – combined with developing technology such as generative AI and deep fake – are
continuously presenting fraud-management challenges, both in the short and medium term.
Criminal actors are becoming more resourceful in targeting financial and sensitive (payment/personal) data,
such as customer user credentials outside the traditional banking environment. Criminals can obtain
sensitive (payment) or personal data via social forums such as WhatsApp, dark web shops, by screen
scraping user credentials or through third-party data breaches. In 2023, these challenges increased further

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ING Bank Annual Report 2023 43
with more sophisticated phishing attempts, improved social engineering fraud attempts, and high volumes
of scams through so-called authorised push-payment frauds. The increase in scams is a big concern for
financial institutions, with often devastating consequences for customers. While financial institutions have
limited means to prevent such authorised transactions, it is a priority to help prevent this type of fraud.
For more details and mitigation actions, see ‘Non-financial risk’.
Inflation risk
Inflation rates remained exceptionally high across the globe in 2023, triggered by increases in labour costs
and high food and energy prices. Rises in inflation prompted an adjustment of monetary policy stances by
major central banks, leading to rising interest rates and tighter global financial conditions.
The mix of high inflation and rising interest rates led to the further deterioration of macro-financial
conditions, aggravating pre-existing vulnerabilities for both businesses and households, and ultimately
increasing banks’ credit risk. As such, ING still had management adjustments to its loan loss provisions in
place for this at year-end 2023.
For more details and mitigation actions, see ‘Credit risk’.
Risk governance
Effective risk management requires company-wide risk governance. ING’s risk and control structure is based
on the ‘three-lines-of-defence’ governance model. Each line has a specific role and defined responsibilities,
with the execution of tasks being distinct from the control of these same tasks. The three lines work closely
together to identify, assess, mitigate and monitor risks.
This governance framework is designed in such a way that risk is managed in line with the risk appetite
approved by the MBB, the EB and the SB, and this approach is cascaded throughout ING.
The heads of ING’s banking business and support functions and the heads of the country units, or their
delegates, are the first line of defence. They have primary ownership, accountability and responsibility for
identifying, assessing, controlling and mitigating all financial and non-financial risks affecting their
businesses. They are also responsible for the completeness and accuracy of the financial statements and
risk reports, with respect to their areas of responsibility. The CTO is responsible and accountable for proper
security and controls of global applications and IT platforms servicing the bank, and implementing proper
processes. The COO domain builds bridges within ING, linking to almost every part of the bank. Its purpose is
to drive secure and efficient processes for customers and colleagues.
The second line of defence consists of oversight and specialised functions in risk management and
compliance. They (i) have co-responsibility for risk management, through articulating and translating the
risk appetite into methodologies and policies to support and monitor business management's control of risk;
(ii) objectively challenge risk management execution and control processes, and coordinate the reporting of
risks and controls by the first line of defence; (iii) advise on risk management and compliance, and have
decision-making power in relation to business activities that are judged to present unacceptable risks to ING;
and (iv) can set minimum requirements in terms of quality and quantity of global resourcing in the risk
management and compliance functions.
The internal audit function forms the third line of defence. It provides independent assurance to the Audit
Committee, the EB and the MBB on the quality and effectiveness of ING’s internal control, risk management,
governance and implemented systems and processes in both the first and second lines of defence. To
protect its independent nature, decisions regarding the appointment, reappointment or dismissal from
office as well as the remuneration package of the head of the internal audit function require SB approval.
Board-level risk oversight
Both the EB (for ING Group) and the MBB (for ING Bank) play an important role in managing and monitoring
our risk management framework.
• The SB is, for risk management purposes, advised mainly by the Risk Committee, which assists and
advises in monitoring the risk profile and approving the overarching risk appetite of the company as well
as the structure and effective operation of the internal risk management and control systems.
• The EB is responsible for managing risks associated with all activities of ING Group, whereas the MBB is
responsible for managing risks associated with all activities of ING Bank. The EB and MBB responsibilities
include ensuring that internal risk management and control systems are effective and that ING Group
and ING Bank comply with relevant legislation and regulations. On a regular basis, the EB and MBB report
on these issues and discuss the internal risk management and control systems with the SB. On a
quarterly basis, the EB and MBB report on ING’s risk profile versus its risk appetite to the Risk Committee,
explaining changes in the risk profile.
As a member of the EB and the MBB, the CRO is primarily responsible for: (i) supporting the Board in its
engagement with and oversight of the development of the risk appetite and risk appetite statements and
for translating the risk appetite into a risk limits structure, actively engaged in monitoring performance
relative to risk-taking and risk limit adherence; (ii) setting up the risk management framework and
overseeing the development and implementation of risk and compliance policies, processes, models,
compatible methodologies, including both forward-looking and backward-looking tools, ongoing
strengthening of risk management/people capabilities and reports, as necessary to ensure the effectiveness
of robust internal control and risk systems to fully support its strategic objectives and all of its risk-taking
activities; (iii) regularly providing comprehensive information on risks to the Management Board, the Risk
Committee and other relevant functions; and (iv) advising about the current risk profile, current state of the

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ING Bank Annual Report 2023 44
risk culture, utilisation against the established risk appetite, and limits, limit breaches and mitigation plans.
For more on the SB and EB roles and responsibilities, see ‘Corporate Governance’.
Executive level
The risk committees described below act within the overall risk policy and delegated authorities granted by
the MBB:
• The Global Credit and Trading Policy Committee (GCTP) discusses and approves policies, methodologies,
and procedures related to credit, trading, country, and reputation (such as environmental and social risk
or ESR) risks. The GCTP meets monthly. After the MBB and the GCTP, the Credit and Trading Risk
Committee (CTRC) is the highest-level body authorised to discuss and approve policies, methodologies,
and procedures related to credit and trading risk.
• The Global Credit Committee – Transaction Approval (GCC(TA)) discusses and approves transactions that
entail taking credit risk (including investment risk), country, legal, and environmental and social risk. The
GCC(TA) meets twice a week.
• The Asset and Liability Committee Bank (ALCO Bank) translates the strategy into a risk appetite and sets,
monitors and reviews the asset and liability objectives and risk management framework. Adequate
supervision and coordination of asset and liability management is essential for good risk management
and to serve customer and community needs by continued sound banking business. The MBB has
delegated this responsibility to the ALCO Bank.
• The Non-Financial Risk Committee Bank (NFRC Bank) is accountable for the design and maintenance of
the non-financial risk management framework, including operational risk management, compliance and
legal policies, minimum standards, procedures and guidelines, development of tools, methods, and key
parameters (including major changes) for risk identification, measurement, mitigating and monitoring/
reporting. NFRC Bank meetings are held at least quarterly.
• The Model Risk Management Committee (MoRMC) discusses and steers, on a monthly basis, the overall
model strategy. MoRMC discusses and approves policies and methodologies related to model risk
management.
• The Global Data Committee (GDC) oversees (identifies, measures, responds to change and monitors) the
Global Data function and its contribution to wider society. The GDC meets every two months.
Regional and business unit level
ING’s regional and/or business unit management have primary responsibility for the management of risks
(credit, market, funding and liquidity, operational, IT, compliance and model) that arise in their daily
operations. They are accountable for the implementation and execution of appropriate risk frameworks
affecting their businesses in compliance with procedures and processes at the corporate level. Where
necessary, the implementation is adapted to local requirements.
The regional and/or business unit (BU) head of risk are involved in these activities. The local (regional and BU)
head of risk is responsible for the analysis, monitoring and management of risks across the whole value
chain (from front to back office). The local risks are discussed in local risk committees that roll up to the key
risk committees at executive level. Local Client Integrity Risk Committees (CIRCs) assess client integrity risk,
and they have a final decision on client acceptance or client off-boarding, from a risk-based perspective, in
the areas of financial crime, Foreign Account Tax Compliance Act (FATCA), Common Reporting Standard
(CRS), and ESR.
Organisational structure
The CRO function is organised along the lines of a matrix structure integrating (i) the Global Risk functions,
(ii) the Regional/Country Risk functions at entity level, and (iii) the Risk Segments, with a uniform
methodology and terminology, aimed at ensuring a holistic view of all risks. Global Risk functions, organised
by risk types into risk domains (departments), are ultimately responsible and accountable for the functional
steering of the respective risk type globally, ensuring a uniform taxonomy and methodology is used for the
setting of the relevant risk appetite levels, further cascading risk appetite into detailed risk strategies and for
the effective monitoring and reporting of risks, on an individual and consolidated basis.
The following organisation chart illustrates the reporting lines in 2023 for the risk management
organisation. The fixed lines reflect hierarchical reporting lines, whereas the dotted lines are for the
functional reporting lines:

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ING Bank Annual Report 2023 45

Risk policies, procedures and standards
ING has a framework of risk management policies, procedures and minimum standards in place to create
consistency throughout the organisation, and to define requirements that are binding for all business units.
The goal of the governance framework of the local business units is to align with ING’s framework and to
meet local (regulatory) requirements. Senior management is responsible for the implementation of and
adherence to policies, procedures and standards. Policies, procedures and standards are regularly reviewed
and updated via the relevant risk committees to reflect changes in requirements, markets, products and
practices.
Internal control framework
In its Enterprise Risk Management (ERM) Framework, ING explains its approach to mitigating risk outside
ING’s risk appetite. The internal control framework (ICF) translates regulations and internal requirements
into policies articulating specific risks and control objectives. These policies form the basis for translation into
process control standards, which are used by the business to support and promote an effective risk and
control environment. The ICF includes binding principles, definitions, process steps, and roles and
responsibilities to create consistent bank-wide policies and control standards.
Global policies and control standards are developed and maintained or updated within the ICF. These global
documents are designed by head-office functions and are to be adhered to by all ING entities and support
functions. In line with the ERM approach, ownership for policies will be with the second line of defence (2nd
LoD), while control standards are to be owned by the first line of defence (1st LoD). Global policy and control
standard documents are approved by relevant approval bodies (e.g. SB, EB, MBB and NFRC Bank).
The policies are based on the risk taxonomy, which is designed to prevent overlaps in policy control
objectives. The control standard owners are responsible for defining the key controls that mitigate the
critical and high inherent risks in the business processes.
Risk culture
At ING, we attach great importance to a sound risk culture, which is essential for performing our role in
society responsibly and in keeping the bank safe and secure. We determine our risk culture as the way in
which employees identify, understand, discuss and act on the many financial and non-financial risks we are
confronted w ith every day.
Learning
In 2023, we continued to expand and strengthen our required learning curriculum. This is foundational
learning that is centrally created and rolled out to all staff across the bank. The topics covered in 2023 were
financial crime, customer centricity, cybersecurity and data protection. We continue to update our formats
for our learning to increase engagement and drive practical application of the knowledge gained by staff.
The curriculum is tracked centrally to monitor timely completion.
In addition to all staff modules, we continue to expand our learning offering on a range of risk topics and for
risk staff. Working with risk experts, the Risk Academy has built role-based learning plans for risk colleagues
which provide a wide selection of learning to support their professional development. These take the form of
a comprehensive offering of learning modules and learning channels that support employees in developing
their knowledge, skills and behaviours.

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ING Bank Annual Report 2023 46
Dutch Banker’s Oath
In the Netherlands, all employees are required to take the Banker's Oath and pledge this promise in a
meaningful ceremony. The Oath came into force in the Netherlands on 1 April 2015, as part of a joint
approach from all banks, aimed at introducing social regulations, a revised Dutch Banking Code
implementing an oath with associated rules of conduct and disciplinary law. This way, Dutch banks show
society what they stand for and are accountable for, both as individual banks and as a sector. In 2021, due
to the Covid-19 pandemic, ING in the Netherlands changed the live Banker's Oath ceremonies into virtual
ceremonies, to allow new employees (around 400 a month) to still take the oath in time and in a
meaningful ceremony. After 2021, this was continued and is now common practice at ING. Before taking the
oath, an e-learning and a challenge (discussing dilemmas) are mandatory, to stress the content and the
importance of the oath. It also show employees the dilemmas they may face in their daily work, and how to
carefully balance the interests of all our stakeholders in the decisions they make.
Remuneration
ING aims to align its remuneration policy with its risk profile and the interests of all stakeholders. For more
information on ING’s compensation and benefits policies, and its relation to the risk taken, see the Capital
Requirements Regulation (CRR) remuneration disclosure published on ing.com.
Risk cycle process
ING uses a step-by-step risk management approach to identify, manage and mitigate financial and non-
financial risks. The approach consists of a cycle of five recurring activities: risk identification, risk assessment,
risk control, risk monitoring and risk reporting. The cycle is designed to determine what the risks are, assess
which of these can really do harm, take mitigating measures to control these risks, monitor developments
to see if the measures taken are effective, and report the findings to management at all relevant levels to
enable them to take action when needed.
The cycle recurs in two ways. First, the identification, assessment, review and update of mitigating
measures are repeated periodically. Second, this periodic monitoring exercise may indicate emerging risks,
known risks that are changing, risk levels that are changing, or current control measures that are not
effective enough. Further analyses of these findings may then result in renewed and more frequent risk
identification, and/or assessment, and/or change of mitigating measures.
Risk identification
Risk identification is a joint effort of the business and the risk management functions. Its goal is to detect
potential new risks and determine changes in known risks. Regular risk identification is essential for effective
risk management. Potential risks that are not identified will not be controlled and monitored, and may lead
to surprises later. Known risks may have changed over time and, as a consequence, the existing mitigating
measures and monitoring may be inadequate or obsolete.
Risk identification is performed periodically. In case of material internal or external change, additional ad
hoc risk identification can be performed.
Risk assessment
Each identified risk is assessed qualitatively or quantitatively to determine its importance. This enables ING
to decide which of the identified risks need control measures and how strict or tolerant these measures
should be. Known risks are reassessed to detect any change in the risk level.
The importance of a risk is based on both the likelihood that the risk materialises and the subsequent
financial or reputational impact that may occur should the risk arise. Unlikely risks with a potentially high
impact need to be controlled. A risk that is likely to happen regularly but expected to have a modest
financial impact may not need to be mitigated if the consequences are accepted by management.
Risk control
Risks can be controlled by mitigating measures that lower the likelihood the risk occurs, lower the impact
when it occurs, or both. The ultimate measure to lower a risk is to stop the activity or service that causes the
risk (risk avoidance). Risk control and mitigation measures are defined and maintained both bank-wide and
at the local level.
Monitoring and reporting
ING monitors risk-control measures by checking if they are executed, complied with, and have the expected
mitigating effects, and by following the development of the risks and their risk levels. Risk reporting provides
senior and local management with the information they need to manage risks.
Risk appetite framework
The Risk Appetite Framework (RAF) is one of the key elements of the ERM framework. Its objective is to set
an appropriate risk appetite at a consolidated level across different risk categories and to allocate the risk
appetite throughout the organisation.
Policy
The RAF policy explains the setup of the overarching global risk appetite. Within the RAF, ING monitors a
range of financial and non-financial risk metrics with an aim to keep our risk profile in line with our risk
appetite while executing our strategy. ING’s RAF, which is approved by the SB, defines the desired risk profile

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ING Bank Annual Report 2023 47
that is to be integrated in the strategic decision-making and financial planning process. It is designed to be
able to withstand market volatility and stress, while meeting regulatory requirements. The framework,
including underlying metrics and assumptions, is regularly reviewed so that it remains relevant. The RAF
combines various financial and non-financial risk appetite statements (RAS) into a single, coordinated
approach, to provide the business with a clear overview of the relevant risks and the tools to manage them.
This view allows the EB, the MBB, and senior management to form an opinion on the adequacy of internal
risk management and control systems for the risks ING faces while pursuing its strategy.
Process
The RAF is focused on setting the risk appetite at the consolidated level and across the different risk
categories, and provides the principles for cascading this risk appetite down into the organisation. The RAF
and underlying limit allocation are reviewed on an annual basis, or more frequently if necessary, based on
their monthly review in the MBB and quarterly review in the EB and the SB. It is therefore a top-down
process, which bases itself on the ambition of the bank in terms of its risk profile, the regulatory
environment and the economic context. Limits that require SB approval are called boundaries, and the
underlying instruments supporting the boundaries require EB and MBB approval.
Step 1. Identify and assess ING’s key risks
The outcome of the risk-identification and risk-assessment process is used as the starting point for the
review of the RAF. Within this step, the risks ING faces when executing its strategy are identified in the
context of the current economic, political, social, regulatory and technological environment. The
assessment identifies whether the potential impact is material and if it is sufficiently controlled within ING’s
risk management function. It benchmarks the current risk framework against regulatory developments.
Known risks are reassessed, either to confirm likelihood and risk levels or to take account of potential
changes.
Step 2. Set risk appetite framework
Based on ING’s risk assessment and risk purpose, boundaries for the overarching risk frameworks are set.
Once the overarching risk appetite thresholds have been set and approved by EB/MBB and subsequently by
SB, the statements are translated into risk-type-specific statements and lower-level thresholds, which are
set and approved by senior risk committees, like ALCO Bank, GCTP, MoRM and Bank NFRC. Cascading is done
via several detailed risk appetite statements, which have been defined per risk type, the combination of
which is aimed at ensuring compliance with the overarching solvency, (credit) concentration, and funding
and liquidity RASs.
Examples of risk categories and their underlying risk metrics include:
• Solvency and profitability (e.g. CET1 ratio, MREL ratio and economic capital coverage ratio);
• Funding and liquidity (e.g. liquidity coverage ratio (LCR) and net stable funding ratio (NSFR));.
• Credit risk (e.g. exposure at default (EAD) and risk weighted assets (RWA));
• Market risk trading book (e.g. event risk and historical value at risk (HVaR));
• Market risk banking book (e.g. net interest income (NII) at risk and revaluation reserve at risk);
• Non-financial risk (e.g. capital-at-risk and management of audit issues);
• Compliance risk (e.g. key risk indicators on Financial Crime and Conduct);
• Business risk (e.g. economic capital);
• Model risk (e.g. number of unvalidated or inadequate pillar 1 models).
ING has started including climate risk in its RAF by, among other things, introducing climate risk as one of
the dimensions to determine sector concentration as part of the credit risk appetite statements. In the
coming years, ING will extend the inclusion of climate risk impact on other risk types with the aim of
ensuring that the potential risks stemming from, for example, transition risk and physical risk are properly
captured in the RAF.
Step 3. Cascade into statements per risk type and business unit
The bank-wide risk appetite is translated per risk type, which is further cascaded into the organisation. Risk
appetite statements are then translated into dedicated underlying risk limits that are used for the day-to-
day monitoring and management of ING’s risks. The risk appetite statements serve as input for the
quarterly planning process as well as for the establishment of key performance indicators and targets for
senior management. The next graph is an illustrative and non-exhaustive overview of the RAF.

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ING Bank Annual Report 2023 48
Step 4. Monitor and manage underlying risk limits
To verify that ING remains within the RAF, it reports the risk positions vis-à-vis their limits on a regular basis
to senior management committees. A monthly report is submitted to the MBB reflecting the exposure of
ING against the risk appetite. An extended report is submitted quarterly to the EB and the SB and its Risk
Committee. Moreover, every quarter the financial plan is checked for potential limit excess within a one-year
horizon, where in the strategic dialogue the MBB can take mitigating measures or make adjustments to the
dynamic plan.
Stress testing
Stress testing is an important risk management tool that provides input for strategic decisions and capital
planning. The purpose of stress testing is to assess the impact of plausible but severe stress scenarios on
ING’s capital and liquidity position. Stress tests provide complementary and forward-looking insights into the
vulnerabilities of certain portfolios, with regards to adverse macroeconomic circumstances, stressed
financial markets, and changes in the political and geopolitical climate. In addition to assessing P&L, capital
and liquidity positions of ING for a range of different scenarios, idiosyncratic risks are also included. The
outcomes of these stress tests help management get insight into the potential impact, and define actions to
mitigate this potential impact.
Types of stress tests
Within ING, we perform different types of stress tests. The most comprehensive type of stress tests are the
firm-wide scenario analyses, which involve setting scenario assumptions for all the relevant macroeconomic
and financial market variables in all countries relevant to ING. These assumptions usually follow a qualitative
narrative that provides a background to the scenario. In addition to firm-wide scenario analyses, ING
executes scenario analyses for specific countries or portfolios. Furthermore, sensitivity analyses are
performed, which focus on stressing one or more risk drivers; usually without an underlying scenario
narrative. Finally, ING performs reverse stress tests, which aim to determine scenarios that could lead to a
predefined severe adverse outcome.
Process
ING's stress-testing process consists of several stages:
• Risk identification and risk assessment: It identifies and assesses the risks ING or the relevant entity is
facing when executing its strategy based on the current and possible future economic, political,
regulatory and technological environment. It provides a description of the main risks and risk drivers
related to the nature of ING’s business, activities and vulnerabilities.
• Scenario definition and parameterisation: Based on the outcome of the previous step, a set of scenarios
is determined with the relevant scope and set of risk drivers for each scenario, as well as its severity, the
key assumptions and input parameters. The output of this phase includes a quantitative description of
the stress scenarios to be analysed, the relevant output metrics and, when applicable, a narrative
description.
• Impact calculation and aggregation: Based on the quantitative description of the stress scenarios
determined in the previous step, the impact is determined for the relevant scenario, scope and horizon.
The impact calculation and aggregation can be part of a recurring process or part of a specific process
set-up for one-off stress tests.
• Scenario reporting: For each stress test, a report is prepared after each calculation, which describes the
results of the scenario and gives a recap of the scenario with its main assumptions and parameters. The
stress-test report is sent to the relevant risk committees and/or senior management. It is complemented,
if needed, with advice for management action based on the stress-testing results.
• Scenario control and management assessment: Depending on the outcomes of the stress test and the
likelihood of the scenario, mitigating actions may be proposed. Mitigating actions may include, but are
not limited to, sales or transfers of assets and reductions of risk limits.
Methodology
Detailed and comprehensive models are used to calculate the impact of the scenarios. In these models,
statistical analysis is combined with expert opinion to make sure that the results adequately reflect the
scenario assumptions. The methodologies are granular and portfolio-specific, and use different
macroeconomic and market variables as input variables. The calculations are in line with our financial and
regulatory reporting frameworks. The stress-testing models are subject to review by Model Risk
management.

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ING Bank Annual Report 2023 49
Solvency risk
Introduction
Solvency risk is the risk of lacking sufficient capital to fulfil business objectives, regulatory requirements or
market expectations. An insolvent bank is unable to pay its debts and will be forced into bankruptcy.
The level and quality of capital is crucial for the resilience of individual banks. Banks are expected to assess
the risks they face and, in a forward-looking manner, ensure they identify and manage all material risks.
They must also make sure these risks are sufficiently covered by loss-absorbing capital to provide continuity
if unexpected risks materialise in times of stress. Given the interdependencies with other financial and non-
financial risks, this balancing act of capital adequacy needs to be done within a sound and integrated
management approach. It must coherently link and align all the moving parts of the bank with its long-term
business strategy.
Governance
ING's solvency risk governance is based on the three-lines-of-defence structure setting a clear division of
responsibilities as well as an independent risk-control challenge process.
Group Treasury (GT) Balance Sheet & Capital Management, as first line of defence, is responsible for
maintaining the adequate capitalisation of ING Group and ING Bank entities, to manage the risk associated
with ING’s business activities. This involves not only managing, planning and allocating capital within ING
Group, ING Bank and its various entities, but also helping to execute necessary capital market transactions,
term (capital) funding and risk management transactions. ING takes an integrated approach to assess the
adequacy of its capital position in relation to its risk profile and operating environment. This means GT's
Balance Sheet & Capital Management takes into account both regulatory and internal, economic-based
metrics and requirements, as well as the interests of key stakeholders, such as shareholders and rating
agencies.
Integrated Risk acts as second line of defence and is therefore responsible for all the risk topics within the
internal capital adequacy assessment process (ICAAP) framework. This starts with the annual risk
identification and risk-assessment process which functions as the starting point for the annual review of the
related building blocks. Integrated risk coordinates the annual review of the risk appetite framework and as
part of this proposes the solvency risk appetite. The output of the risk assessment is also used by Integrated
Risk for the annual review of ICAAP stress-test scenarios and the economic capital framework. By doing so,
Integrated Risk challenges the execution, management and control processes in relation to the business
activities.
As the third line of defence, Corporate Audit Services provides an ongoing independent and objective
assessment of the effectiveness of internal controls to mitigate risks embedded in ING’s business processes,
including risk management activities performed by both the first and second line of defence.
The SB remains ultimately responsible for overseeing ING’s overall ICAAP framework whereas the EB and
MBB are responsible for the functioning of the ICAAP processes by managing and executing them. Delegated
decision power is mandated towards ALCO Bank. As a sub-committee of ALCO Bank, the ICLAAP Committee
and Stress Test Council own delegated responsibilities concerning the ICAAP processes and brings together
expertise and knowledge from different key departments involved. It functions as an oversight body,
responsible for maintaining a sound and effective processes and ensuring that the different elements of the
ICAAP fit coherently together as an integral part of the institution’s overall management framework.
ICAAP framework
ING’s internal capital adequacy assessment process (ICAAP) framework aims to ensure that capital levels
remain adequate – both forward-looking and under adverse conditions, in terms of covering material risks-
to-capital from both a normative and an economic (internal) perspective. The assessment of ING’s capital
adequacy takes into account its business strategy and risk profile, market environment, and operating
macro environment. This implies that views of various stakeholders, such as regulators, shareholders,
investors, rating agencies, clients and customers play an important role.
The continued strength of ING’s capital position, the adequacy of the financial position, and risk
management effectiveness are essential to achieving the strategy. ING’s capital and funding strategy
determines the underlying ICAAP elements, and thereby contributes to ING's business continuity from
different perspectives.
Managing ING’s capital entails finding the right balance between supply and demand, while taking into
account market and macro circumstances. The process of balancing these strategic goals is captured in the
ICAAP framework. It is enabled by six building blocks and underlying elements facilitating the ICAAP. The
following building blocks have been defined in the ICAAP framework, which are applied for both the
‘normative’ and ‘economic’ perspective as defined in the ECB guide to ICAAP, published in November 2018:
• Risk identification and assessment;
• Risk appetite;
• Solvency stress testing;
• Planning and forecasting;
• Capital management;
• Continuity .

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ING Bank Annual Report 2023 50
Risk identification and assessment
ING’s capital management and solvency risk management starts with the risk-identification and risk-
assessment process. Its main purpose is to detect potential new risks and identify changes in the potential
impact of known risks. On an annual basis, ING performs a thorough review of its solvency risks or risks to
capital. Within this assessment, bottom-up assessments are combined with top-down assessments,
including a questionnaire and interviews with senior management. The results of the risk assessment are
discussed in ALCO Bank, which comprises of almost the full MBB. Once approved, the conclusions of the risk
assessment feed into the annual review of the risk appetite framework, the stress-testing framework, and
the economic capital framework. In addition to this annual process, ING also reassesses its risks as part of its
capital adequacy statement, a quarterly process to assess ING’s capital adequacy.
Risk appetite
As explained in the RAF section in the previous chapter, ING has established overarching solvency risk
boundaries. Boundaries are risk appetite statements that are essential for risk management activity, making
it of paramount importance to keep these boundaries within the defined level. The SB is responsible for
approving and monitoring the boundaries, which are complemented by a sequence of risk-type-specific
instruments (risk appetite statements). These underlying risk appetite statements are cascaded down into
the organisation, and dedicated risk thresholds are set that are used for the day-to-day monitoring and
management of ING’s risks. ING has solvency risk appetite statements in place for the following metrics:
CET1 ratio, total capital ratio, leverage ratio, total loss-absorbing capacity (TLAC), and minimum
requirement for own funds and eligible liabilities (MREL) based on RWA/leverage ratio and economic capital
adequacy.
Solvency stress testing
Solvency stress testing allows ING to examine the effect of plausible but severe stress scenarios on the
solvency position. It also provides insight into which entities or portfolios are vulnerable to certain types of
risks or scenarios. Solvency stress testing is an important tool in identifying, assessing, measuring, and
controlling risks to capital, providing a complementary and forward-looking perspective to other solvency
risk management tools. For solvency stress testing, ING follows the same steps described in the overall
section on stress testing.
ING distinguishes the following three types of stress test analysis:
• Sensitivity analysis: Assess the impact of a predefined shock in one or more risk drivers. The main
purpose of sensitivity analyses is to monitor the impact of this predefined (or standardised) shock over
time to get an understanding of how the risk profile of the bank has developed. In contrast with scenario
analyses, sensitivity analyses are built on a predefined set of shocks that don't necessarily relate to a
qualitative story line.
• Scenario analysis: Used to assess the impact of historical, statistical and/or hypothetical circumstances
on the financial position of ING. These stress tests often build on a qualitative scenario narrative and
reflect risk topics that are deemed relevant for ING given, for example, its business model or geographical
presence. To execute such a stress test, scenarios need to be determined that are dynamic and forward-
looking, and incorporate the occurrence of a string of events through time.
• Reverse stress testing: The purpose is to identify scenarios that could lead to a pre-defined outcome. This
could, for example, be a CET1 ratio or MREL to define the point at which the bank is considered not viable
anymore. The added value of reverse stress testing is to explore risk drivers and stress scenarios outside
the existing range.
The outcomes of solvency stress test analyses are taken into account in capital planning, but also for setting
risk appetite statements and the capital management buffer.
Planning and forecasting
The capital and funding plan is an integral part of the dynamic plan, ING’s financial and business planning
process. Its objective is to inform and advise the management on the capital development and need of ING
Group and ING Bank, under base case and adverse scenarios. It describes how ING shall finance the expected
capital constraints taking into consideration growth projections, capital and risk evolution, macro and
market conditions, both under the normative and economic perspective. The capital and funding plan is
discussed and approved by ALCO Bank and updated at least twice a year. Within these updates, ING takes
account of recent market and risk developments, and aims to ensure that capital planning adheres to the
solvency risk appetite set by the SB.
Capital management
Formulation of the CET1 target is a key element in solvency risk management. The target ratio, based on
the management buffer concept, enables ING’s senior management to steer, benchmark and assess the
bank’s current and future capital levels much more efficiently. The target level clearly supports trust-
building among ING’s key stakeholders (e.g. regulators, investors, and customers).
The capital management buffer aims to protect the interests of key stakeholders and plays an important
role in the overall capital adequacy governance. The rationale behind the buffer is that it provides an
additional cushion on top of the (local) regulatory minimum requirements (e.g. supervisory review and
evaluation process (SREP) requirements) to withstand a certain level of stress and facilitate awareness and
preparedness to take management actions. ING reviews its capital management buffer on a regular basis to
determine its effectiveness and robustness, updating it as appropriate. See also Note 44 ‘Capital
management’.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Solvency risk
ING Bank Annual Report 2023 51
Continuity
Risk events with high severity or significant deteriorations of economic and market conditions beyond ING’s
control could cause deviations from the business and capital plans, which may result in a potential capital
shortfall.
ING has therefore set up a continuity (safety) net of contingency and recovery planning. As part of this, ING
set up ongoing monitoring of relevant indicators with the aim of awareness and preparedness to act
proactively to ensure continuity. The intervention measures, which can be activated when deemed
necessary, consist of predefined RWA reduction measures, as well as direct capital-increasing measures.
The escalation mechanisms are defined, governed and detailed in the contingency and recovery plans.
Both plans aim to restore ING’s capital adequacy. Depending on the severity of the situation, the
contingency plan can be activated at this warning phase, as well as triggering further mitigating action and
formation of the contingency crisis teams. Further drops in capital levels trigger the alert phase for recovery
monitoring and/or the activation of the recovery plan and corresponding crisis teams.
Assessing capital adequacy: Capital Adequacy Statement (CAS)
The CAS is ING Group’s quarterly assessment of its capital adequacy and takes into account different
elements with respect to its capital position. The degree to which ING’s capital position is considered
adequate depends on a variety of internal and external drivers:
• Current supervisory requirements and (expected) requirements going forward;
• Current internal requirements and (expected) requirements going forward (economic capital/view);
• Coherence of the available capital with the (realisation of) strategic plans;
• The ability to meet internal and external requirements in the case of stressed events or should a risk
materialise.
The CAS assesses the adequacy of ING’s capital position in relation to the above-mentioned drivers and
states the extent to which the capital position consequently is considered as adequate. On a quarterly basis,
the CAS document is prepared. Additionally each year, the EB/MBB signs and provides a comprehensive
assessment of ING’s capital adequacy, supported by the ICAAP outcomes, in the form of a capital adequacy
statement.
Capital developments
ING Bank’s capital ratios at the end of the year decreased compared to 2022 primarily due to lower
available CET1 capital as a result of the EUR 4.0 billion additional distributions that were upstreamed to ING
Group. Risk-weighted assets were mainly impacted by volume reduction in Russia-related exposure,
currency movements, improvement in book quality and model impacts.
ING Bank paid EUR 6.3 billion of dividend to ING Group in relation to the 2023 profit and an additional EUR 4.0
billion for distribution to shareholders by the Group.
ING Bank N.V. has a CET1 ratio of 11.95% versus an overall CET1 requirement (including buffer requirements)
of 7.50%. The Bank’s Tier 1 ratio decreased from 14.5% to 14.1% compared to last year. The Banks’s Total
capital ratio decreased to 17.0%.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Solvency risk
ING Bank Annual Report 2023 52
Credit risk
Introduction
Credit risk is the risk of loss from the default and/or credit rating deterioration of clients. Credit risks arise in
ING’s lending, financial markets and investment activities. The credit risk section provides information on
how ING measures, monitors and manages credit risk and gives an insight into the portfolio from a credit
risk perspective.
Governance (*)
ING’s credit risk strategy is to maintain an internationally diversified loan and bond portfolio, while avoiding
large risk concentrations. The emphasis is on managing business developments within the defined credit
and concentration risk appetite. The aim is to support relationship banking activities, while maintaining
internal risk/reward guidelines and controls.
The Credit Risk department is responsible for setting the credit risk strategy for ING and aims to ensure
credit risk and credit restructuring are managed from an overarching point of view rather than per business
line. Furthermore, the Credit Risk Control Unit is responsible for the oversight and control of rating systems.
While the Credit Risk department has oversight of the Group credit risk strategy and risk appetite across
Retail Banking risk and Wholesale Banking risk, the head of Retail/Rest of World (RoW) Risk and head of
Wholesale Banking Risk aim to ensure the management of the risk within these business lines. Also refer to
the Risk governance and organisational structure in the introductory section of 'Risk management'.
The Credit Risk function encompasses the following activities:
• Providing consistent credit risk policies, systems and tools to manage the credit lifecycle of all activities;
• Measuring, monitoring and managing credit risks in the bank’s portfolio, including evaluation of scenario
and stress test results;
• Challenging and approving new and modified transactions and borrower reviews, including involvement
in the process of assigning risk ratings to indicate a clients's creditworthiness;
• Managing the levels of provisioning and risk costs, and advising on impairments.
Credit risk categories (*)
In the following table the different types of credit risk categories are described and a reconciliation with the
notes in the financial statements is also included:

Reconciliation between credit risk categories and financial position (*)
Credit risk categories | Notes in the financial statements
Lending risk: is the risk that the client (counterparty, corporate or individual) does not pay the principal interest or fees on a loan when they are due, or on demand for letters of credit (LCs) and guarantees provided by ING. | Note | 2 | Cash and balances with central banks
Note | 3 | Loans and advances to banks
Note | 4 | Financial assets at fair value through profit or loss
Note | 5 | Financial assets at fair value through other comprehensive income
Note | 7 | Loans and advances to customers
Note | 38 | Contingent liabilities and commitments
Investment risk: is the credit default and risk rating migration risk that is associated with ING’s investments in bonds, commercial paper, equities, securitisations and other similar publicly traded securities. This can be viewed as the potential loss that ING may incur from holding a position in underlying securities whose issuer's credit quality deteriorates or defaults. | Note | 4 | Financial assets at fair value through profit or loss
Note | 5 | Financial assets at fair value through other comprehensive income
Note | 6 | Debt securities
Money market risk: arises when ING places short-term deposits with a counterparty in order to manage excess liquidity. In the event of a counterparty default, ING may lose the deposit placed. | Note | 2 | Cash and balances with central banks
Note | 3 | Loans and advances to banks
Note | 7 | Loans and advances to customers
Pre-settlement risk: arises when a client defaults on a transaction before settlement and ING must replace the contract by a trade with another counterparty at the then prevailing (possibly unfavourable) market price. This credit risk category is associated with derivatives transactions (exchange-traded derivatives, over- the-counter (OTC) derivatives and securities financing transactions). | Note | 4 | Financial assets at fair value through profit or loss
Note | 14 | Financial liabilities at fair value through profit or loss
Note | 37 | Offsetting financial assets and liabilities
Settlement risk: arises when there is an exchange of value (funds or instruments) and receipt from its counterparty is not verified or expected until after ING has given irrevocable instructions to pay or has paid or delivered its side of the trade. The risk is that ING delivers but does not receive delivery from its counterparty. | Note | 4 | Financial assets at fair value through profit or loss
Note | 11 | Other assets
Note | 14 | Financial liabilities at fair value through profit or loss
Note | 16 | Other liabilities

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Credit risk
ING Bank Annual Report 2023 53
Credit risk appetite and concentration risk framework (*)
The credit risk appetite and concentration risk framework is designed to prevent undesired high levels of
credit risk and credit concentrations within various levels of the ING portfolio. It is derived from the concepts
of boundaries and instruments as described in the ING Risk Appetite Framework (RAF).
Credit risk appetite is the maximum level of credit risk ING is willing to accept for growth and value creation.
The credit risk appetite is linked to the overall bank-wide RAF. The credit risk appetite is expressed in
quantitative and qualitative measures. Having a credit risk appetite provides:
• Clarity about the credit risks that ING is prepared to assume, target setting and prudent risk
management. Credit risk appetite is used as an input for Lending guidances which are made by sector
and/or location;
• Consistent communication to different stakeholders;
• Guidelines on how to align reporting and monitoring tools with the organisational structure and strategy;
• Alignment of business strategies and key performance indicators of business units with ING’s credit risk
appetite through dynamic planning.
The credit risk appetite is set at different levels and dimensions within ING. The credit risk appetite
framework specifies the scope and focus of the credit risk which ING takes and the composition of the credit
portfolio, including its concentration and diversification objectives in relation to business lines, locations,
sectors and products. The credit risk appetite framework has also been extended to embed climate risk
elements. The first steps towards introducing climate risk elements in the credit risk appetite framework
were taken in 2022 and these have further evolved and matured in 2023. The climate risk elements within
the credit risk appetite framework allow for more efficient steering of sector concentrations from a climate
risk perspective.
The credit concentration risk framework is composed of:
• Country risk concentration: Country risk is the risk that arises due to events in a specific country (or group
of countries). To manage the maximum country loss ING is willing to accept, boundaries are approved by
the SB. The estimated level is correlated to the risk rating assigned to a given country. Actual country
limits are set by means of country instruments, which are monitored monthly and updated, when
needed. For countries with elevated levels of geopolitical or severe economic cycle risk, monitoring is
performed on a more frequent basis with strict pipeline and exposure management.
• Single name and secondary risk concentration: ING has an established credit concentration risk
framework to identify, measure and monitor single name concentration including secondary risk. The
same concept of boundaries and instruments is applicable.
• Sector and product concentration risk are managed via the credit risk appetite framework.
Credit risk models (*)
Within ING, internal CRR-compliant models are used to determine probability of default (PD), exposure at
default (EAD) and loss given default (LGD) for regulatory and economic capital purposes. These models also
form the basis of ING’s IFRS 9 loan loss provisioning (see ‘IFRS 9 models’ below). Bank-wide, ING has
implemented approximately 100 credit risk models, for regulatory capital, economic capital and loan loss
provisioning purposes.
There are two main types of PD, EAD and LGD models used throughout the bank:
• Statistical models are created where a large set of default or detailed loss data is available. They are
characterised by sufficient data points to facilitate meaningful statistical estimation of the model
parameters. The model parameters are estimated with statistical techniques based on the data set
available.
• Hybrid models are statistical models supplemented with knowledge and experience of experts from risk
management and front-office staff, literature from rating agencies, supervisors and academics. These
models are only used for ‘low default portfolios’, where limited historical defaults exist.
Credit risk rating process (*)
The majority of risk ratings are based on a risk rating (PD) model that complies with the minimum
requirements detailed in CRR/CRDIV, ECB Supervisory Rules and European Banking Authority (EBA)
guidelines. This concerns all borrower types and segments.
ING’s PD rating models are based on a 1-22 internal risk rating scale (1 = highest rating; 22 = lowest rating)
referred to as the ‘master scale’, which roughly corresponds to the rating grades that are assigned by
external rating agencies, such as Standard & Poor’s, Moody’s and Fitch. For example, an ING rating of 1
corresponds to an S&P/Fitch rating of AAA and a Moody’s rating of Aaa; an ING rating of 2 corresponds to an
S&P/Fitch rating of AA+ and a Moody’s rating of Aa1, and so on.
The 22 internal risk rating grades are composed of the following categories:
• Investment grade (risk rating 1-10);
• Non-investment grade (risk rating 11-17);
• Performing Restructuring (risk rating 18-19);
• Non-performing (risk rating 20-22).
The first three categories (1-19) are risk ratings for performing loans. Ratings are calculated in IT systems
with internally developed models, based on manually or automatically fed data, or for part of the non-
performing loans set by the global or regional credit restructuring department. Under certain conditions, the
outcome of a manually fed model can be challenged through a rating appeal process. For securitisation
portfolios, the external ratings of the tranche in which ING has invested are leading indicators.

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> Credit risk
ING Bank Annual Report 2023 54
Risk ratings assigned to clients are reviewed at least annually, with the performance of the underlying
models monitored regularly. Some of these models are global in nature, such as those for large corporates,
commercial banks, insurance companies, central governments, funds, fund managers, project finance and
leveraged companies. Other models are more regional or country-specific: there are PD models for small
and medium enterprises (SMEs) in the Netherlands, Belgium, Poland as well as residential mortgage and
consumer loan models in the various retail markets.
Rating models for Retail clients are predominantly statistically driven and automated, such that ratings can
be updated on a monthly basis. Rating models for large corporates, institutions and banks include both
statistical characteristics and manual input, with the ratings being manually updated at least annually.
More frequent reviews (e.g. quarterly) are performed where considered necessary, for example portfolios
and clients most at risk of being impacted by the Russian invasion of Ukraine and expected spillover effects.
In line with evolving regulatory expectations on models and emerging industry practices ING has embarked
a multi-year redevelopment process of its credit risk models. This is also in line with ING’s model governance
to ensure continuous improvement of models.
Credit risk systems
Credit risk tools and data standards
The acceptance, maintenance, measurement, management and reporting of credit risks at all levels of ING
are executed through single, common credit risk data standards using shared credit risk tools that support
standardised and transparent credit risk practices. ING has chosen to develop credit risk tools centrally with
the philosophy of using a single source of data in an integrated way. This includes applying a combination
of the ING policy, the regulatory environment in which we operate and the daily processes that are active
throughout the Group. Disciplined application in these three areas is essential for achieving high data quality
standards.
The credit risk control unit (CRCU), which is part of the Credit Risk department, manages the CRCU control
framework offering quality assurance on the regulatory areas of responsibility: the oversight and control of
rating systems. This framework leans on control execution in other teams such as model development in
Integrated Risk where the combination of these different teams is considered for the CRCU self-assessment.
Credit risk portfolio (*)
ING’s credit exposure is mainly related to lending to individuals (also referred to as consumer lending, all
Retail) and businesses (referred to as business lending, both in Retail and Wholesale) followed by
investments in bonds and securitised assets, and money market (Wholesale). Loans to individuals are
mainly mortgage loans secured by residential property. Loans (including guarantees issued) to businesses
are often collateralised, but may be unsecured based on the internal analysis of the borrower’s
creditworthiness. Bonds in the investment portfolio are generally unsecured, but predominantly consist of
bonds issued by central governments and EU and/or OECD-based financial institutions. Secured bonds, such
as mortgage-backed securities and asset-backed securities are secured by the underlying diversified pool of
assets (commercial or residential mortgages, car loans and/or other assets) held by the securities issuer. For
money market, exposure is mainly deposits to central banks. The last major credit risk source involves pre-
settlement exposures which arise from trading activities, including derivatives, repurchase transactions and
securities lending/borrowing transactions. This is also commonly referred to as counterparty credit risk.

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> Credit risk
ING Bank Annual Report 2023 55

Portfolio analysis per business line (*) |  |  |  |  |  |  |  |  |  |
Outstandings per line of business (*)1, 2, 3
in € million | Wholesale Banking | Retail Benelux | Retail Challengers & Growth Markets | Corporate Line | Total
Rating class | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Investment grade | 1 (AAA) | 52,716 | 89,686 | 310 | 324 | 34,373 | 32,492 | 2,284 | 2,529 | 89,682 | 125,032
2-4 (AA) | 67,034 | 49,320 | 7,089 | 7,871 | 52,566 | 40,498 | 6 | 12 | 126,694 | 97,701
5-7 (A) | 95,320 | 79,292 | 44,026 | 45,471 | 88,051 | 61,422 | 147 | 320 | 227,543 | 186,505
8-10 (BBB) | 123,081 | 129,709 | 118,340 | 117,172 | 27,955 | 56,046 | 2,357 | 2,497 | 271,733 | 305,424
Non-Investment grade | 11-13 (BB) | 57,348 | 56,409 | 57,652 | 55,945 | 36,756 | 46,657 |  | 4 | 151,756 | 159,016
14-16 (B) | 12,234 | 13,693 | 16,872 | 14,224 | 12,459 | 11,662 |  |  | 41,565 | 39,579
17 (CCC) | 1,122 | 1,858 | 2,129 | 2,021 | 985 | 1,014 | 196 | 299 | 4,431 | 5,192
Performing Restructuring loans | 18 (CC) | 2,523 | 3,564 | 1,363 | 1,304 | 594 | 519 |  |  | 4,481 | 5,386
19 (C) | 535 | 731 | 876 | 962 | 437 | 490 |  |  | 1,848 | 2,183
Non-performing loans | 20-22 (D) | 4,051 | 4,354 | 4,586 | 4,762 | 3,036 | 2,592 |  |  | 11,673 | 11,708
Total | 415,965 | 428,616 | 253,241 | 250,056 | 257,211 | 253,391 | 4,989 | 5,662 | 931,406 | 937,725
Industry |  |  |  |  |  |  |  |  |  |  |
Private Individuals |  | 2,330 | 32 | 165,447 | 163,243 | 193,610 | 191,556 |  |  | 361,387 | 354,831
Central Banks |  | 70,139 | 80,006 |  |  | 21,740 | 23,541 | 2,269 | 1,495 | 94,147 | 105,043
Natural Resources |  | 40,511 | 44,695 | 1,259 | 1,160 | 624 | 694 |  |  | 42,394 | 46,549
Real Estate |  | 24,904 | 26,426 | 23,675 | 22,648 | 2,936 | 3,439 |  |  | 51,515 | 52,513
Commercial Banks |  | 37,393 | 42,036 | 177 | 194 | 6,006 | 5,721 | 2,515 | 2,911 | 46,091 | 50,863
Non-Bank Financial Institutions |  | 55,313 | 54,274 | 1,400 | 1,379 | 890 | 504 | 89 | 102 | 57,692 | 56,258
Central Governments |  | 45,316 | 41,622 | 2,124 | 2,880 | 5,180 | 3,838 | 1 | 1,016 | 52,621 | 49,356
Transportation & Logistics |  | 27,106 | 25,474 | 4,105 | 4,038 | 1,679 | 1,471 |  |  | 32,890 | 30,982
Utilities |  | 23,324 | 22,683 | 2,024 | 1,865 | 160 | 150 |  |  | 25,509 | 24,698
Food, Beverages & Personal Care |  | 13,503 | 13,681 | 7,307 | 7,356 | 2,576 | 2,585 |  |  | 23,386 | 23,623
Services |  | 9,128 | 9,926 | 11,596 | 11,606 | 1,276 | 981 | 24 | 33 | 22,023 | 22,546
General Industries |  | 12,039 | 11,731 | 5,680 | 5,753 | 3,406 | 3,381 |  |  | 21,126 | 20,865
Lower Public Administration |  | 6,211 | 6,020 | 6,885 | 5,921 | 10,608 | 9,725 |  |  | 23,704 | 21,666
Other | 48,748 | 50,009 | 21,563 | 22,014 | 6,519 | 5,805 | 92 | 104 | 76,922 | 77,932
Total | 415,965 | 428,616 | 253,241 | 250,056 | 257,211 | 253,391 | 4,989 | 5,662 | 931,406 | 937,725

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Credit risk
ING Bank Annual Report 2023 56

Outstandings per line of business (*) - continued 1, 2, 3
in € million | Wholesale Banking | Retail Benelux | Retail Challengers & Growth Markets | Corporate Line | Total
Region | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Europe | Netherlands | 54,989 | 61,143 | 155,792 | 154,253 | 390 | 254 | 2,366 | 2,898 | 213,537 | 218,548
Belgium | 24,171 | 27,144 | 90,450 | 88,767 | 1,294 | 669 | 7 | 0 | 115,921 | 116,580
Germany | 26,152 | 24,441 | 478 | 463 | 128,407 | 127,764 | 31 | 63 | 155,067 | 152,730
Poland | 20,346 | 16,350 | 9 | 49 | 28,962 | 26,831 | 0 | 0 | 49,317 | 43,229
Spain | 11,047 | 10,491 | 109 | 71 | 27,049 | 25,649 | 35 | 25 | 38,240 | 36,237
United Kingdom | 28,587 | 27,735 | 150 | 152 | 125 | 185 | 112 | 107 | 28,974 | 28,179
Luxembourg | 23,805 | 26,113 | 4,880 | 4,953 | 677 | 639 | 0 | 15 | 29,363 | 31,720
France | 21,528 | 18,484 | 698 | 643 | 2,410 | 4,448 | 14 | 1 | 24,650 | 23,576
Rest of Europe | 65,157 | 77,814 | 367 | 400 | 20,001 | 18,750 | 32 | 24 | 85,558 | 96,989
America | 78,851 | 80,444 | 201 | 190 | 1,841 | 1,795 | 25 | 22 | 80,917 | 82,450
Asia | 49,851 | 46,291 | 69 | 73 | 90 | 121 | 2,365 | 2,504 | 52,374 | 48,989
Australia | 9,409 | 9,817 | 14 | 16 | 45,963 | 46,281 | 2 | 2 | 55,389 | 56,116
Africa | 2,071 | 2,348 | 24 | 28 | 2 | 5 | 0 | 0 | 2,098 | 2,381
Total | 415,965 | 428,616 | 253,241 | 250,056 | 257,211 | 253,391 | 4,989 | 5,662 | 931,406 | 937,725

1 Based on credit risk measurement contained in lending, pre-settlement, money market and investment activities.
2 Based on the total amount of credit risk in the respective column using ING’s internal credit risk measurement methodologies. Economic sectors (industry) below 2% are not shown separately but grouped in Other.
3 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Overall portfolio (*)
During 2023, ING’s portfolio size decreased by €6.3 billion (-0.67%) to €931.4 billion outstanding. Foreign
exchange rate changes had a negative impact on the portfolio growth, mainly in WB, decreasing total
outstanding by €4.6 billion, driven by the depreciation of the US dollar (-3.8%) against the euro, Australian
dollar (-3.4%) and Turkish lira (-42.1%), partly compensated by the Polish zloty (+6.8%).
Rating distribution (*)
Overall, the rating class distribution remained stable in 2023. The share of investment grade rating classes
increased from 76.2% to 76.8%, while the share of non-investment grade decreased from 21.7% to 21.2%.
Performing restructuring outstandings decreased from 0.8% to 0.7% of the total portfolio, whereas non-
performing loans increased from 1.2% to 1.3%. The decrease in AAA and the increase in AA was mainly due
to lower Central banks/Central Governments exposure in AAA-rated countries, partly driven by the
downgrade of the USA to AA rating.
With respect to the rating distribution within the business lines, in WB, investment grade remained at 81.2%,
where non-investment grade exposures increased to 17.1% (from 16.8%) compared to 2022. Performing
Restructuring assets decreased from 1.0% to 0.7% of total Wholesale Banking assets. The share of non-
performing loans for WB remained stable at 1.0%.
The non-investment grade portfolio of Retail Benelux increased from 28.9% to 30.3% of the portfolio, which
is explained primarily by rating migration in mortgages in Belgium. Performing restructuring remained flat
at 0.9% whereas NPL improved to 1.8% (from 1.9%) in 2023.
In Retail Challengers & Growth Markets, the distribution across rating classes remained stable in 2023.
Overall share of investment grade increased from 75.2% to 78.9%. NPL increased to 1.2% (from 1.0%).
Industry (*)
The industry breakdown is presented in accordance with the NAICS definition. Total volume decreased in
2023 from €938.1 billion to €931.6 billion (-0.7%), mainly witnessed in Netherlands (-2.3%) and in
Luxembourg (-7.4%) due to a decrease in outstanding at Central Banks. The largest part of our book in terms
of outstandings is in private individuals with 38.8% (2022: 37.8%). Private individuals accounted for 67%
outstanding in Germany, 67% in Spain, 66% Australia and 55% in the Netherlands. The increase in WB
Private individuals is following the discontinuation of Retail Banking France which led to the transfer of the
Retail individuals portfolio from Retail Banking to Wholesale Banking.

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> Credit risk
ING Bank Annual Report 2023 57
Looking at sectors in the Business Lending portfolio, the most notable decrease in outstanding, next to
Central Banks, was in Natural Resources (-€4.2 billion).

Outstandings by economic sectors and geographical area (*) 1
in € million | Region |  |  |  |  |  |  |  |  |  |  |  |  | Total
Industry | Netherlands | Belgium | Germany | Poland | Spain | United Kingdom | Luxembourg | France | Rest of Europe | America | Asia | Australia | Africa | 2023
Private Individuals | 116,530 | 44,637 | 103,151 | 14,860 | 25,452 | 128 | 3,347 | 2,472 | 14,179 | 149 | 121 | 36,340 | 20 | 361,387
Central Banks | 31,017 | 9,756 | 18,945 | 2,530 | 489 | 4,335 | 4,853 | 0 | 6,166 | 0 | 13,668 | 2,379 | 9 | 94,147
Natural Resources | 2,623 | 1,346 | 1,017 | 685 | 129 | 3,789 | 2,511 | 429 | 10,608 | 8,237 | 9,785 | 941 | 295 | 42,394
Real Estate | 16,907 | 10,986 | 1,111 | 2,184 | 1,551 | 420 | 3,563 | 2,901 | 3,492 | 3,323 | 1,367 | 3,709 | 0 | 51,515
Commercial Banks | 1,268 | 404 | 4,050 | 601 | 353 | 4,488 | 5,070 | 4,155 | 6,757 | 9,833 | 8,182 | 719 | 210 | 46,091
Non-Bank Financial Institutions | 2,573 | 1,457 | 5,710 | 2,532 | 652 | 6,837 | 4,631 | 4,274 | 4,269 | 19,921 | 3,884 | 950 | 0 | 57,692
Central Governments | 1,620 | 9,046 | 699 | 8,614 | 5,491 | 41 | 79 | 2,255 | 9,384 | 13,752 | 520 | 526 | 593 | 52,621
Transportation & Logistics | 3,860 | 2,198 | 1,277 | 1,598 | 658 | 2,113 | 596 | 784 | 8,177 | 3,511 | 7,044 | 456 | 618 | 32,890
Utilities | 2,419 | 1,634 | 3,516 | 792 | 912 | 2,723 | 480 | 619 | 4,469 | 4,424 | 1,306 | 2,041 | 173 | 25,509
Food, Beverages & Personal Care | 7,138 | 3,127 | 550 | 2,242 | 490 | 540 | 1,505 | 1,250 | 2,455 | 2,652 | 1,140 | 281 | 18 | 23,386
Services | 5,073 | 8,463 | 1,725 | 1,325 | 71 | 745 | 502 | 380 | 1,052 | 1,576 | 469 | 642 | 0 | 22,023
General Industries | 5,746 | 2,604 | 1,193 | 2,827 | 333 | 199 | 649 | 287 | 3,661 | 2,848 | 761 | 18 | 0 | 21,126
Lower Public Administration | 253 | 6,607 | 5,349 | 669 | 350 | 0 | 249 | 3,488 | 356 | 1,550 | 7 | 4,826 | 0 | 23,704
Other | 16,510 | 13,657 | 6,774 | 7,858 | 1,309 | 2,615 | 1,326 | 1,356 | 10,532 | 9,141 | 4,120 | 1,562 | 163 | 76,922
Total | 213,537 | 115,921 | 155,067 | 49,317 | 38,240 | 28,974 | 29,363 | 24,650 | 85,558 | 80,917 | 52,374 | 55,389 | 2,098 | 931,406
Rating class |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade | 170,118 | 71,730 | 136,675 | 31,772 | 29,583 | 24,299 | 24,083 | 18,692 | 56,404 | 63,652 | 44,481 | 44,139 | 24 | 715,653
Non-Investment grade | 40,399 | 40,236 | 16,929 | 15,785 | 8,134 | 4,508 | 5,013 | 5,713 | 25,967 | 15,806 | 6,769 | 10,715 | 1,776 | 197,751
Performing restructuring | 1,433 | 799 | 349 | 830 | 230 | 2 | 105 | 122 | 1,983 | 245 | 72 | 132 | 26 | 6,328
Non-performing loans | 1,587 | 3,155 | 1,114 | 929 | 293 | 165 | 162 | 124 | 1,205 | 1,213 | 1,051 | 403 | 272 | 11,673
Total | 213,537 | 115,921 | 155,067 | 49,317 | 38,240 | 28,974 | 29,363 | 24,650 | 85,558 | 80,917 | 52,373 | 55,389 | 2,098 | 931,406
1 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.

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> Credit risk
ING Bank Annual Report 2023 58

Outstandings by economic sectors and geographical area (*) 1
in € million | Region |  |  |  |  |  |  |  |  |  |  |  |  | Total
Industry | Netherlands | Belgium | Germany | Poland | Spain | United Kingdom | Luxembourg | France | Rest of Europe | America | Asia | Australia | Africa | 2022
Private Individuals | 114,625 | 44,193 | 101,529 | 13,767 | 24,865 | 138 | 3,486 | 2,731 | 13,654 | 161 | 131 | 35,528 | 24 | 354,831
Central Banks | 35,202 | 14,338 | 21,041 | 1,060 | 347 | 427 | 6,820 | 35 | 18,092 | 0 | 4,962 | 2,695 | 24 | 105,043
Natural Resources | 3,084 | 1,356 | 809 | 746 | 169 | 4,442 | 2,764 | 470 | 12,154 | 8,771 | 10,398 | 1,028 | 361 | 46,549
Real Estate | 17,586 | 10,112 | 1,388 | 2,374 | 1,391 | 413 | 3,797 | 3,155 | 3,378 | 3,474 | 1,180 | 4,263 | 2 | 52,513
Commercial Banks | 1,359 | 265 | 3,974 | 551 | 402 | 4,933 | 4,480 | 4,371 | 6,368 | 9,945 | 12,041 | 1,765 | 409 | 50,863
Non-Bank Financial Institutions | 2,710 | 1,041 | 5,054 | 2,299 | 99 | 8,229 | 4,489 | 3,220 | 4,495 | 19,636 | 4,091 | 896 | 0 | 56,258
Central Governments | 3,342 | 7,716 | 1,179 | 6,578 | 4,578 | 46 | 175 | 1,797 | 8,444 | 13,979 | 333 | 636 | 551 | 49,356
Transportation & Logistics | 3,967 | 2,183 | 608 | 1,300 | 690 | 1,787 | 583 | 733 | 7,808 | 3,378 | 6,806 | 531 | 608 | 30,982
Utilities | 1,551 | 1,630 | 2,814 | 679 | 1,227 | 2,953 | 572 | 980 | 4,302 | 4,347 | 1,545 | 1,897 | 200 | 24,698
Food, Beverages & Personal Care | 7,249 | 3,002 | 573 | 2,334 | 475 | 739 | 1,667 | 469 | 2,668 | 3,245 | 942 | 248 | 13 | 23,623
Services | 4,819 | 8,816 | 1,254 | 1,101 | 67 | 685 | 808 | 1,066 | 1,120 | 1,821 | 357 | 632 | 0 | 22,546
General Industries | 5,430 | 2,689 | 1,007 | 2,849 | 311 | 330 | 604 | 245 | 3,152 | 2,926 | 1,311 | 9 | 0 | 20,865
Lower Public Administration | 272 | 5,638 | 5,197 | 644 | 200 | 0 | 313 | 3,126 | 402 | 1,310 | 0 | 4,564 | 0 | 21,666
Other | 17,353 | 13,602 | 6,302 | 6,946 | 1,416 | 3,058 | 1,164 | 1,179 | 10,952 | 9,457 | 4,891 | 1,424 | 188 | 77,932
Total | 218,548 | 116,580 | 152,730 | 43,229 | 36,237 | 28,179 | 31,720 | 23,576 | 96,989 | 82,450 | 48,989 | 56,116 | 2,381 | 937,725
Rating class |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade | 174,972 | 76,244 | 130,285 | 27,501 | 28,556 | 23,160 | 26,053 | 17,545 | 64,884 | 63,870 | 39,903 | 41,476 | 213 | 714,662
Non-Investment grade | 40,325 | 36,036 | 20,967 | 14,596 | 7,330 | 4,634 | 5,442 | 5,814 | 27,617 | 17,615 | 7,638 | 13,914 | 1,858 | 203,786
Sub-standard grade | 1,508 | 984 | 579 | 422 | 105 | 41 | 80 | 16 | 2,903 | 311 | 124 | 257 | 239 | 7,569
Non-performing loans | 1,743 | 3,316 | 899 | 710 | 246 | 344 | 145 | 201 | 1,584 | 654 | 1,325 | 470 | 72 | 11,708
Total | 218,548 | 116,580 | 152,730 | 43,229 | 36,237 | 28,179 | 31,720 | 23,576 | 96,989 | 82,450 | 48,989 | 56,116 | 2,381 | 937,725

1 Geographical areas are based on country of residence, except for private individuals for which the geographical areas are based on the primary country of risk.
Portfolio analysis per geographical area (*)
The portfolio analysis per geographical area re-emphasises the international distribution of ING’s credit
portfolio. The share of the Netherlands in the overall portfolio (ex-Central Banks) reduced to 21.8% (2022:
22.0%).
The most noticeable trend in the Netherlands was the decrease in exposure with central banks (-€4.2
billion). Outstandings to private individuals are at 63.9% (2022: 62.5%) of total outstandings (excl. Central
Banks). In Belgium, no substantial changes were observed in the portfolio.
In terms of rating distribution in individual countries, the total share of investment grade/non-investment
grade remains substantial for the Netherlands at 98.6% (2022: 98.5%) and in Belgium 96.6% (2022: 96.3%).
Performing restructuring grade assets remained flat in the Netherlands at 0.7%, whereas Belgium
decreased from 0.8% to 0.7%. The NPL share decreased in 2023, from 0.8% to 0.7% in the Netherlands, and
from 2.8% to 2.7% in Belgium.
In Challengers & Growth Markets, ING has a sizeable residential mortgages portfolio in Germany, Australia,
Spain and Poland.

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> Credit risk
ING Bank Annual Report 2023 59
The top five countries within Rest of Europe based on outstandings were: Italy (€18.7 billion), Romania
(€11.5 billion), Switzerland (€11.2 billion), Türkiye (€7.2 billion) and Ireland (€4.7 billion).
In Europe, outside the Benelux, rating distribution in most countries remained stable. The most noticeable
changes in rating distribution were observed in Rest of Europe, where the development of the Russian
portfolio caused a decrease into Performing Restructuring from 3.0% to 2.3%. Note the paragraph on
Russian exposures in section 'Risk management at ING Bank'. Apart from Russia, noticeable changes
occurred in the UK, where NPL decreased from 1.2% to 0.6%.
In terms of rating distribution for the Americas region, an increase in NPL is observed to 1.5% (from 0.8%),
whereas in Asia, NPL decreased from 2.7% to 2.0%. In Africa, NPL increased from 3.0% to 13.0%, driven by
one well-covered file.
Credit risk mitigation (*)
ING uses various techniques and instruments to mitigate the credit risk associated with an exposure and to
reduce the losses incurred subsequent to a default by a customer. The most common terminology used in
ING for credit risk protection is ‘cover’. While a cover may be an important mitigant of credit risk and an
alternative source of repayment, generally it is ING’s practice to lend on the basis of the customer’s
creditworthiness rather than exclusively relying on the value of the cover.
Cover forms (*)
Within ING, there are two distinct forms of covers. First, where the asset has been pledged to ING as
collateral or security, ING has the right to liquidate it should the customer be unable to fulfil its financial
obligation. As such, the proceeds can be applied towards full or partial compensation of the customer's
outstanding exposure. This may be tangible (such as cash, securities, receivables, inventory, plant and
machinery, and mortgages on real estate properties) or intangible (such as patents, trademarks, contract
rights and licences). Second, where there is a third-party obligation, indemnification or undertaking (either
by contract and/or by law), ING has the right to claim from that third party an amount if the customer fails
on its obligations. The most common examples are guarantees, such as parent guarantees, export credit
insurances or third-party pledged mortgages. Insurance or reinsurance covers, including comprehensive
private risk insurance (CPRI) may be recognised as guarantees and effectively function in an equivalent
manner. ING accepts credit risk insurance companies and export credit agencies (ECAs) as cover providers.
Cover valuation methodology (*)
General guidelines for cover valuation are established with the objective of ensuring consistent application
within ING. These also require that the value of the cover is monitored on a regular basis. Covers are
revalued periodically and whenever there is reason to believe that the market is subject to significant
changes in conditions. The frequency of monitoring and revaluation depends on the type of cover.
The valuation method also depends on the type of covers. For asset collateral, the valuation sources can be
the customer’s balance sheet (e.g. inventory, machinery and equipment), nominal value (e.g. cash and
receivables), market value (e.g. securities and commodities), independent valuations (e.g. commercial real
estate) and market indices (e.g. residential real estate). For third-party obligations, the valuation is based on
the value that is attributed to the contract between ING and that third party.
Where collateral values are used in the calculation of stage 3 individual loan loss provisions, haircuts may be
applied to the valuation in specific circumstances, to sufficiently include all relevant factors impacting future
cash flows. ING applies haircuts to the collateral values of real estate, shipping and aviation assets that are
used in the calculation of the loss-given-default in recovery scenarios. The haircut reflects the risks of
adverse price developments between the moment of valuation of an asset and the actual settlement/cash
receipt.
Cover values (*)
This section provides insight into the types of cover and the extent to which exposures benefit from
collateral or guarantees. The disclosure differentiates between risk categories (lending, investment, money
market and pre-settlement). The most relevant types of cover include mortgages, financial collateral (cash
and securities) and guarantees. ING obtains cover that is eligible for credit risk mitigation under CRR/CRDIV,
as well as cover that is not eligible. Collateral covering financial market transactions is valued on a daily
basis, and as such not included in the following tables. To mitigate the credit risk arising from financial
markets transactions, the bank enters into legal agreements governing the exchange of financial collateral
(high-quality government bonds and cash).
The cover values are presented for the total portfolio of ING, both the performing and non-performing
portfolio. Our definition of non-performing is explained in detail in ‘Credit restructuring’ (below).
The next table gives an overview of the collateralisation of the ING’s total portfolio.

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> Credit risk
ING Bank Annual Report 2023 60

Cover values including guarantees received (*)
in € million |  | Cover type and value | Collateralisation
2023 | Outstandings | Mortgages | Financial Collateral | Guarantees | Other covers | No Cover | Partially covered | Fully covered
Consumer lending | 360,124 | 804,994 | 22,401 | 25,269 | 29,070 | 6.2% | 2.0% | 91.8%
Business lending | 363,680 | 162,491 | 26,333 | 115,944 | 428,531 | 35.2% | 22.5% | 42.3%
Investment and money market | 158,506 |  | 0 | 1,040 | 549 | 99.0% | 0.6% | 0.4%
Total lending, investment and money market | 882,309 | 967,485 | 48,735 | 142,252 | 458,149 | 34.8% | 10.2% | 55.0%
of which NPL | 11,653 | 8,880 | 1,609 | 3,204 | 9,241 | 25.7% | 26.9% | 47.4%
Pre-settlement | 49,096 |  |  |  |  |  |  |
Total Bank | 931,406 |  |  |  |  |  |  |

Cover values including guarantees received (*)
in € million |  | Cover type and value | Collateralisation
2022 | Outstandings | Mortgages | Financial Collateral | Guarantees | Other covers | No Cover | Partially covered | Fully covered
Consumer lending | 353,323 | 700,961 | 5,626 | 24,231 | 42,817 | 6.2% | 7.6% | 86.2%
Business lending | 379,070 | 167,122 | 29,501 | 118,294 | 438,864 | 37.5% | 22.3% | 40.2%
Investment and money market | 141,432 | — | 5 | 1,213 | 2 | 99.1% | 0.6% | 0.3%
Total lending, investment and money market | 873,824 | 868,083 | 35,132 | 143,738 | 481,683 | 34.8% | 12.9% | 52.3%
of which NPL | 11,637 | 7,738 | 1,007 | 3,648 | 3,045 | 25.2% | 25.7% | 49.2%
Pre-settlement | 63,901 |  |  |  |  |  |  |
Total Bank | 937,725 |  |  |  |  |  |  |

Excluding the pre-settlement portfolio, 55.0% (2022: 52.3%) of ING’s outstandings were fully collateralised in
2023. Since investments traditionally do not require covers, the percentage for ‘no covers’ in this portfolio is
above 95%. However, 99% of the investment outstanding is investment grade. Improved economic
conditions in ING’s main markets contributed to improved collateral valuations, observed in consumer
lending.
Consumer lending portfolio (*)
The consumer lending portfolio accounts for 38.7% (2022: 37.7%) of ING’s total outstanding, primarily
consisting of residential mortgage loans and other consumer lending loans. As a result, most collateral
consists of mortgages. Mortgage values are collected in an internal central database and in most cases
external data is used to index the market value. A significant part of ING’s residential mortgage portfolio is in
the Netherlands (34.8%), Germany (28.0%), Belgium including Luxembourg (13.3%) and Australia (10.9%).
Note that the large increase in Financial Collateral and decrease in Other covers is related to a
reclassification of certain cover types.
Business lending portfolio (*)
Business lending accounts for 39.1% (2022: 40.4%) of ING’s total outstanding. Business lending presented in
this section does not include pre-settlement, investment and money market exposures.

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> Credit risk
ING Bank Annual Report 2023 61
Credit quality (*)

Credit risk ratings
| Regular | Watch List | Restructuring 1 | Non-performing 1
Possible ratings | 1–19 | 1–19 | 11–20 | 20-22
Typical ratings | 1–14 | 15–17 | 18–20 | 20-22
Deterioration in risk | Not significant | Significant | Significant | Significant
Significant intervention | Not required | Not required | Required | Required
Account Ownership | Front Office | Front Office | Front Office | Front Office
Credit Risk Management | Regular | Regular | Credit Restructuring | Credit Restructuring
Primary Manager | Front Office | Front Office | Credit Restructuring | Credit Restructuring
Accounting provisioning | Stage 1/2 | Stage 1/2 | Stage 2/3 | Stage 3

1 Restructuring can be performing and non-performing; reference is made to the Credit restructuring section.

Credit quality outstandings (*)
in € million | 2023 | 2022
Performing not past due | 795,796 | 799,655
Business lending performing past due | 8,825 | 7,659
Consumer lending performing past due | 846 | 780
Non-performing | 11,653 | 11,691
Total lending and investment | 817,120 | 819,785
Money market | 65,189 | 54,039
Pre-settlement | 49,096 | 63,901
Total | 931,406 | 937,725

Past due obligations (*)
Retail Banking measures its portfolio in terms of payment arrears and determines on a monthly basis if
there are any significant changes in the level of arrears. This methodology is applicable to private
individuals, as well as business lending. An obligation is considered ‘past due’ if a payment of interest or
principal is more than one day late. ING aims to help its customers as soon as they are past due by
reminding them of their payment obligations. In its contact with the customers, ING aims to solve the
(potential) financial difficulties by offering a range of measures (e.g. payment arrangements, restructuring).
If the issues cannot be cured, for example because the customer is unable or unwilling to pay, the contract
is sent to the recovery unit. The facility is downgraded to risk rating 20 (non-performing) when the facility or
obligor – depending on the level at which the non-performing status is applied – is more than 90 days past
due and to risk rating 21 or 22 in case of an exit scenario.
ING has aligned the regulatory concept of non-performing with that of the definition of default. Hence, in
WB, obligors are classified as non-performing when a default trigger occurs:
• ING believes the borrower is unlikely to pay. The borrower has evidenced significant financial difficulty, to
the extent that it will have a negative impact on the future cash flows of the financial asset. The
following events could be seen as indicators of financial difficulty:
• The borrower (or third party) has started insolvency proceedings;
• A group company/co-borrower has NPL status;
• Indication of fraud (affecting the company’s ability to service its debt);
• There is doubt as to the borrower’s ability to generate stable and sufficient cash flows to service its
debt;
• Restructuring of debt.
• ING has granted concessions relating to the borrower’s financial difficulty, the effect of which is a
reduction in expected future cash flows of the financial asset below current carrying amount.
• The obligor has failed in the payment of principal, interest or fees, the total past due amount is above the
materiality threshold and this remains the case for more than 90 consecutive days.
Further, WB has an individual name approach, using early warning indicators to signal possible future issues
in debt service.

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> Credit risk
ING Bank Annual Report 2023 62

Ageing analysis (past due but performing): Consumer lending portfolio by geographic area, outstandings (*)1
in € million | 2023 | 2022
Region | Past due for 1–30 days | Past due for 31–60 days | Past due for 61–90 days | Total | Past due for 1–30 days | Past due for 31–60 days | Past due for 61–90 days | Total
Europe | Belgium | 223 | 43 | 29 | 295 | 294 | 27 | 18 | 339
Germany | 89 | 40 | 18 | 147 | 68 | 34 | 13 | 116
Poland | 76 | 8 | 5 | 89 | 59 | 8 | 4 | 71
Netherlands | 67 | 24 | 6 | 97 | 36 | 10 | 5 | 51
Luxembourg | 21 | 2 | 2 | 25 | 43 | 4 | 2 | 48
Spain | 19 | 13 | 6 | 38 | 13 | 9 | 5 | 27
Rest of Europe | 64 | 19 | 11 | 94 | 62 | 16 | 8 | 86
America | 1 |  |  | 1 | 1 |  |  | 1
Asia |  |  |  | 1 |  |  |  |
Australia | 43 | 15 | 1 | 59 | 29 | 11 | 2 | 42
Total | 602 | 164 | 79 | 846 | 604 | 119 | 57 | 780

The past due but performing consumer lending outstanding increased by €66 million, mainly due to
increase in 31-60 (+€45 million) and 61-90 (+€23 million). The largest increase was observed in the
Netherlands (+€47 million) and Germany (+€31 million) mainly in the 1-30-day bucket; the largest decrease
was seen in Belgium (-€44 million) driven by the decrease in the 1-30 bucket.

Ageing analysis (past due but performing): Business lending portfolio by geographic area, outstandings (*)
in € million | 2023 | 2022
Region | Past due for 1–30 days | Past due for 31–60 days | Past due for 61–90 days | Total | Past due for 1–30 days | Past due for 31–60 days | Past due for 61–90 days | Past due for >90 days | Total
Europe | Belgium | 929 | 98 | 11 | 1,037 | 579 | 49 | 10 |  | 639
United Kingdom | 623 | 659 | 128 | 1,410 | 1,147 | 77 | 512 |  | 1,736
Luxembourg | 577 | 8 | 11 | 596 | 302 | 1 |  |  | 303
Netherlands | 509 | 10 | 12 | 531 | 730 | 30 | 15 |  | 775
Poland | 346 | 26 | 10 | 383 | 279 | 35 | 14 |  | 329
France | 58 | 132 |  | 190 | 83 | 6 |  |  | 90
Germany | 131 | 110 | 1 | 242 | 44 | 16 |  |  | 60
Rest of Europe | 972 | 2 | 2 | 977 | 474 | 239 | 1 | 1 | 715
America | 2,508 | 101 | 41 | 2,650 | 1,901 | 67 | 19 |  | 1,986
Asia | 284 |  | 22 | 306 | 553 | 48 |  |  | 601
Australia | 501 | 1 |  | 502 | 359 | 61 | 4 | 2 | 426
Total | 7,437 | 1,148 | 240 | 8,825 | 6,452 | 629 | 575 | 4 | 7,659

Total past due but performing outstanding of business lending increased by €1.2 billion. Increase is observed
in the 1-30 days (€1.0 billion) past due bucket and in the 31-60 days (€0.5 billion), partly offset by a
decrease in the 61–90 days past due bucket(-€336 million), driven by the United Kingdom (-€383 million).

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> Credit risk
ING Bank Annual Report 2023 63
Credit restructuring (*)
Global Credit Restructuring (GCR) is the dedicated and independent department that deals with non-
performing loans and loans that hold a reasonable probability that ING will end up with a loss, if no specific
action is taken. GCR handles accounts or portfolios requiring an active approach, which may include
renegotiation of terms and conditions and business or financial restructuring. The loans are managed by
GCR or by units in the various regions and business units. ING uses three distinct statuses to categorise the
management of clients with (perceived) deteriorating credit risk profiles, i.e. there is increasing doubt as to
the performance and the collectability of the client’s contractual obligations:
• Watch list: Usually, a client is first classified as watch list when there are concerns of any potential or
material deterioration in credit risk profile that may affect the ability of the client to adhere to its debt
service obligations or to refinance its existing loans. Watch list status requires more than usual attention,
increased monitoring and quarterly reviews. Some clients with a watch list status may develop into a
restructuring status or even a recovery status.
• Restructuring: A client is classified as restructuring when there are concerns about the client’s financial
stability, credit worthiness, and/or ability to repay, but where the situation does not require the
termination or acceleration of facilities or the liquidation of collateral. ING’s actions aim to maintain the
going concern status of the client by:
• restoring the client’s financial stability;
• supporting the client’s turnaround;
• restoring the balance between debt and equity; and
• restructuring the debt to a sustainable situation.
• Recovery: A client is classified as in recovery when ING and/or the client concludes that the client’s
financial situation cannot be restored and a decision is made to terminate the (credit) relationship or
even to enter into bankruptcy. ING prefers an amicable exit, but will enforce and liquidate the collateral
or claim under the guarantees if deemed necessary.
Watch list, restructuring and recovery accounts are reviewed at least quarterly by the front office, GCR and
the relevant credit risk management executives.
Forbearance (*)
Forbearance occurs when a client is unable to meet their financial commitments due to financial difficulties
they face or are about to face and ING grants concessions towards them. Forborne assets are assets in
respect of which forbearance measures have been granted.
Forbearance may enable clients experiencing financial difficulties to continue repaying their debt.
For business clients, ING mainly applies forbearance measures to support clients with fundamentally sound
business models that are experiencing temporary difficulties with the aim of maximising the client’s
repayment ability and therewith avoiding a default situation or helping the client to return to a performing
situation.
For ING retail units, clear criteria have been established to determine whether a client is eligible for the
forbearance process. Specific approval mandates are in place to approve the measures, as well as
procedures to manage, monitor and report the forbearance activities.
ING reviews the performance of forborne exposures at least quarterly, either on a case-by-case (business) or
on a portfolio (retail) basis.
All exposures are eligible for forbearance measures, i.e. both performing (risk ratings 1-19) and non-
performing (risk ratings 20-22) exposures. ING uses specific criteria to move forborne exposures from non-
performing to performing or to remove the forbearance statuses that are consistent with the corresponding
European Banking Authority (EBA) standards. An exposure is reported as forborne for a minimum of two
years. An additional one-year probation period is applied to forborne exposures that move from non-
performing back to performing.

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> Credit risk
ING Bank Annual Report 2023 64

Summary Forborne portfolio (*)
in € million | 2023 | 2022
Business line | Outstandings | Of which: performing | Of which: non- performing | % of total portfolio | Outstandings | Of which: performing | Of which: non- performing | % of total portfolio
Wholesale Banking | 6,063 | 3,919 | 2,144 | 1.9% | 8,359 | 5,880 | 2,478 | 2.7%
Retail Banking | 7,026 | 4,128 | 2,898 | 1.4% | 8,080 | 4,973 | 3,107 | 1.6%
Total | 13,089 | 8,047 | 5,042 | 1.6% | 16,438 | 10,853 | 5,585 | 2.0%

Summary Forborne portfolio by forbearance type (*)
in € million | 2023 | 2022
Forbearance type | Outstandings | Of which: performing | Of which: non- performing | % of total portfolio | Outstandings | Of which: performing | Of which: non- performing | % of total portfolio
Loan modification | 11,881 | 7,550 | 4,331 | 1.4% | 15,317 | 10,428 | 4,889 | 1.9%
Refinancing | 1,208 | 497 | 711 | 0.1% | 1,121 | 426 | 695 | 0.1%
Total | 13,089 | 8,047 | 5,042 | 1.5% | 16,438 | 10,853 | 5,585 | 2.0%

As of 31 December 2023, ING’s total forborne assets decreased by €3.3 billion compared to 31 December
2022. WB decreased by €2.3 billion and Retail Banking decreased by €1.1 billion. The decreases are mainly
caused by passing the two-year probation period following the Covid-19 pandemic.
Wholesale Banking (*)
As of December 2023, WB forborne assets amounted to €6.1 billion (2022: €8.4 billion), which represented
1.9% (2022: 2.7%) of the total WB portfolio.

Wholesale Banking: Forborne portfolio by geographical area (*)
in € million | 2023 | 2022
Region | Outstandings | Of which: performing | Of which: non- | Outstandings | Of which: performing | Of which: non-
performing | performing
Europe | Netherlands | 361 | 301 | 60 | 720 | 630 | 90
Belgium | 454 | 446 | 8 | 659 | 651 | 8
Germany | 288 | 148 | 139 | 580 | 466 | 115
United Kingdom | 583 | 425 | 158 | 1,044 | 721 | 323
Italy | 54 | 19 | 34 | 205 | 157 | 48
Norway | 6 |  | 6 | 33 |  | 33
Poland | 520 | 519 |  | 203 | 189 | 14
Rest of Europe | 1,421 | 1,142 | 279 | 2,176 | 1,749 | 427
America | 1,025 | 532 | 493 | 1,353 | 1,032 | 321
Asia | 1,198 | 277 | 921 | 1,107 | 143 | 964
Australia | 87 | 87 |  | 217 | 132 | 85
Africa | 68 | 23 | 45 | 61 | 10 | 51
Total | 6,063 | 3,919 | 2,144 | 8,359 | 5,880 | 2,478

Wholesale Banking: Forborne portfolio by economic sector (*)
in € million | 2023 | 2022
Industry | Outstandings | Of which: performing | Of which: non- | Outstandings | Of which: performing | Of which: non-
performing | performing
Natural Resources | 788 | 321 | 467 | 1,239 | 603 | 636
Real Estate | 1,320 | 1,254 | 66 | 2,000 | 1,917 | 84
Transportation & Logistics | 315 | 175 | 139 | 1,073 | 868 | 205
Food, Beverages & Personal Care | 866 | 465 | 401 | 1,082 | 543 | 539
Services | 284 | 254 | 30 | 697 | 665 | 32
Automotive | 138 | 98 | 40 | 172 | 125 | 46
Utilities | 510 | 255 | 255 | 469 | 255 | 214
General Industries | 145 | 74 | 71 | 255 | 176 | 80
Retail | 282 | 104 | 178 | 302 | 227 | 76
Chemicals, Health & Pharmaceuticals | 571 | 559 | 11 | 191 | 168 | 23
Builders & Contractors | 133 | 72 | 61 | 168 | 94 | 74
Other | 712 | 287 | 425 | 710 | 240 | 469
Total | 6,063 | 3,919 | 2,144 | 8,359 | 5,880 | 2,478

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> Credit risk
ING Bank Annual Report 2023 65
The main concentration of forborne assets in a single country was in United States with 13.6% (2022:
11.5%) of the total WB forborne assets.
WB forborne assets decreased by €2.3 billion compared to 2022, also driven by passing the two-year
probation period following the Covid-19 pandemic. Decrease is mainly visible in the performing forborne
assets (-€2.0 billion), mainly in the industries Transportation & Logistics, Real Estate and Services. The
decrease was partial offset by an increase for Chemicals, Health and Pharmaceuticals, driven by a few large
individual clients.
WB's forborne assets are mainly concentrated in Real Estate, Food Beverages & Personal Care, Natural
Resources, Chemicals, Health & Pharmaceuticals, and Utilities. These five economic sectors accounted for
67% of the total WB forborne outstandings.
Retail Banking (*)
As of the end of December 2023, Retail Banking forborne assets totalled €7.0 billion, which represented 1.4%
of the total Retail Banking portfolio. The majority of forborne exposures were in private individuals with
50.5%.

Retail Banking: Forborne portfolio by geographical area (*)
in € million | 2023 | 2022
Region | Outstandings | Of which: performing | Of which: non- | Outstandings | Of which: performing | Of which: non-
performing | performing
Europe | Netherlands | 1,483 | 981 | 502 | 2,832 | 2,043 | 789
Belgium | 2,153 | 838 | 1,315 | 2,644 | 1,331 | 1,314
Germany | 1,309 | 1,064 | 246 | 804 | 610 | 194
Poland | 852 | 522 | 330 | 588 | 309 | 279
Türkiye | 25 | 15 | 10 | 64 | 31 | 32
Italy | 123 | 51 | 71 | 131 | 52 | 79
Romania | 135 | 49 | 86 | 124 | 53 | 71
Spain | 138 | 118 | 21 | 35 | 15 | 20
Rest of Europe | 88 | 58 | 30 | 73 | 48 | 25
America | 21 | 20 |  | 13 | 12 |
Asia | 2 | 1 | 1 | 3 | 1 | 1
Australia | 697 | 411 | 286 | 768 | 467 | 302
Africa |  |  |  | 1 |  |
Total | 7,026 | 4,128 | 2,898 | 8,080 | 4,973 | 3,107

The main concentration of forborne assets in a single country was in Belgium with 30.6% (2022: 32.7%) of
total Retail Banking forborne assets and 45.4% (2022: 42.3%) of the non-performing forborne assets. Next to
that, Netherlands had 21.1% (2022: 35.0%) of the total Retail forborne assets and Germany 18.6%
(2022:10.0%). The increase in Germany is driven by mortgages, where clients that choose for a repayment
percentage below a certain threshold, though contractually allowed, are conservatively considered forborn.
Non-performing loans (*)
ING’s loan portfolio is under constant review. Loans to obligors that are considered more than 90 days past
due and above applicable thresholds are reclassified as non-performing. For business lending portfolios,
there generally are reasons for declaring a loan non-performing prior to the obligor being 90 days past due.
These reasons include, but are not limited to, ING’s assessment of the customer’s perceived inability to meet
its financial obligations, or the customer filing for bankruptcy or bankruptcy protection.
The table below represents the breakdown by industry of credit risk outstandings that have been classified
as non-performing.

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> Credit risk
ING Bank Annual Report 2023 66

Non-performing Loans: outstandings by economic sector and business lines (*)1
in € million | Wholesale Banking | Retail Benelux | Retail Challengers & Growth Markets | Total
Industry | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Private Individuals | 4 |  | 2,210 | 2,174 | 2,206 | 1,954 | 4,419 | 4,129
Natural Resources | 669 | 1,369 | 60 | 34 | 25 | 17 | 754 | 1421
Food, Beverages & Personal Care | 565 | 672 | 363 | 438 | 157 | 122 | 1,085 | 1233
Transportation & Logistics | 437 | 367 | 69 | 165 | 65 | 51 | 572 | 583
Services | 101 | 119 | 415 | 448 | 66 | 61 | 582 | 628
Real Estate | 592 | 172 | 398 | 486 | 64 | 54 | 1,053 | 712
General Industries | 111 | 114 | 270 | 268 | 115 | 100 | 497 | 482
Builders & Contractors | 124 | 139 | 291 | 244 | 162 | 110 | 577 | 493
Retail | 207 | 98 | 121 | 107 | 67 | 39 | 395 | 244
Utilities | 331 | 387 | 12 | 7 | 6 | 7 | 348 | 401
Chemicals, Health & Pharmaceuticals | 101 | 175 | 97 | 115 | 35 | 20 | 233 | 310
Telecom | 378 | 288 | 9 | 12 | 3 | 3 | 390 | 303
Other | 412 | 440 | 270 | 260 | 66 | 52 | 748 | 753
Total | 4,034 | 4,340 | 4,583 | 4,759 | 3,036 | 2,592 | 11,653 | 11,691

1 Based on Lending and Investment outstandings.

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> Credit risk
ING Bank Annual Report 2023 67

Non-performing Loans: outstandings by economic sectors and geographical area (*)
in € million | Region |  |  |  |  |  |  |  |  |  |  |  |  | Total
Industry | Netherlands | Belgium | Germany | Poland | Spain | United Kingdom | France | Luxembourg | Rest of Europe | America | Asia | Australia | Africa | 2023
Private Individuals | 609 | 1,535 | 885 | 225 | 235 | 3 | 8 | 45 | 489 | 2 | 2 | 380 | 1 | 4,419
Natural Resources | 30 | 60 | 1 | 23 |  |  |  | 55 | 164 | 31 | 369 |  | 20 | 754
Food, Beverages & Personal Care | 281 | 157 | 1 | 131 |  | 139 | 7 |  | 158 | 82 | 128 |  |  | 1,085
Transportation & Logistics | 110 | 50 | 2 | 51 | 47 | 20 |  | 1 | 168 | 49 | 1 | 2 | 72 | 572
Services | 121 | 342 | 2 | 55 | 2 |  | 3 | 8 | 13 | 37 |  |  |  | 582
Real Estate | 40 | 297 | 53 | 55 | 9 |  | 36 | 16 | 7 | 519 |  | 21 |  | 1,053
General Industries | 145 | 127 | 49 | 99 |  |  | 2 | 7 | 24 | 42 |  |  |  | 496
Builders & Contractors | 113 | 181 | 2 | 135 |  |  |  | 22 | 91 | 32 |  |  |  | 577
Retail | 51 | 82 | 36 | 52 |  |  | 2 |  | 14 | 149 | 7 |  |  | 395
Utilities | 14 | 5 |  | 21 |  |  |  |  | 18 | 153 | 138 |  |  | 348
Chemicals, Health & Pharmaceuticals | 31 | 77 | 13 | 25 |  |  | 64 |  | 11 | 12 |  |  |  | 233
Telecom | 12 | 1 | 28 | 3 |  |  |  |  | 13 | 56 | 277 |  |  | 390
Other | 28 | 239 | 42 | 55 |  | 2 | 1 | 6 | 23 | 46 | 128 |  | 179 | 748
Total | 1,586 | 3,153 | 1,114 | 929 | 293 | 165 | 124 | 162 | 1,193 | 1,210 | 1,050 | 403 | 272 | 11,653

Non-performing Loans: outstandings by economic sectors and geographical area (*)
in € million | Region |  |  |  |  |  |  |  |  |  |  |  |  | Total
Industry | Netherlands | Belgium | Germany | Poland | Spain | United Kingdom | France | Luxembourg | Rest of Europe | America | Asia | Australia | Africa | 2022
Private Individuals | 574 | 1,538 | 739 | 185 | 194 | 4 | 11 | 36 | 470 | 3 | 4 | 370 | 1 | 4,129
Natural Resources | 57 | 33 |  | 14 |  |  |  | 53 | 432 | 77 | 649 | 85 | 21 | 1,421
Food, Beverages & Personal Care | 310 | 179 | 24 | 109 |  | 173 | 7 |  | 228 | 77 | 126 |  |  | 1,233
Transportation & Logistics | 232 | 58 | 1 | 36 | 47 | 20 |  | 2 | 154 | 24 | 7 | 1 |  | 583
Services | 136 | 375 | 2 | 43 | 5 |  | 3 | 2 | 21 | 40 |  |  |  | 628
Real Estate | 89 | 376 |  | 54 |  | 84 | 25 | 19 | 7 | 47 |  | 11 |  | 712
General Industries | 127 | 142 | 17 | 78 |  |  | 31 | 2 | 26 | 58 |  |  |  | 482
Builders & Contractors | 65 | 187 | 2 | 86 |  |  |  | 20 | 101 | 32 |  |  |  | 493
Retail | 31 | 85 | 38 | 26 |  |  | 18 | 1 | 13 | 22 | 7 | 2 |  | 244
Utilities | 6 | 6 | 26 | 23 |  |  |  |  | 17 | 194 | 129 |  |  | 401
Chemicals, Health & Pharmaceuticals | 51 | 100 | 2 | 15 |  | 14 | 100 |  | 28 |  |  |  |  | 310
Telecom | 24 | 1 |  | 3 |  |  |  |  |  | 5 | 270 |  |  | 303
Other | 40 | 232 | 48 | 38 |  | 50 |  | 10 | 79 | 75 | 130 |  | 51 | 753
Total | 1,742 | 3,312 | 899 | 710 | 246 | 344 | 196 | 145 | 1,578 | 654 | 1,324 | 470 | 72 | 11,691

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> Credit risk
ING Bank Annual Report 2023 68
In 2023, the NPL portfolio stayed relatively flat at €11.7 billion. An increase in Challengers & Growth retail (+
€0.4 billion) was offset by decreases in Wholesale Banking (-€0.3 billion) and Retail Benelux (-€0.2 billion).
The increase in Challengers & Growth Markets was mainly witnessed in private individuals. In Wholesale
Banking, the decrease in the Natural Resources sector was partially compensated by an increase in Real
Estate sector, especially in the Americas. The top three countries by NPL outstanding are Belgium, the
Netherlands and the Americas.
Loan loss provisioning (*)
ING recognises loss allowances based on the expected credit loss (ECL) model of IFRS 9, which is designed to
be forward-looking. The IFRS 9 impairment requirements are applicable to on-balance sheet financial assets
measured at amortised cost or fair value through other comprehensive income (FVOCI), such as loans, debt
securities and lease receivables, as well as off-balance-sheet items such as undrawn loan commitments,
financial- and non-financial guarantees issued.
ING distinguishes between two types of calculation methods for credit loss allowances:
• Collective 12-month ECL (Stage 1) and collective lifetime ECL (Stage 2) for portfolios of financial
instruments, as well as collective lifetime ECL for credit-impaired exposures (Stage 3) below €1 million;
• Individual lifetime ECL for credit-impaired (Stage 3) financial instruments with exposures above €1
million.
IFRS 9 models (*)
ING's IFRS 9 models leverage on the internal rating-based (IRB) models (PD, LGD, EAD), which include certain
required conservatism. To include IFRS 9 requirements, such regulatory conservatism is removed from the
ECL parameters (PD, LGD and EAD). The IFRS 9 models apply two other types of adjustments to the IRB ECL
parameters: (i) to the economic outlook and (ii) for Stage 2 and Stage 3 assets only, to the lifetime horizon.
The IFRS 9 model parameters are estimated based on statistical techniques and supported by expert
judgement.
ING has aligned the definition of default for regulatory purposes with the definition of ‘credit-impaired’
financial assets under IFRS 9 (Stage 3). ING has also aligned its definition of default between IFRS9 and the
regulatory technical standards (RTS) and EBA guidelines. More information can be found in section 1.5.6 of
the consolidated financial statements.
Climate and environmental risks in IFRS 9 models (*)
Climate risk drivers (physical and transition risks) can reduce the ability of businesses and households to
fulfil their obligations due on existing lending contracts. These may also lead to depreciation/ erosion of
collateral values which would translate into higher credit losses and loan-to-value ratios in the lending
portfolio of ING.
At this point in time it is not yet possible to incorporate climate risk separately into IFRS 9 ECL models given
the lack of sufficient empirical historical data and data limitations in the risk assessments on client level.
Where climate and environmental factors have impacted the economy in the recent past or present, these
impacts will currently be implicitly embedded in ING's IFRS9 ECL models through the projected
macroeconomic indicators (e.g. indirectly via GDP growth and unemployment rates). We note however that
our ECL models are primarily sensitive to the short-term economic outlook as we use a three-year time
horizon for macroeconomic outlook, after which a mean reversion approach is applied.
With regard to our evaluation of climate-related matters, where such events have already occurred (e.g.
floods, stranded assets etc.), the impact of such events is individually assessed in the calculation of Stage 3
Individual provisions or management adjustments to ECL models. For example, we consider whether
affected assets have suffered from a significant increase in credit risk (or are credit impaired) and whether
the ECL is appropriate.
Over the near-term time horizon, ING plans to continue to refine its methodologies to evaluate climate risks.
ING is working on putting into practice quantitative methodologies for climate and environmental (C&E) risk
identification, materiality assessment and risk appetite setting. Refer to ESG risk paragraph for further
details on ESG risk management. Going forward, ING aims to continue to close the gaps on climate risk data,
which will enable us to embed climate risks eventually into the IFRS 9 ECL models.

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> Credit risk
ING Bank Annual Report 2023 69

Reconciliation gross carrying amount (IFRS 9 eligible) and statement of financial position |  |  |  |  |  |  |
in € million | 2023 | 2022
| Gross Carrying Amount | Loan Loss Provisions | Cash and on- demand bank positions | Reverse Repurchase transactions | Cash collateral | Other | Statement of financial position | Gross Carrying Amount | Loan Loss Provisions | Cash and on- demand bank positions | Reverse Repurchase transactions | Cash collateral | Other | Statement of financial position
Amounts held at Central Banks | 90,602 | -5 | -794 |  |  | 410 | 90,214 | 88,349 | -12 | -1,170 |  |  | 447 | 87,614
Loans and Advances to Banks | 5,835 | -30 | 2,381 | 5,251 | 3,063 | 208 | 16,708 | 8,796 | -37 | 2,851 | 19,395 | 3,679 | 419 | 35,103
Financial Instruments FVOCI Loans | 983 | -8 |  |  |  | -24 | 951 | 640 | -1 |  |  |  | 4 | 643
Financial Instruments FVOCI Debt securities | 38,323 | -13 |  |  |  | -30 | 38,281 | 28,752 | -21 |  |  |  | 364 | 29,095
Securities at Amortised Cost | 48,770 | -22 |  |  |  | -435 | 48,313 | 48,372 | -17 |  |  |  | -195 | 48,160
Loans and Advances to customers | 647,925 | -5,621 |  | 499 | 3,914 | -4,265 | 642,453 | 642,678 | -5,984 |  | 1,306 | 4,176 | -6,619 | 635,557
Total on-balance (IFRS 9 eligible) | 832,439 | -5,697 | 1,587 | 5,750 | 6,978 | -4,137 | 836,919 | 817,587 | -6,071 | 1,681 | 20,701 | 7,855 | -5,580 | 836,173
Guarantees and irrevocable facilities (IFRS 9 eligible) | 192,458 | -142 |  |  |  |  |  | 149,732 | -29 |  |  |  |  |
Total Gross Carrying Amount (IFRS 9 eligible) | 1,024,897 | -5,839 |  |  |  |  |  | 967,319 | -6,101 |  |  |  |  |

This table presents the reconciliation between the statement of financial position and the gross carrying
amounts used for calculating the expected credit losses. No expected credit loss is calculated for cash, on-
demand bank positions, reverse repurchase transactions, cash collateral received in respect of derivatives
and other. Therefore these amounts are not included in the total gross carrying amount (IFRS 9 eligible).
Other includes value adjustments on hedged items, deferred acquisition costs on residential mortgages and
a receivable which is offset against a liquidity facility.
ING Bank changed its accounting policy for non-financial guarantees that are subject to contractual
indemnification rights (such as performance and other non-financial guarantees as well as letters of credit)
from IAS 37 principles to loan commitment accounting under IFRS 9. The re-scoping was triggered by the
introduction of IFRS 17 insurance contracts and results in reliable and more relevant information. The off
balance sheet IFRS 9 eligible guarantees and irrevocable facilities of 31 December 2022 have not been
restated to conform to current year presentation.
Portfolio quality (*)
The table below describes the portfolio composition over the different IFRS 9 stages and rating classes. The
Stage 1 portfolio represents 91.5% (2022: 91.5%) of the total gross carrying amounts, mainly composed of
investment grade, while Stage 2 makes up 7.4% (2022: 7.3%) and Stage 3 makes up 1.2% (2022: 1.2%) of
the total gross carrying amounts, respectively.

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> Credit risk
ING Bank Annual Report 2023 70

Gross carrying amount per IFRS 9 stage and rating class (*)1,2,3
in € million | 12-month ECL (Stage 1) | Lifetime ECL not credit impaired (Stage 2) | Lifetime ECL credit impaired (Stage 3) | Total
2023
Rating class | Gross Carrying Amount | Provisions | Gross Carrying Amount | Provisions | Gross Carrying Amount | Provisions | Gross Carrying Amount | Provisions
Investment grade | 1 (AAA) | 87,122 | 1 | 439 |  |  |  | 87,561 | 1
2-4 (AA) | 132,159 | 8 | 2,553 | 2 |  |  | 134,711 | 9
5-7 (A) | 231,018 | 24 | 6,188 | 6 |  |  | 237,206 | 30
8-10 (BBB) | 302,967 | 85 | 17,004 | 24 |  |  | 319,971 | 108
Non-Investment grade | 11-13 (BB) | 157,387 | 226 | 19,273 | 93 |  |  | 176,661 | 319
14-16 (B) | 26,414 | 164 | 19,336 | 455 |  |  | 45,750 | 618
17 (CCC) | 617 | 10 | 3,928 | 233 |  |  | 4,545 | 242
Performing Restructuring | 18 (CC) |  |  | 4,617 | 402 |  |  | 4,617 | 402
19 (C) |  |  | 1,919 | 221 |  |  | 1,919 | 221
Non-performing loans | 20-22 (D) |  |  |  |  | 11,956 | 3,887 | 11,956 | 3,887
Total | 937,684 | 517 | 75,257 | 1,435 | 11,956 | 3,887 | 1,024,897 | 5,839

1 Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (€151 billion) and other positions (€9 billion) not included in credit outstandings and non-IFRS 9 eligible assets (€67 billion, mainly pre-settlement exposures) included in credit
outstandings but not in the gross carrying amounts.
2 Includes impact from change in accounting policy as disclosed in table Changes in gross carrying amounts and loan loss provisions.
3 Stage 3 lifetime credit impaired provision includes €11 million on purchased or originated credit impaired.

Gross carrying amount per IFRS 9 stage and rating class (*)1,2
in € million | 12-month ECL (Stage 1) | Lifetime ECL not credit impaired (Stage 2) | Lifetime ECL credit impaired (Stage 3) | Total
2022
Rating class | Gross Carrying Amount | Provisions | Gross Carrying Amount | Provisions | Gross Carrying Amount | Provisions | Gross Carrying Amount | Provisions
Investment grade | 1 (AAA) | 100,885 | 2 | 284 |  |  |  | 101,169 | 2
2-4 (AA) | 98,181 | 5 | 2,493 | 1 |  |  | 100,675 | 6
5-7 (A) | 177,617 | 23 | 4,596 | 4 |  |  | 182,214 | 27
8-10 (BBB) | 320,972 | 98 | 14,714 | 29 |  |  | 335,687 | 127
Non-Investment grade | 11-13 (BB) | 155,910 | 277 | 17,365 | 91 |  |  | 173,275 | 368
14-16 (B) | 23,649 | 168 | 19,386 | 471 |  |  | 43,035 | 639
17 (CCC) | 7,671 | 8 | 4,572 | 194 |  |  | 12,244 | 202
Performing Restructuring | 18 (CC) |  |  | 5,198 | 595 |  |  | 5,198 | 595
19 (C) |  |  | 2,116 | 293 |  |  | 2,116 | 293
Non-performing loans | 20-22 (D) |  |  |  |  | 11,708 | 3,841 | 11,708 | 3,841
Total | 884,886 | 581 | 70,725 | 1,679 | 11,708 | 3,841 | 967,319 | 6,101

1Compared to the credit risk portfolio, the differences are mainly undrawn committed amounts (€150.1 billion) and other positions (€4.4 billion) not included in credit outstandings and non-IFRS 9 eligible assets (€116.1 billion, mainly guarantees, letters of credit and pre-settlement
exposures) included in credit outstandings but not in the gross carrying amounts.
2 IAS 37 provisions are established for non-credit replacement guarantees not in the scope of IFRS 9. Total IAS 37 provisions (€109 million) are excluded.

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> Credit risk
ING Bank Annual Report 2023 71
Changes in gross carrying amounts and loan loss provisions (*)
The table below provides a reconciliation by stage of the gross carrying amount and allowances for loans
and advances to banks and customers, including loan commitments and financial guarantees. The transfers
of financial instruments represent the impact of stage transfers upon the gross carrying/nominal amount
and associated allowance for ECL. This includes the net-remeasurement of ECL arising from stage transfers,
for example, moving from a 12-month (Stage 1) to a lifetime (Stage 2) ECL measurement basis.
The net-remeasurement line represents the changes in provisions for facilities that remain in the same
stage.
Please note the following comments with respect to the movements observed in the table below:
• The opening balance is impacted by a change in accounting policy following the adoption of IFRS 17,
more specifically for loans with death waivers that no longer meet the ‘solely payments of principal and
interest’ (SPPI) criterion (€-55 million loan loss provisions impact) which are no longer recorded at
amortised cost, and a change in policy for non-financial guarantees that are subject to contractual
indemnification rights which led to a reclassification of the existing IAS 37 provision (€109 million loan
loss provisions impact) and a remeasurement of these non-financial guarantees (€42 million loan loss
provisions impact). Reference is made to Note 1 'Basis of preparation and significant changes in the
current reporting period'.
• Stage 3 gross carrying amount increased slightly to €12.0 billion as at 31 December 2023 as new inflow
into NPL (credit impaired) in 2023 was only partly offset by repayments, derecognitions and write-offs.
Stage 3 provisions remained more or less flat at €3.9 billion.
• Stage 2 gross carrying amount increased by €0.1 billion from €75.4 billion (after changes in accounting
policies) as of 31 December 2022 to €75.5 billion as at 31 December 2023. An increase of Stage 2
exposure, driven by the implementation of an updated methodology for interest-only mortgages in the
Netherlands, was offset by outflow due to improved macro economic outlook, decrease of exposure due
to sales and repayments (including Russian exposure), forborne customers returning to Stage 1 after the
probation period has ended and other improved risk drivers. As a result, Stage 2 provisions also
decreased by €0.3 billion to €1.4 billion as of 31 December 2023.

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> Credit risk
ING Bank Annual Report 2023 72

Changes in gross carrying amounts and loan loss provisions (*)1, 2
in € million | 12-month ECL (Stage 1) | Lifetime ECL not credit impaired (Stage 2) | Lifetime ECL credit impaired (Stage 3) | Total
2023 | Gross carrying amount | Provisions | Gross carrying amount | Provisions | Gross carrying amount | Provisions | Gross carrying amount | Provisions
Opening balance | 884,886 | 581 | 70,725 | 1,679 | 11,708 | 3,841 | 967,319 | 6,101
Impact of changes in accounting policies | 37,079 | 9 | 4,704 | 13 | 158 | 73 | 41,941 | 95
Adjusted Opening balance | 921,965 | 590 | 75,429 | 1,692 | 11,866 | 3,914 | 1,009,260 | 6,196
Transfer into 12-month ECL (Stage 1) | 11,832 | 28 | -11,583 | -239 | -249 | -36 |  | -247
Transfer into lifetime ECL not credit impaired (Stage 2) | -29,134 | -67 | 29,849 | 449 | -716 | -105 |  | 277
Transfer into lifetime ECL credit impaired (Stage 3) | -2,053 | -10 | -1,775 | -115 | 3,828 | 978 |  | 853
Net remeasurement of loan loss provisions |  | -149 |  | -94 |  | 59 |  | -184
New financial assets originated or purchased | 195,826 | 204 |  |  |  |  | 195,826 | 204
Financial assets that have been derecognised | -121,991 | -72 | -14,239 | -215 | -1,475 | -266 | -137,705 | -553
Net drawdowns and repayments | -38,758 |  | -2,386 |  | -229 |  | -41,372 |
Changes in models/risk parameters |  | 8 |  | 10 |  | 84 |  | 102
Increase in loan loss provisions |  | -58 |  | -204 |  | 714 |  | 452
Write-offs | -3 | -3 | -38 | -38 | -1,070 | -1,070 | -1,111 | -1,111
Recoveries of amounts previously written off |  |  |  |  |  | 71 |  | 71
Foreign exchange and other movements |  | -12 |  | -15 |  | 258 |  | 231
Closing balance | 937,684 | 517 | 75,258 | 1,435 | 11,956 | 3,887 | 1,024,897 | 5,839

1 Stage 3 lifetime credit impaired provision includes €11 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to €520 million of which €483 million related to IFRS 9 eligible financial assets, -€31 million related to non-credit replacement guarantees and €68 million to modification gains and losses
on restructured financial assets.

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> Credit risk
ING Bank Annual Report 2023 73

Changes in gross carrying amounts and loan loss provisions (*)1,2
in € million | 12-month ECL (Stage 1) | Lifetime ECL not credit impaired (Stage 2) | Lifetime ECL credit impaired (Stage 3) | Total
2022 | Gross carrying amount | Provisions | Gross carrying amount | Provisions | Gross carrying amount | Provisions | Gross carrying amount | Provisions
Opening balance | 890,158 | 501 | 49,476 | 1,016 | 12,072 | 3,851 | 951,707 | 5,368
Transfer into 12-month ECL (Stage 1) | 8,513 | 21 | -8,105 | -142 | -408 | -47 |  | -168
Transfer into lifetime ECL not credit impaired (Stage 2) | -42,439 | -76 | 43,222 | 730 | -784 | -90 |  | 564
Transfer into lifetime ECL credit impaired (Stage 3) | -3,524 | -8 | -1,216 | -82 | 4,740 | 1,234 |  | 1,144
Net remeasurement of loan loss provisions |  | 8 |  | 223 |  | 199 |  | 430
New financial assets originated or purchased | 248,443 | 228 |  |  |  |  | 248,443 | 228
Financial assets that have been derecognised | -138,250 | -70 | -11,312 | -94 | -2,805 | -215 | -152,366 | -379
Net drawdowns and repayments | -78,015 |  | -1,340 |  | 21 |  | -79,334 |
Changes in models/risk parameters |  | -8 |  | 13 |  | 25 |  | 30
Increase in loan loss provisions |  | 95 |  | 648 |  | 1,106 |  | 1,849
Write-offs |  |  |  | -1 | -1,129 | -1,129 | -1,130 | -1,130
Recoveries of amounts previously written off |  |  |  |  |  | 71 |  | 71
Foreign exchange and other movements |  | -15 |  | 16 |  | -58 |  | -57
Closing balance | 884,886 | 581 | 70,725 | 1,679 | 11,708 | 3,841 | 967,319 | 6,101

1 Stage 3 Lifetime credit impaired provision includes €7 million on purchased or originated credit impaired.
2 The addition to the loan provision (in the consolidated statement of profit or loss) amounts to €1.861 million of which €1.850 million related to IFRS 9 eligible financial assets, -€3 million related to non-credit replacement guarantees and €14 million to modification gains and
losses on restructured financial assets.

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> Credit risk
ING Bank Annual Report 2023 74

Exposure per stage, coverage ratio and stage ratio’s 2
in € million | 2023 | 2022
Balance sheet | Gross Carrying Amount | Loan loss provisions | Stage Ratio | Gross Carrying Amount | Loan loss provisions | Stage Ratio
Loans and advances to Banks (including Central Banks) | 96,436 | 34 |  | 97,146 | 49 |
Stage 1 | 95,935 | 4 | 99% | 95,788 | 9 | 99%
Stage 2 | 494 | 17 | 1% | 1,339 | 20 | 1%
Stage 3 | 6 | 13 | % | 20 | 20 | %
Loans and advances to Customers | 647,927 | 5,621 |  | 643,317 | 5,984 |
of which: Residential mortgages | 331,467 | 821 |  | 326,928 | 677 |
Stage 1 | 306,192 | 97 | 92% | 312,165 | 75 | 96%
Stage 2 | 22,167 | 252 | 7% | 11,877 | 176 | 4%
Stage 3 | 3,108 | 472 | 1% | 2,886 | 426 | 1%
Of which: Consumer Lending (excl. Residential mortgages) | 25,954 | 1,004 |  | 26,348 | 990 |
Stage 1 | 22,081 | 177 | 85% | 23,101 | 184 | 88%
Stage 2 | 2,743 | 198 | 11% | 2,145 | 223 | 8%
Stage 3 | 1,131 | 629 | 4% | 1,102 | 583 | 4%
Of which: Loans to public authorities | 19,068 | 11 |  | 17,272 | 17 |
Stage 1 | 18,083 | 4 | 95% | 15,977 | 4 | 93%
Stage 2 | 691 | 2 | 4% | 1,120 | 7 | 7%
Stage 3 | 294 | 5 | 2% | 175 | 6 | 1%
Of which: Corporate Lending | 271,438 | 3,785 |  | 272,769 | 4,300 |
Stage 1 | 232,452 | 185 | 86% | 227,167 | 279 | 83%
Stage 2 | 32,178 | 921 | 12% | 38,497 | 1,225 | 14%
Stage 3 | 6,808 | 2,679 | 3% | 7,105 | 2,795 | 3%
Other IFRS 9 Eligible Financial Instruments 1 | 280,534 | 184 |  | 226,856 | 67 |
Stage 1 | 262,941 | 50 | 94% | 210,689 | 29 | 93%
Stage 2 | 16,984 | 46 | 6% | 15,746 | 27 | 7%
Stage 3 | 609 | 88 | % | 421 | 11 | 0.2%
Total Gross Carrying Amount (IFRS 9 eligible) | 1,024,897 | 5,839 |  | 967,319 | 6,101 |

1 Includes Off balance sheet IFRS 9 eligible guarantees and irrevocable facilities. The comparatives (2022) were not adjusted for changes in accounting policies. Reference is made to Note 1 'Basis of preparation and significant changes in the current reporting period'.
2 The exposure classification to residential mortgages, consumer lending and corporate lending is aligned to the regulatory definition

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ING Bank Annual Report 2023 75
Modification of financial assets (*)
The table below provides the following information:
• Financial assets that were modified during the year (i.e. qualified as forborne) while they had a loss
allowance measured at an amount equal to lifetime ECL.
• Financial assets that were reclassified to stage 1 during the period.

Financial assets modified (*)
in € million | 2023 | 2022
Financial assets modified during the period |  |
Amortised cost before modification | 1,565 | 1,304
Net modification results | -75 | -124
Financial assets modified since initial recognition |  |
Gross carrying amount at 31 December of financial assets for which loss allowance has changed to 12-month measurement during the period | 2,599 | 2,382

Macroeconomic scenarios and sensitivity analysis of key sources of estimation
uncertainty (*)
Methodology (*)
Our methodology in relation to the adoption and generation of macroeconomic scenarios is described in
this section. We continue to follow this methodology in generating our probability-weighted ECL, with
consideration of alternative scenarios and management adjustments supplementing this ECL where, in
management's opinion, the consensus forecast does not fully capture the extent of recent credit or
economic events. The macroeconomic scenarios are applicable to the whole ING portfolio in the scope of
IFRS 9 ECLs.
The IFRS 9 standard, with its inherent complexities and potential impact on the carrying amounts of our
assets and liabilities, represents a key source of estimation uncertainty. In particular, ING’s reportable ECL
numbers are sensitive to the forward-looking macroeconomic forecasts used as model inputs, the
probability-weights applied to each of the three scenarios, and the criteria for identifying a significant
increase in credit risk. As such, these crucial components require consultation and management judgement,
and are subject to extensive governance.
Baseline scenario (*)
As a baseline for IFRS 9, ING has adopted a market-neutral view combining consensus forecasts for
economic variables (GDP, unemployment) with market forwards (for interest rates, exchange rates and oil
prices). Input from a leading third-party service provider is used to complement the consensus with
consistent projections for variables for which there are no consensus estimates available (most notably
house prices and – for some countries - unemployment), to generate alternative scenarios, to convert
annual consensus information to a quarterly frequency and to ensure general consistency of the scenarios.
As the baseline scenario is consistent with the consensus view it can be considered as free from any bias.
The relevance and selection of macroeconomic variables is defined by the ECL models under credit risk
model governance. The scenarios are reviewed and challenged by two panels of ING experts. The first panel
consists of (economic) experts from Global Markets Research, risk and modelling, while the second panel
consists of relevant senior managers in ING.
Alternative scenarios and probability weights (*)
Two alternative scenarios are taken into account: an upside and a downside scenario. The alternative
scenarios have statistical characteristics as they are based on the forecast deviations of the leading third-
party service provider.
To understand the baseline level of uncertainty around any forecast, the leading third-party service provider
keeps track of all its deviations (so called forecast errors) of the past 20 years. The distribution of forecast
errors for GDP, unemployment, house prices and share prices is applied to the baseline forecast creating a
broad range of alternative outcomes. In addition, to understand the balance of risks facing the economy in
an unbiased way, the leading third-party service provider runs a survey with respondents from around the
world and across a broad range of industries. In this survey respondents put forward their views of key risks.
Following the survey results, the distribution of forecast errors (that is being used for determining the
scenarios) may be skewed.
For the downside scenario, ING has chosen for the 90th percentile of that distribution because this
corresponds with the way risk management earnings-at-risk is defined within the Group. The upside
scenario is represented by the 10th percentile of the distribution. The applicable percentiles of the
distribution imply a 20 percent probability for each alternative scenario. Consequently, the baseline scenario
has a 60 percent probability weighting. Please note that, given their technical nature, the downside and
upside scenarios are not based on an explicit specific narrative.

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ING Bank Annual Report 2023 76
Macroeconomic scenarios applied (*)
The macroeconomic scenarios applied in the calculation of loan loss provisions are based on the consensus
forecasts.
Baseline assumptions (*)
The general picture that the consensus conveys is that global economic growth is going through a weak
spell. Inflation has been coming down as energy prices have moderated, demand has weakened and
pandemic-related supply problems have eased. Higher interest rates play their part in slowing demand.
Although central banks could well be done with hiking interest rates – as inflation continues to fall – the
lagged impact of past monetary tightening is still feeding through to the real economy. This is expected to
cause GDP growth to come in even weaker in 2024, but pickup thereafter as the negative effects from tight
monetary policy and high inflation fade. The high-interest rate environment is currently causing corrections
in house prices, especially in markets where prices surged during the pandemic. Housing market corrections
are assumed to gradually decrease in strength.
The December 2023 consensus expects global output (as measured by the weighted average GDP growth
rate of ING's 25 main markets) to slow from 2.6 percent in 2022, to 2.4 percent in 2023 and 1.8 percent in
2024. For 2025-2026, economic growth is expected to pick up again to 2.3 percent and 2.4 percent.
The US economy outperformed expectations in 2023, driven by strong consumer spending and fiscal
support. Still, headwinds have been building up, in part driven by the much higher interest rates currently
experienced. While an outright recession is not expected, the consensus does foresee a marked slowdown in
economic activity in the US in 2024. After this, the US economy is expected to gather strength again in
2025. The consensus expects the growth rate of the US economy to fall from 2.2 percent in 2023 to 0.9
percent in 2024 and to recover to 2 percent on average in 2025-2026.
The eurozone economy is facing broad stagnation as it deals with the impact of the war in Ukraine, energy
crisis, and higher interest rates. While inflation is coming down, the impact of last year’s purchasing power
shock is still being felt. Monetary tightening works with a lag, which will still affect economic activity next
year. Overall, the eurozone economy is forecasted to have grown by just 0.5 percent in 2023, but Germany
has gone through recession reflecting its large (energy-intensive) manufacturing sector, and exposure to a
disappointing Chinese economy. For next year, the recovery is expected to be very modest as consensus
expects the eurozone to grow by only 0.8 percent in 2024, before recovering to 1.4 percent on average in
2025-2026.
Elsewhere in Europe, the outlook is mixed. In Poland, after an expected 0.4 percent growth in 2023, the
economy is expected to recover by 2.5 percent in 2024 led by household consumption growth. Wage
growth is set to remain strong while inflation has subsided substantially. The consensus expectation for
Türkiye is to see growth slow substantially in 2024 with unemployment remaining around 10 percent for the
foreseeable future. The consensus sees economic growth in Türkiye slowing from 3.5 percent in 2023, to 2.1
percent in 2024 and increasing again to 3.3 percent on average in 2025-2026. The Russian economy has
started to recover from the 2022 recession, but growth is set to moderate after 1.7 percent in 2023 to 1.2
percent on average in 2024-2026.
2023 was supposed to be the year of a strong reopening for China, but growth did not meet expectations.
Weak global demand for goods has resulted in a weaker than expected industrial performance and the real
estate sector continues to be a source of concern. For the 2024-2026 period, economic growth is expected
to come in at only 4.2 percent despite increased stimulus.
The global economic slowdown and tighter monetary policy continue to weigh on economic growth in
Australia. After growing by 1.7 percent in 2023, the outlook sees a growth rate of 1.3 percent for 2024 and
some pick-up to 2.4 percent and 2.5 percent for 2025-2026. Unemployment is expected to run up a little
more, from 4.1 percent in 2023 to 4.4 percent, but decrease again thereafter.
When compared to the December 2022 consensus forecast, used for the 2022 Annual Report, the December
2023 forecast assumes somewhat better economic circumstances in 2023 but weaker for 2024. The
forecast assumes to have Global GDP increased by 2.4 percent in 2023 (compared to 1.3 percent assumed
before) and is expected to grow by 1.8 percent in 2024 (2.4 percent assumed before). The upgrade for 2023
reflects the better than expected economic performance of the US and eurozone as a recession on the back
of the energy crisis was avoided, while the downgrade for 2024 reflects the impact of substantial monetary
tightening.
Alternative scenarios and risks (*)
Because of the possible consequences of geopolitical risks, uncertainty surrounding the forecasts was higher
in 2022. During 2023, the uncertainty level around the forecasts gradually decreased. To take this into
account, ING applies normal levels of dispersion in the alternative scenarios used for year-end 2023
provisioning. For year-end 2022 half-widened dispersion levels were used, by which the near-term
dispersion of the forward-looking distributions (from which the alternative scenarios are derived) was larger
than in normal times.
The baseline scenario assumes a further easing of inflation in 2024 and relatively resilient labour markets.
However, a longer period of weakness, due to even more concerning geopolitical tensions, persistent
elevated inflation and a slowdown in China could lead to a more protracted and deeper economic
slowdown. As such, the balance of risks to the baseline outlook is negative and the alternative scenarios
have a downward skew in line with the outcomes of the Global Risk Survey from a leading third-party
service provider. The downward skew remained stable compared to what has been applied for year-end
2022, continuing to reflect risks related to possible escalation of geopolitical tensions, a prolonged surge in
inflation and tightening monetary policy.

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> Credit risk
ING Bank Annual Report 2023 77
The downside scenario, though technical in nature, sees for most countries a recession in 2024.
Unemployment increases strongly in this scenario and house prices in most countries show outright falls.
The downside scenario captures a possible escalation of geopolitical tensions, a prolonged surge in inflation
and further slowing in China.
The upside scenario – while equally technical in nature – reflects the possibility of a better economic outturn
if consumers spend more of their excess savings, geopolitical risks subside and China stimulus works out
more strongly than expected.
Management adjustments applied this year (*)
In times of volatility and uncertainty where portfolio quality and the economic environment are changing
rapidly, models alone may not be able to accurately predict losses. In these cases, management
adjustments can be applied to appropriately reflect ECL. Management adjustments can also be applied
where the impact of the updated macroeconomic scenarios is over- or under-estimated by the IFRS 9
models.
ING has internal governance frameworks and controls in place to assess the appropriateness of all
management adjustments, involving first- and second lines of defence.

Management adjustments to ECL models (*)
in € million | 2023 | 2022
Economic sector based adjustments | 36 | 71
Inflation and interest rate increases / second-order impact adjustments | 351 | 334
Mortgage portfolio adjustments | 126 | 105
Other post model adjustments | 64 | -57
Total management adjustments | 577 | 453

The economic sector-based adjustments of €36 million as of 31 December 2023 (€71 million as at 31
December 2022) fully relates to Business Banking clients that have benefited from Covid-19-related
government support programmes in the Netherlands. In line with 2022, it became clearer during 2023 that
the Covid-19 pandemic had less impact than expected on the number of defaults in related sectors with
relatively high tax debt to be repaid; the economic sector-based management adjustment has therefore
been partially released. The remaining management adjustment is related to sectors with relatively high tax
debt to be repaid and is expected to materialise with delayed effect. The €10 million adjustment on the
livestock farming sector in the Netherlands that was also included in December 2022, related to nitrogen
reduction targets has been fully released following improved risk metrics.
ING has performed further assessment for both WB and Retail Banking on the impact of second-order
effects. The second-order adjustments as at December 2022 captured a wider range of indirect effects such
as supply chain issues, staffing shortages and high energy prices. In 2023, the risks from high inflation and
rapidly increasing interest rates became more apparent compared to other indirect effects, causing a shift
in focus of this adjustment. This resulted in an overall adjustment for inflation and interest rate increases of
€351 million in total as at 31 December 2023, of which €138 million (31 December 2022: €164 million)
relates to Retail Banking segments and €213 million (31 December 2022: €170 million) to the Wholesale
Banking segment.
As the credit risk models in Retail Banking generally assume that inflation and interest rate increases risks
materialise via other risk drivers such as GDP and unemployment rates with a delay, an overlay approach
was determined. The methodology considers debt-to-income ratios and the percentage of loans that are
expected to reprice within one year to timely estimate the expected credit losses related to reduced
repayment capacity and affordability for private individuals and business clients in the Retail Banking
segment.
In Wholesale Banking, the IFRS 9 credit risk models mostly leverage on GDP growth as a generic
macroeconomic variable. High inflation and rapidly increasing interest rates however trigger economic
heterogeneity (i.e. some businesses benefit, while others suffer), as such the current circumstances are
expected to cause more defaults than normally predicted using GDP growth. A sector-based heatmap
approach was used to adjust the probability of default for clients in sectors that are expected to be
significantly impacted by high inflation and increased interest rates, including refinancing risk. The
adjustment is predominantly visible in the commercial real estate sector and reflected in Stage 1 and Stage
2.
The overall mortgage portfolio adjustment as at 31 December 2023 increased to €126 million (31 December
2022: €105 million), as an adjustment of €115 million has been recognised in 2023 following new insights
from a risk segmentation model that captures affordability, repayment and refinancing risk on performing
mortgage customers with a bullet loan in the Netherlands.
The mortgage portfolio adjustment that relates to significant increase of house prices was reduced to €11
million as at 31 December 2023, coming from €105 million as at December 2022. This decrease is reflecting
the decline in house prices in various countries, subsequent materialisation into increased model-based ECL
as well as an improved market outlook on the recovery value of residential real estate. ING still recognises a
management adjustment related to house prices in Stage 2 and Stage 3 on the mortgage portfolios in
Germany to maintain an appropriate level of ECL. The management adjustments are determined by
calculating the impact of lower house prices on loan-to-value (LTV) and loss given default (LGD).
Other post-model adjustments (PMAs) mainly relate to the impact of model redevelopment or recalibration
and periodic model assessment procedures that have not been incorporated in the ECL models yet; the
impact on total ECL can be positive or negative. These can result from both regular model maintenance and

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> Credit risk
ING Bank Annual Report 2023 78
ING’s multi-year programme to update ECL models for the definition of default. These adjustments will be
removed once updates to the specific models have been implemented. The change in balance compared to
the previous reporting date is due to i) released PMAs because of model updates that have been
implemented, and ii) new PMAs recognised for new redevelopments and recalibrations.
Analysis on sensitivity (*)
The table below presents the analysis on the sensitivity of key forward-looking macroeconomic inputs used
in the ECL collective-assessment modelling process and the probability weights applied to each of the three
scenarios. The countries included in the analysis are the most significant geographic regions in ING and for
Wholesale Banking the US is the most significant in terms of both gross contribution to reportable ECL, and
sensitivity of ECL to forward-looking macroeconomics. Accordingly, ING considers these portfolios to present
the most significant risk of resulting in a material adjustment to the carrying amount of financial assets
within the next financial year. ING also observes that, in general, the WB business is more sensitive to the
impact of forward-looking macroeconomic scenarios.
The purpose of the sensitivity analysis is to enable the reader to understand the extent of the impact from
the upside and downside scenario on model-based reportable ECL.
In the table below, the real GDP is presented in percentage year-on-year change, the unemployment in
percentage of total labour force and the house price index (HPI) in percentage year-on-year change.

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ING Bank Annual Report 2023 79

Sensitivity analysis as at December 2023 (*)
|  | 2024 | 2025 | 2026 | Un-weighted ECL (€ mln) | Probability- weighting | Reportable ECL (€ mln)1
Netherlands Upside scenario | Real GDP | 1.3 | 3.3 | 2.8 | 214 | 20% | 310
Unemployment | 3.7 | 3.3 | 3.3
HPI | 10.4 | 11.2 | 4.0
Baseline Scenario | Real GDP | 0.8 | 1.6 | 1.5 | 282 | 60%
Unemployment | 4.1 | 4.3 | 4.5
HPI | 0.9 | 3.0 | 3.9
Downside scenario | Real GDP | -1.7 | -1.2 | 0.1 | 487 | 20%
Unemployment | 5.9 | 7.2 | 8.1
HPI | -10.9 | -7.4 | 3.7
Germany Upside scenario | Real GDP | 1.4 | 3.1 | 1.6 | 472 | 20% | 525
Unemployment | 2.6 | 2.0 | 1.7
HPI | 0.9 | 6.6 | 8.0
Baseline Scenario | Real GDP | 0.5 | 1.3 | 1.2 | 513 | 60%
Unemployment | 3.0 | 3.0 | 3.0
HPI | -1.4 | 3.4 | 4.5
Downside scenario | Real GDP | -2.4 | -1.4 | 0.3 | 615 | 20%
Unemployment | 4.5 | 5.2 | 5.5
HPI | -6.0 | -0.8 | 0.4
Belgium Upside scenario | Real GDP | 1.5 | 2.7 | 2.3 | 568 | 20% | 619
Unemployment | 5.3 | 5.0 | 4.9
HPI | 1.3 | 5.6 | 4.5
Baseline Scenario | Real GDP | 0.9 | 1.5 | 1.8 | 604 | 60%
Unemployment | 5.6 | 5.5 | 5.4
HPI | 0.4 | 5.2 | 3.9
Downside scenario | Real GDP | -1.3 | -0.2 | 1.2 | 713 | 20%
Unemployment | 7.3 | 8.0 | 7.9
HPI | -2.2 | 3.9 | 2.6
United States Upside scenario | Real GDP | 1.8 | 3.2 | 3.4 | 102 | 20% | 165
Unemployment | 4.1 | 3.3 | 3.1
HPI | 0.6 | 8.7 | 8.7
Baseline Scenario | Real GDP | 0.9 | 1.9 | 2.1 | 144 | 60%
Unemployment | 4.5 | 4.5 | 4.4
HPI | -0.7 | 3.5 | 3.3
Downside scenario | Real GDP | -1.3 | -1.4 | -0.1 | 292 | 20%
Unemployment | 6.6 | 8.2 | 8.8
HPI | -4.2 | -2.7 | -3.0

1 Excluding management adjustments.

Sensitivity analysis as at December 2022 (*)
|  | 2023 | 2024 | 2025 | Un-weighted ECL (€ mln) | Probability- weighting | Reportable ECL (€ mln)1
Netherlands Upside scenario | Real GDP | 2.2 | 2.3 | 2.9 | 274 | 20% | 381
Unemployment | 4.0 | 3.9 | 3.8
HPI | 13.0 | 11.8 | 2.5
Baseline Scenario | Real GDP | 0.2 | 1.4 | 1.8 | 349 | 60%
Unemployment | 4.5 | 4.8 | 4.9
HPI | 3.7 | 3.7 | 2.4
Downside scenario | Real GDP | -4.2 | 0.7 | 0.9 | 583 | 20%
Unemployment | 6.4 | 7.8 | 8.7
HPI | -8.0 | -6.5 | 2.2
Germany Upside scenario | Real GDP | 1.7 | 2.3 | 1.8 | 606 | 20% | 745
Unemployment | 2.6 | 2.2 | 1.8
HPI | 0.6 | 3.9 | 6.2
Baseline Scenario | Real GDP | -0.7 | 1.4 | 1.5 | 726 | 60%
Unemployment | 3.2 | 3.1 | 3.1
HPI | -1.8 | 0.9 | 2.7
Downside scenario | Real GDP | -4.8 | 0.1 | 1.0 | 942 | 20%
Unemployment | 4.8 | 5.3 | 5.6
HPI | -6.2 | -3.3 | -1.4
Belgium Upside scenario | Real GDP | 1.7 | 2.1 | 2.1 | 535 | 20% | 596
Unemployment | 5.5 | 5.5 | 5.3
HPI | 2.3 | 2.6 | 3.1
Baseline Scenario | Real GDP | 0.0 | 1.6 | 1.8 | 584 | 60%
Unemployment | 6.1 | 6.3 | 6.1
HPI | 1.4 | 2.2 | 2.5
Downside scenario | Real GDP | -3.2 | 1.0 | 1.5 | 692 | 20%
Unemployment | 7.5 | 8.5 | 8.4
HPI | -1.2 | 0.9 | 1.2
United States Upside scenario | Real GDP | 3.0 | 1.5 | 3.4 | 100 | 20% | 221
Unemployment | 3.4 | 2.8 | 2.5
HPI | 3.7 | 7.4 | 8.1
Baseline Scenario | Real GDP | 0.2 | 1.1 | 2.3 | 188 | 60%
Unemployment | 4.3 | 4.4 | 3.9
HPI | 2.5 | 2.2 | 2.8
Downside scenario | Real GDP | -4.1 | 0.2 | 0.6 | 442 | 20%
Unemployment | 6.4 | 7.7 | 8.2
HPI | -1.2 | -3.8 | -3.5

1 Excluding management adjustments.

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> Credit risk
ING Bank Annual Report 2023 80
When compared to the sensitivity analysis of 2022, the macroeconomic inputs for 2023 are somewhat
more favourable and for 2024 less favourable as the lagged impact of monetary tightening is still feeding
through to the real economy. The sensitivities for 2022 contain half-widened dispersion around the upside
and downside scenarios, whereas half-widened dispersion was removed for these scenarios for the 2023
sensitivity analysis following a continued decrease in forecast uncertainty.
On a total ING level, the unweighted model ECL for all collective provisioned clients in the upside scenario
was €2,510 million, in the baseline scenario €2,802 million and in the downside scenario €3,668 million . This
reconciles as follows to the reported ECLs:

Reconciliation of model (reportable) ECL to total ECL (*)
in € million | 2023 | 2022
Total reportable collective provisions | 2,856 | 3,209
ECL from individually assessed impairments | 2,406 | 2,439
ECL from management adjustments | 577 | 453
Total ECL | 5,839 | 6,101

Criteria for identifying a significant increase in credit risk (SICR) (*)
All assets and off-balance-sheet items that are in scope of IFRS 9 impairment and which are subject to
collective ECL assessment are allocated a 12-month ECL if deemed to belong in Stage 1, or a lifetime ECL if
deemed to belong in Stages 2 or 3. An asset belongs in Stage 2 if it is considered to have experienced a
significant increase in credit risk since initial origination or purchase. ING considers the credit risk of an asset
to have significantly increased when either a threshold for absolute change in lifetime probability of default
(PD) or a relative change in lifetime PD is reached.
It should be noted that the lifetime PD thresholds are not the only drivers of stage allocation. An asset can
also change stages as a result of other triggers, such as having over 30 days arrears, being on a watch list or
being forborne. Refer to section 1.5.6 of Note 1 ‘Basis of preparation and significant accounting policies’ for
an exhaustive list. Furthermore, this analysis is rudimentary in the sense that other parameters would
change when an asset changes stages.
Absolute lifetime PD threshold
The absolute threshold is a fixed value calibrated per portfolio/segment and provides a fixed threshold that,
if exceeded by the difference between lifetime PD at reporting date and lifetime PD at origination, triggers
Stage 2 classification. The expert-based thresholds for the absolute change in lifetime PD vary between
75bps for Retail portfolios, 100bps for WB and 250bps for SMEs, based on the characteristics of the specific
portfolio. ING is in the process of refining the thresholds on a portfolio level. These have already been
implemented for part of the portfolio, resulting in calibrated instead of expert-based absolute lifetime PD
thresholds.
Relative lifetime PD threshold
The relative threshold defines a relative increase of the lifetime PD beyond which a given facility is classified
in Stage 2 because of significant increase in credit risk. The relative threshold is dependent on the individual
PD assigned to each facility at the moment of origination and a scaling factor calibrated in the model
development phase that is optimised depending on the observed default rates and overall average riskiness
of the portfolio. While the scaling factor is associated with a whole portfolio/segment, the PD at origination
is facility-specific and, in this sense, the relative threshold may differ facility by facility.
Ultimately the relative threshold provides a criterion to assess whether the ratio (i.e. increase) between
lifetime PD at reporting date and lifetime PD at origination date is deemed a significant increase in credit
risk. If the threshold is breached, SICR is identified and Stage 2 is assigned to the given facility.
The threshold for the relative change in lifetime PD is inversely correlated with the PD at origination; the
higher the PD at origination, the lower the threshold. The logic behind this is to allow facilities originated in
very favourable ratings to downgrade for longer without the need of a Stage 2 classification. In fact, it is
likely that such facilities will still be in favourable ratings even after a downgrade of a few notches. On the
contrary, facilities originated in already unfavourable ratings grades are riskier and even a single-notch
downgrade might represent a significant increase in credit risk and thus a tighter threshold will be in place.
Still, the relative threshold is relatively sensitive for investment grade assets while the absolute threshold
primarily affects non-investment grade assets.
Average threshold ratio
In the table below the average increase in PD at origination needed to be classified in Stage 2 is reported,
taking into account the PD at origination of the facilities included in each combination of asset class and
rating quality. In terms of rating quality, assets are divided into 'investment grade' and 'non-investment
grade' facilities. Rating 18 and 19 are not included in the table since facilities are not originated in these
ratings and they constitute a staging trigger of their own (i.e. if a facility is ever to reach rating 18 or 19 at
reporting date, it is classified in Stage 2). In the table, values are weighted by IFRS 9 exposure and shown for
both year-end 2022 and year-end 2023.
To represent the thresholds as a ratio (i.e. how much should the PD at origination increase in relative terms
to trigger Stage 2 classification) the absolute threshold is recalculated as a relative threshold for disclosure
purposes. Since breaching only relative or absolute threshold triggers Stage 2 classification, the minimum
between the relative and recalculated absolute threshold is taken as value of reference for each facility.

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> Credit risk
ING Bank Annual Report 2023 81

Quantitative SICR thresholds (*)
| 2023 | 2022
Average threshold ratio | Investment grade (rating grade 1-10) | Non-investment grade (rating grade 11-17) | Investment grade (rating grade 1-10) | Non-investment grade (rating grade 11-17)
Asset class category |  |  |  |
Mortgages | 2.5 | 2.3 | 2.7 | 2.3
Consumer Lending | 2.9 | 2.1 | 2.8 | 1.8
Business Lending | 2.7 | 2.1 | 2.8 | 2.1
Governments and Financial Institutions | 3.0 | 1.9 | 3.0 | 1.9
Other Wholesale Banking | 2.8 | 1.8 | 2.8 | 1.9

As it is apparent from the disclosures above, as per ING’s methodology, the threshold is tighter the higher
the riskiness at origination of the assets, illustrated by the difference between the average threshold applied
to investment grade facilities and non-investment grade facilities.
Sensitivity of ECL to PD lifetime PD thresholds
The setting of PD threshold bands requires management judgement and is a key source of estimation
uncertainty. On Group level, the total model ECL on performing assets, which is the ECL collective-
assessment without taking management adjustments into account, is €1,412 million. To demonstrate the
sensitivity of the ECL to these PD thresholds bands, hypothetically solely applying the upside scenario would
result in total model ECL on performing assets of €1,054 million and a decrease in the Stage 2 ratio by -0.5
percentage point, while solely applying the downside scenario in our models would result in total model ECL
on performing assets of €2,290 million and an increase in the Stage 2 ratio by 3.8 percentage-point.

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> Credit risk
ING Bank Annual Report 2023 82
Market risk
Introduction (*)
Market risk is the risk that movements in market variables, such as interest rates, equity prices, foreign
exchange rates, credit spreads and real estate prices negatively impact the bank’s earnings, capital, market
value or liquidity position. Market risk either arises through positions in banking books or trading books. The
banking book positions are intended to be held for the long term (or until maturity) or for the purpose of
hedging other banking book positions. The trading book positions are typically held with the intention of
short-term trading or to hedge other positions in the trading book. This means that financial instruments in
the trading books should be free of trade restrictions. Policies and processes are in place to monitor the
inclusion of positions in either the trading or banking book as well as to monitor the transfer of risk between
the trading and banking books.
ING recognises the importance of sound market risk management and bases its market risk management
framework on the need to identify, assess, control and manage market risks. The approach consists of five
recurring activities: risk identification, risk assessment, risk control, risk monitoring and risk reporting.
Governance (*)
A governance framework has been established defining specific roles and responsibilities of business
management units, market risk management units, and internal approval bodies per activity.
Supervision of market risk falls under the responsibility of the EB/MBB and is delegated to the ALCO function,
where ALCO Bank is the highest approval authority and sets the market risk appetite. ALCO Bank monitors
ING’s adherence to the risk appetite for market risk and sets additional limits where appropriate. These
limits are cascaded through the organisation through lower level ALCOs. This ALCO structure facilitates top-
down risk management, limit setting, limit monitoring and control of market risk.
FR maintains a limit framework in line with ING’s Risk Appetite Framework. The businesses are responsible
for adhering to the limits which are reviewed on an annual basis and are ultimately approved by the ALCO
Bank. Limit excesses are reported to senior management in line with the ALM Risk Appetite Statement
Setting procedure and Market Risk in the Trading Book Framework, upon which the business needs to act
accordingly. To adhere to the established limit framework, ING implements hedging and risk mitigation
strategies that range from the use of traditional market instruments, such as interest rate swaps, to more
sophisticated hedging strategies.
The organisational structure facilitates top-down risk management by recognising that risk taking and risk
management occur to a large extent at the regional/local level. Bottom-up reporting from regional/local
units to head office units allows each management level to assess the market risks relevant at the
respective levels.
Several committees govern communication between the parties involved in market risk management:
• The Market Risk Model Committee (MRMC), is the dedicated authority for the approval of all funding &
liquidity risk, market risk (includes banking and trading risk), counterparty credit risk and business risk
models and parameters for ING Bank within its mandate delegated by ALCO Bank.
• The Valuation Model Committee approves pricing models for trading and banking books.
Financial Risk provides risk reporting to the EB and MBB, the ALCO Bank and the senior executive
management of related business functions.
The following sections elaborate on the various elements of the risk management framework for:
• Market risk economic capital;
• Market risk in banking books;
• Market risk in trading books.
Market risk economic capital
Market Risk Economic Capital (MREC) measures the capital ING must hold to protect itself against losses due
to market risks. MREC covers the entire balance sheet of ING, and includes market risk sub-types such as:
interest rate and basis risk, credit spread risk, customer behaviour risk, FX risk, equity risk and commodity
risk.
MREC is calculated as the 99.9 percent worst value loss that can be incurred from one-year shocks to the
underlying risk drivers. While aggregating the different economic capital market risk figures for the different
portfolios, diversification benefits are taken into account as it is not expected that all extreme market
movements will appear at the same moment.
Market risk in banking books (*)
ING makes a distinction between the trading and banking (non-trading) books. Positions in banking books
originate from the market risks inherent in commercial products that are sold to clients, Group Treasury
exposures, and from the investment of our own funds (core capital). Both the commercial products and the
products used to hedge related market risk exposures are intended to be held until maturity, or at least for
the long term.

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> Market risk
ING Bank Annual Report 2023 83
Risk transfer (*)
Market risks in the banking book are managed via the risk transfer process. In this process the interest rate,
FX, funding and liquidity risks are transferred from the commercial books through matched funding or
replication to Group Treasury, where centrally managed. The scheme below presents the transfer and
management process of market risks in the banking books.

Risk measurement (*)
The main concepts and metrics used for measuring market risk in the banking book are described below per
risk type.
Interest rate risk in banking book (*)
Interest rate risk in the banking book is defined as the exposure of a bank’s earnings, capital, and market
value to adverse movements in interest rates originated from positions in the banking book.
Governance (*)
The management of interest rate risk follows the Interest Rate Risk in the Banking Book (IRRBB) framework
as approved by ALCO Bank. This framework describes roles, responsibilities, risk metrics, and the policies and
procedures related to interest rate risk management. Furthermore, ALCO Bank reviews and sets the risk
appetite for interest rate risk on an annual basis. The risk appetite is translated into limits for the interest
rate risk metrics.
As a result of this framework, ING centralises interest rate risk management from commercial books (that
capture the products sold to clients) to globally managed interest rate risk books. This enables a clear
demarcation between commercial business results and results based on unhedged interest rate positions.
ING distinguishes between three types of activities that generate interest rate risk in the banking book:
• Investment of own funds;
• Commercial business;
• Group Treasury exposures including strategic interest rate positions.
Group Treasury is responsible for managing the investment of own funds (core capital). Capital is invested
for longer periods to contribute to stable earnings within the risk appetite boundaries set by ALCO Bank. The
main objective is to maximise the economic value of the capital investment book while having stable
earnings.
Commercial activities can result in linear interest rate risk, for example, tenors and duration of new
production and re-pricing of assets differ from those of liabilities. Also, interest rate risk can arise from
customer behaviour and/or convexity risk, depending on the nature of the underlying product
characteristics.
Customer behaviour risk is defined as the potential future (value) loss due to deviations in the actual
behaviour of clients versus the modelled behaviour with respect to the embedded options in commercial
products. General sources of customer behaviour risk, among other things, include the state of the

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> Market risk
ING Bank Annual Report 2023 84
economy, competition, changes in regulation, legislation and tax regime, developments in the housing
market and interest rate developments.
From an interest rate risk perspective, commercial activities can typically be divided into the following main
product types: savings and current accounts (funds entrusted), demand deposits, mortgages and loans.
Savings and demand deposits are generally invested in such a way that both the value is hedged and the
sensitivity of the margin to market interest rates is minimised. The contractual nature of investments
(assets) implies that the adjustment to market rates (repricing of assets) is not immediate, therefore the
interest rate risk can arise with either positive or negative impact on the income. Interest rate risk is
modelled based on the stability of deposits and the pass-through rate. This takes account of different
elements, such as pricing strategies, volume developments and the level and shape of the yield curve.
Savings volumes are typically assumed to be relatively stable and less sensitive to rate changes.
Interest rate risk for mortgages arises due to prepayment or other embedded optionalities. In modelling this
risk, both interest-rate-dependent pre-payments and constant prepayments, are considered. Next to a
dependence on interest rates, modelled prepayments may include other effects such as loan-to-value,
seasonality and the reset date of the loan. In addition, the interest sensitivity of embedded offered rate
options may be considered.
Wholesale Banking loans typically do not experience interest-rate-dependent prepayment behaviour. These
portfolios are match-funded taking the constant prepayment model into account and typically do not
contain significant convexity risk. Wholesale Banking loans can have an all-in rate floor or a floor on a
reference rate.
Customer behaviour in relation to mortgages, loans, savings and demand deposits is modelled, based on
extensive research. However, the substantial change in the interest rate environment makes extensive
research more challenging than before and may increase model risk. Models are backtested and updated
when deemed necessary in an annual procedure. Model parameters and the resulting risk measures are
approved by (local) ALCO and are closely monitored on a monthly basis.
Linear risk transfers take place from commercial business books to the treasury book (Group Treasury), if
necessary, by using estimations of customer behaviour. The originating commercial business is ultimately
responsible for estimating customer behaviour, leaving convexity risk and (unexpected) customer behaviour
risk with the commercial business. Risk measurement and the risk transfer process take place at least
monthly. However, if deemed necessary, additional risk transfers can take place.
The commercial business manages the convexity risk that is the result of products that contain embedded
options, like mortgages. Here the convexity risk is defined as the optionality effects in the value due to
interest rate changes, excluding the first-order effects. In some cases, convexity risk is transferred from the
commercial books to treasury books using cap/floor contracts and swaptions.
In the following sections, the interest rate risk exposures in the banking books are presented. ING quantifies
risk measures from both earnings and value perspectives. Net interest income (NII)-at-Risk is used to
provide the earnings perspective and the net present value (NPV)-at-Risk figures provide the value
perspective. Please note that the interest rate risk that stems from the commercial business is assumed to
be linearly hedged but no additional corrective management actions are taken into account in the NPV-at-
Risk measure. In the NII-at-Risk measure, a more dynamic hedging process is taken into account.
During 2023, the following activities related to the risk measurement for IRRBB were performed:
• Annual review of the risk appetite for market risks in the banking book including further enhancements;
• Further assessment and development of sub-risk types, such as tenor basis risk, vega optionality risk and
client behaviour risk;
• Set up of standardised risk measurement related to global crisis risk;
• Annual review of the interest rates scenarios used for calculating NII-at-Risk and NPV-at-Risk;
• Annual savings/current account model updates;
• Annual update of parameters of prepayment models for market developments;
• Further enhancement of the IRRBB framework in relation to upcoming regulatory requirements (e.g.
anticipation on implementation and measurement of the upcoming regulatory metric NII SOT,
development of additional requirements coming forward from latest EBA guidelines);
• Further strengthening of customer behaviour risk and model risk frameworks
Net interest income (NII) at Risk (*)
The NII-at-Risk measures the impact of changing interest rates on the forecasted net interest income
(before tax) of the banking book, excluding the impacts of credit spread sensitivity, fees and fair value
impact. Future projected balance sheet developments are included in this risk metric. NII-at-Risk is a metric
that helps provide insight as to what extent ING's NII under alternative interest rates developments deviates
from what was assumed in our dynamic plan projections.
In its risk management, ING monitors the NII-at-Risk under a three-year timeframe. Interest rates are
stressed during the first year versus the prevailing curve, taking gradual changes over the first year. The
rate changes considered comprise both upward and downward scenarios, as well as parallel (equal
movements across the yield curve) and non-parallel scenarios.
The impact of changing interest rates on ING’s NII is predominantly caused by the following factors:
• Change in returns of (re-)investments of client deposits;
• Change in client deposit rates (mainly savings), (partially) tracking changes in market interest rates;

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> Market risk
ING Bank Annual Report 2023 85
• Change in the amortization profile of mortgages, due to an increase or decrease in expected
prepayments;
• Higher/lower returns of (re-)investments of capital investment;
• Open interest rate positions, leading to changes in return because of different market rates;
• Assumed volume development of the balance sheet in line with ING's dynamic plan.
For projecting the change in client deposit rates, ING uses a client rate model that describes the relation to
market interest rates and client deposit rates. The model is calibrated under a range of interest rate
scenarios. Per scenario the actual change in client deposit rates may deviate from this calibrated model.
The actual NII development of customer deposits may, indeed, differ from the provided scenarios,
depending on, amongst others, actual interest rate and savings client rate evolution, as well as changes to
ING’s balance sheet composition such as net deposit growth and relative share of savings deposits and non-
remunerated current accounts.
The NII-at-Risk figures in the table below reflect a parallel, linear interest rate movement during a year
('ramped') under the assumption of balance sheet developments in line with the ING's dynamic plan with a
time horizon of one year. The majority of the risk comes from fixed-rate positions, most notably non-
remunerated current accounts and variable-rate savings accounts .
The NII-at-Risk is primarily driven by the difference in sensitivity of client liabilities, mainly savings, versus
the sensitivity of client assets and investments to rate changes. The investment of own funds only impacts
the earnings sensitivity marginally, as only a relatively small part has to be (re)invested within the one-year
horizon.

NII-at-Risk banking book per currency - year one (*)
in € million | 2023 | 2022
| Ramped, unfloored | Ramped, unfloored
parallel ▼ | parallel ▲ | parallel ▼ | parallel ▲
By currency |  |  |  |
Euro | -165 | 155 | -119 | 114
US Dollar | -12 | 12 | -1 | 2
Other | -62 | 69 | -23 | 27
Total | -239 | 236 | -142 | 142

EUR ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-100bps)
USD ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-120bps)
The change in NII under a declining and upward interest rate scenarios may not be equal. This is due to
different expected reactions in prepayment behaviour of mortgages and different pricing developments of
commercial loans and deposits products (mainly savings). This is caused by embedded options, explicit or
implicit pricing floors and other (assumed) pricing factors.
Year-on-year variance analysis (*)
In our customer deposit composition current accounts decreased and term deposits increased. Over 2023
the one-year asset repricing versus liability repricing increased, leading to a higher NII-at-Risk.
In 2023 central banks tightened monetary conditions, a continuation of a trend started in 2022 to counter
high inflation. The interest rates, however, stabilised in the second half of the year as inflation started to
ease. ING applied a dynamic hedging process, by which interest rate risk was transferred from the business
to Group Treasury and subsequently hedged in the markets. This process mitigates interest rate risk
resulting in a lower sensitivity for rate changes of ING's NII. However, the main drivers of a potential change
of NII sensitivity are balance sheet developments, specifically relating to mortgages, loans and savings. In
the eurozone, mortgage production was impacted by an increase in interest rates. Next to the impact on
new production, the prepayment incentive generally decreased due to the increase in interest rates. The
funds entrusted volume did not change significantly. The impact of explicit and implicit floors on both rates
of client assets and savings phased out in the course of the year on the back of the interest rate increases.
Pre-existing hedges, as executed by Group Treasury, were also adjusted continuously throughout the year
to hedge any interest rate risk coming from higher interest rates. Furthermore, ING’s investment of own
funds took place against a lower duration reducing sensitivity. Excluding Model Risk, the total NII-at-Risk
remains relatively limited in comparison to ING’s total interest income.
Net Present Value (NPV) at Risk (*)
NPV-at-Risk measures the impact of changing interest rates on the value of the positions in the banking
book. The NPV-at-Risk is defined as the outcome of an instantaneous increase or decrease in interest rates
from applying currency-specific scenarios. The NPV-at-Risk asymmetry between the downward and upward
shock is mainly caused by convexity risk in the mortgage and savings portfolio.
The full value impact cannot be directly linked to the financial position or profit or loss account, as fair value
movements in banking books are not necessarily reported through the profit or loss account or through
other comprehensive income (OCI). The changes in value are expected to materialise over time in the profit
and loss account if interest rates develop according to forward rates throughout the remaining maturity of
the portfolio. The majority of the risk comes from the investments of own funds and from positions
exhibiting negative convexity due to embedded optionality (most notably variable rate savings rate and
fixed rate mortgages).

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> Market risk
ING Bank Annual Report 2023 86

NPV-at-Risk banking books per currency (*)
in € million | 2023 | 2022
| unfloored | unfloored
parallel ▼ | parallel ▲ | parallel ▼ | parallel ▲
By currency |  |  |  |
Euro | -291 | -645 | 392 | -926
US dollar | 186 | -178 | 137 | -147
Other | 131 | -146 | 66 | -79
Total | 27 | -969 | 594 | -1,153

EUR ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-100bps)
USD ramped (unfloored) is at +/- 110bps in 1 year (2022: +/-120bps)
Year-on-year variance analysis (*)
The overall NPV sensitivity remained limited in 2023, reflecting of proper risk transfer and hedging process.
The worst case scenario, parallel up, remained relatively unchanged. Most of the year-to-year move is
coming from mortgages, partly offset by savings and derivatives from hedging activities.
IBOR transition (*)
In line with the recommendations of the Financial Stability Board, a fundamental review of important
interest rates benchmarks has been undertaken. Some interest benchmarks have been reformed, while
others have or will be replaced by risk-free rates (RFR) and discontinued. USD LIBOR in its current form
ceased on 30 June 2023, whereas the cessation of GBP, CHF, JPY, and EUR LIBOR rates occurred on 31
December 2021.
To support these changes, the financial sector has issued several guidance papers and other initiatives to
help phase the transition.
To facilitate the transition away from USD LIBOR, for new USD contracts, ING started using the
recommended alternative rates based on SOFR in 2022. Also, during 2022 and 2023, ING sought to ensure
that existing loan and derivative contracts were either transitioned to alternative rates or transition
arrangements agreed, such as taking steps to ensure a large portion of the derivative portfolio was covered
by ISDA fallbacks. Despite extensive and timely communication on the desirability of fully agreeing
transition arrangements before 30 June 2023, some clients have agreed to complete the required work
before the first interest reset date after cessation. A limited number of clients in restructuring or those
subject to sanctions need to rely on existing fallback language or synthetic LIBOR.
Due to the discontinuation of this important rate, ING, its customers, and the financial services industry
have faced and continue to face a number of risks. These risks include legal, financial, operational,
reputational and conduct risk. Legal risks are related to any required changes to existing transactions.
Financial risks may arise due to declining liquidity and may impact a contract directly or the ability to hedge
the risks in that contract. Operational risks arise due to the requirement to adapt IT systems, trade reporting
infrastructure and operational processes. Conduct risk also plays a role, as renegotiation of loan contracts
requires active engagement from all parties to a contract and may lead to negotiations concentrated in a
period close to actual cessation. ING continues to work with the very limited number of clients that are yet
to complete the USD LIBOR transition.
The progress of the IBOR transitioning between 2018 and 2023 was tracked in the global ING IBOR
programme, governed by business line steering committees, which reported to a central IBOR steering
committee. The programme coordinated the actions necessary to manage the required changes to internal
processes and systems, including pricing, risk management, legal documentation, hedge arrangements, as
well as the impact on customers. The limited amount of remaining USD LIBOR contracts continues to be
monitored within the commercial business lines following the closure of the bank-wide IBOR programme in
November 2023. The ING Benchmark Committee continues to monitor market developments and reform
plans for other rates, to anticipate the impact on any related risks.
One such development concerns the plans published by the Polish National Working Group, which advises
the market to be ready for a cessation of WIBOR and WIBID reference rates at the end of 2027 (originally
expected in 2025, but in the last quarter of 2023 the cessation date was postponed to the end of 2027) with
the offering of financial products using the new benchmark (Warsaw Interest Rate Overnight or WIRON) to
progress gradually and no new products using WIBOR and WIBID beyond 1 July 2024. The WIBOR rates are
used in several of our lending and derivative products, and hence a project team has been established to
manage the transition. WIBOR transition is especially important for our Polish subsidiary ING Bank Slaski S.A.
with a significant amount of Polish zloty-denominated assets and liabilities including derivatives that are
continuously rebalanced to hedge the risk exposures.
The tables below summarise the approximate gross exposures of ING that have yet to transition related to
USD LIBOR and WIBOR. For WIBOR, as of 31 December 2023, they exclude exposures expiring before the
transition date 31 December 2027 and of 31 December 2022 they exclude exposures expiring before the
previously expected transition date 1 January 2025. Therefore, WIBOR exposures are not directly
comparable between 31 December 2023 and 31 December 2022 as a consequence of the recent
developments in the Polish National Working Group.

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> Market risk
ING Bank Annual Report 2023 87

Non derivative Financial instruments to transition to alternative benchmarks (*)
in € million at 31 December 2023 | Financial Assets non- derivative | Financial Liabilities non-derivative | Off balance sheet commitments
| Carrying value | Carrying value | Nominal value
By benchmark rate |  |  |
USD LIBOR | 915 | 16 | 9
WIBOR | 18,064 |  | 1,021
Total | 18,979 | 16 | 1,030

Non derivative Financial instruments to transition to alternative benchmarks (*)
in € million at 31 December 2022 | Financial Assets non- derivative | Financial Liabilities non-derivative | Off balance sheet commitments
| Carrying value | Carrying value | Nominal value
By benchmark rate |  |  |
USD LIBOR | 30,040 | 1,637 | 7,644
WIBOR | 22,154 |  | 1,411
Total | 52,194 | 1,637 | 9,055

The total of non-derivative financial assets linked to USD LIBOR is reduced from €30,040 million on 31
December 2022 to €915 million on 31 December 2023. The majority of the non-derivative financial assets
exposure on 31 December 2023 are related to contracts using synthetic USD LIBOR up until the transition to
SOFR is complete during 2024. In addition, ING reduced its committed undrawn credit facilities linked to USD
LIBOR from €7,644 million on 31 December 2022 to €9 million on 31 December 2023. The total of non-
derivative financial liabilities linked to USD LIBOR is reduced from €1,637 million on 31 December 2022 to
€16 million on 31 December 2023. The remaining non-derivative financial instruments linked to USD LIBOR
are expected to transition before the next interest rate reset date. Therefore, the remaining exposure to
USD LIBOR is expected to reduce further during the first half of 2024.

Derivative Financial instruments to transition to alternative benchmarks (*)
| 31 December 2023 | 31 December 2022
in € million | Nominal value | Nominal value
By benchmark rate 1 |  |
USD LIBOR | 151 | 495,318
WIBOR | 77,238 | 136,318
Total | 77,388 | 631,636

1 For cross-currency swaps all legs of the swap are included that are linked to a main IBOR that is significant to ING.
In addition to the amounts in the table above, ING transitioned the interest rate swaptions that referred to
the USD LIBOR ICE swap rate (nominal value on 31 December 2022: €10,810 million). The transition of these
contracts was in general governed by a specific ISDA protocol.
Derivative financial instruments linked to USD LIBOR were reduced from €495,318 million on 31 December
2022 to only €151 million on 31 December 2023. The majority of derivatives linked to USD LIBOR rates were
transacted with clearing houses and transitioned through a standardised exercise during the second
quarter of 2023. For non-centrally cleared derivatives, the main transition occurred using the ISDA IBOR
fallback arrangements. The majority of the remaining derivative financial instruments linked to USD LIBOR
are related to contracts using synthetic USD LIBOR and linked to non-derivative financial assets that are
expected to transition before the next interest rate reset date during 2024. Therefore, a steady reduction of
these last few USD LIBOR contracts is expected during the first half of 2024.
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project:
• Phase 1 addresses those issues that affect financial reporting before the replacement of an existing
benchmark. This allows ING to apply a set of temporary exceptions to continue hedge accounting even
when there is uncertainty about contractual cash flows arising from the reform. Under these temporary
exceptions, interbank offered rates are assumed to continue unaltered for the purposes of hedge
accounting until such time as the uncertainty is resolved.
• Phase 2 focuses on issues that may affect financial reporting when the existing benchmark rate is
reformed or replaced. Phase 2 amendments to IFRS relate mainly to accounting for changes in the basis for
determining the contractual cash flows of financial assets and liabilities due to the IBOR reform and impact
on hedge accounting when an existing benchmark rate is reformed or replaced with an alternative risk-free
rate.

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> Market risk
ING Bank Annual Report 2023 88
Specifically, Phase 2 amendments require that the effective interest rate on debt financial instruments is
adjusted, and hedge accounting continues on transition to risk free rates, but only to the extent that the
modifications made to financial instruments are those necessary to implement the IBOR reform and that
the new basis for calculating cash flows is ‘economically equivalent’ to the previous basis. By applying these
mandatory amendments, ING Group avoids recognising modification gains and losses on debt instruments
that would otherwise be required in the absence of Phase 2 amendments (changes to debt instruments
resulting from IBOR reform are treated as a reset to the instrument’s variable interest rate). In addition, ING
Group avoids hedge accounting discontinuations when modifying both hedged items and hedging
instruments (and related hedge documentation) as a consequence of IBOR reform that would otherwise be
required in the absence of Phase 2 amendments.
As explained above, Phase 1 and Phase 2 IBOR amendments to IFRS, amongst other changes, provide
specific hedge accounting reliefs that allow hedge accounting relationships to continue when IBOR Reform
is ongoing. Phase 1 reliefs cease to apply when uncertainty arising from IBOR reform is no longer present
with respect to the timing and amount of the IBOR-based cash flows of the relevant instruments. It is ING
Group’s policy to cease to apply Phase 1 reliefs when the applicable contract (either hedging instrument or
hedged item) is actually modified. As a result, for these hedge accounting relationships the applicable
Phase 1 reliefs ceased to apply and Phase 2 became applicable. Refer to section 1.5.4 of Note 1 ‘Basis of
preparation and material accounting policy information’ for more information on the Phase 1 and Phase 2
amendments.
Furthermore, hedging relationships are being amended to incorporate the new benchmark rates. During
2023, ING focused on USD LIBOR contracts and all hedging relationships have been amended to incorporate
the new benchmark rates and do no longer reference USD LIBOR rates.
On 31 December 2023, Phase 1 reliefs are applicable to WIBOR indexed fair value and cash flow hedge
accounting relationships as there is uncertainty arising from the WIBOR reform with respect to the timing
and the amount of the underlying cash flows that the Group is exposed to. Therefore, for WIBOR financial
instruments designated in hedge accounting the applicable Phase 1 reliefs will continue to apply until the
relevant contract is modified. At that point in time, Phase 2 reliefs will become applicable. For these affected
fair value and cash flow hedge relationships ING assumes that the WIBOR based cash flows from the
hedging instrument and hedged item will remain unaffected.
The same assumption is used to assess the likelihood of occurrence of the forecast transactions that are
subject to cash flow hedges. The hedged cash flows in cash flow hedges directly impacted by the WIBOR
reform still meet the highly probable requirement, assuming the WIBOR benchmark on which the hedged
cash flows are based is not altered as a result of the reform.
The total gross notional amounts of hedging instruments that are used in the ING's hedge accounting
relationships for which the Phase 1 amendments to IAS39 were applied are:

Notional amounts of Hedging instruments (*)
| 31 December 2023 | 31 December 2022
in € million | Nominal value | Nominal value
By benchmark rate |  |
USD LIBOR |  | 28,316
WIBOR | 89,338 | 57,774

As at 31 December 2023, all USD LIBOR hedging relationships have been amended to incorporate the new
benchmark rates and do no longer reference USD LIBOR rates. At 31 December 2022 approximately 89% of
the notional amounts for USD LIBOR had a maturity date beyond the transition date 30 June 2023.
Approximately 29% of the notional amounts for WIBOR have a maturity date beyond the new transition
date 31 December 2027. At 31 December 2022, approximately 71% of the notional amounts for WIBOR
had a maturity date beyond the previously expected transition date of 1 January 2025. The WIBOR
amounts are not directly comparable between 31 December 2023 and 31 December 2022 as a
consequence of the recent postponement of the cessation of WIBOR by the Polish National Working Group.
The notional amounts of the derivative hedging instruments provide a close approximation of the extent of
the risk exposure ING manages through these hedging relationships.
Credit spread risk in banking books (*)
Credit spread risk is defined as risk driven by the changes of the market price for credit risk, for liquidity and
potentially other characteristics of credit-risky instruments, which is not captured by another existing
prudential framework such as IRRBB or by expected credit/(jump-to-) default risk.
EBA guidelines
The updated guidelines on credit spread risk in the banking book (CSRBB) became effective on 31 December
2023. Following the EBA guidelines, the scope in terms of positions and metrics has been reviewed and
updated during 2023. Metrics used are NPV-at-Risk, NII-at-Risk and Market Value Changes-at Risk and view
the positions across different accounting treatments.
Governance
The management of credit spread risk follows the CSRBB framework as approved by ALCO Bank. This
framework describes roles, responsibilities, risk metrics, and the policies and procedures related to credit
spread risk management. Furthermore, ALCO Bank reviews and sets the risk appetite for credit spread risk
on an annual basis. The risk appetite is translated into limits for the risk metrics.

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> Market risk
ING Bank Annual Report 2023 89
Foreign exchange (FX) risk in banking books (*)
FX exposures in banking books result from core banking business activities (business units doing business in
currencies other than their base currency), foreign currency investments in subsidiaries (including realised
net profit and loss), and strategic equity stakes in foreign currencies. The policy regarding these exposures is
briefly explained below.
Governance – Core banking business (*)
Every business unit hedges the FX risk resulting from core banking business activities into its base currency
to prevent volatility in profit and loss. Consequently, assets and liabilities are matched in terms of currency,
within certain friction limits.
Governance – FX translation result (*)
ING’s strategy is to protect the CET1 ratio against adverse impact from FX rate fluctuations, while limiting
the volatility in the profit and loss account due to this CET1 hedging and limiting the RWA impact under the
regulatory framework. Hedge accounting is applied to the largest extent possible. Taking this into account,
the CET1 ratio hedge can be achieved by deliberately taking foreign currency positions equal to certain
target positions, such that the CET1 capital and risk-weighted assets are equally sensitive in relative terms
to changing FX rates.
Risk profile – FX translation result (*)
The following table presents the currency exposures in the banking books for the most important currencies
for the FX translation result. Positive figures indicate long positions in the respective currency. As a result of
the strategy to hedge the CET1 ratio an open structural FX exposure exists.
To measure the volatility of the CET1 ratio from FX rate fluctuations, different metrics are used including the
CET1 Ratio-at-Risk. The impact is controlled via the Solvency and Market Risk Banking Book RAS.
EBA Structural FX guidelines
In line with the EBA guidelines on Structural FX, upon permission from the competent authorities, certain
currency positions are being excluded from the calculation of net open currency positions under CRR article
352(2). The resulting impact is presented in the Pillar 3 disclosure.

Foreign currency exposures banking books (*)
in € million | Foreign Investments | Hedges | Net exposures
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022
US dollar 1 | 10,337 | 10,470 | -3,416 | -2,376 | 6,921 | 8,093
Pound Sterling | 1,659 | 1,364 | -156 | -58 | 1,503 | 1,306
Polish Zloty | 3,976 | 2,714 | -1,254 | -321 | 2,722 | 2,393
Australian Dollar | 3,620 | 3,781 | -2,273 | -2,673 | 1,346 | 1,108
Turkish Lira | 517 | 750 |  |  | 517 | 750
Chinese Yuan | 1,815 | 1,871 | -348 |  | 1,466 | 1,871
Russian Rouble | 375 | 391 |  |  | 375 | 392
Romanian Leu | 895 | 860 | -134 | -154 | 761 | 706
Thai Baht | 1,128 | 1,109 | -697 | -699 | 431 | 410
Other currency | 3,704 | 3,771 | -2,897 | -2,908 | 806 | 863
Total | 28,024 | 27,081 | -11,175 | -9,189 | 16,849 | 17,892

*The FX sensitivity is expressed as the FX spot equivalent position.
Equity price risk in banking books (*)
Governance (*)
ING maintains a portfolio with substantial equity exposure in its banking books. Local offices are responsible
for the management of the equity investment positions. Financial Risk is responsible for monitoring the
regulatory capital for equity investments on a monthly basis and acts independently from ING/local
management when monitoring these positions.
Risk profile (*)
Equity price risk arises from the possibility that an equity security’s price will fluctuate, affecting the values
of the equity security itself as well as other instruments whose values react similarly to the particular
security, a defined basket of securities, or a securities index. ING’s equity exposure mainly consists of the
investments in associates and joint ventures of €1,509 million (2022: €1,500 million) and equity securities
held at fair value through other comprehensive income (FVOCI) of €1,885 million (2022: €1,887 million). The
value of equity securities held at FVOCI is directly linked to equity security prices with increases/decreases
being recognised in the revaluation reserve. Investments in associates and joint ventures are measured in
accordance with the equity method of accounting and the balance sheet value is therefore not directly
linked to equity security prices. The equity sensitivity is expressed as the equity position.

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> Market risk
ING Bank Annual Report 2023 90
Year-on-year variance analysis (*)
In 2023, the revaluation reserve equity securities decreased by €34 million from €1,187 million to €1,152
million mainly due to revaluation of the shares in Bank of Beijing with € -24 million. In 2023, the equity
securities at fair value through OCI decreased slightly by €2 million.

Revaluation reserve equity securities at fair value through other comprehensive income (*)
in € million | 2023 | 2022
Positive re-measurement | 1,158 | 1,190
Negative re-measurement | -6 | -4
Total | 1,152 | 1,187

Market risk in trading books (*)
Within the trading portfolios, the positions are maintained in the financial markets. These positions are
often a result of transactions with clients and may benefit from short-term price movements. In 2023, ING
continued its strategy of undertaking trading activities to develop its client-driven franchise and deliver a
differentiating experience by offering multiple market and trading products.
Governance (*)
The Financial Markets Risk Committee (FMRC) is the market risk committee that, within the risk appetite set
by the ALCO Bank, sets the market risk limits both on an aggregated level and on a desk level. The FMRC has
delegated authority from ALCO Bank for the management of market risk related to all trading and banking
book activities within Financial Markets (FM). Financial Risk/ Trading Risk Management (FR/ TRM) advises both
FMRC and ALCO Bank on the market risk appetite of the trading activities.
With respect to the trading portfolios, TRM focuses on the management of market risks of Wholesale
Banking (mainly Financial Markets) as this is the only business line within ING where trading activities take
place. Trading activities include facilitation of client business and market making. TRM is responsible for the
development and implementation of trading risk policies and risk measurement methodologies, and for
reporting and monitoring risk exposures against approved trading limits. TRM also reviews trading
mandates and global limits, and performs the gatekeeper role in the product review process (PARP).
Risk measurement (*)
ING uses a comprehensive set of methodologies and techniques to measure market risk in trading books:
Value at Risk (VaR) and Stressed Value at Risk (SVaR), Incremental Risk Charge (IRC), and stress testing.
Systematic validation processes are in place to validate the accuracy and internal consistency of data and
parameters used for the internal models and modelling processes.
Value at Risk (*)
TRM uses the historical simulation VaR methodology (HVaR) as its primary risk measure. The HVaR for
market risk quantifies, with a one-sided confidence level of 99 percent, the maximum overnight loss that
could occur in the trading portfolio of ING due to changes in risk factors (e.g. interest rates, equity prices,
foreign exchange rates, credit spreads, implied volatilities) considering the positions remains unchanged for
a time period of one day.
Next to general market movements in these risk factors, HVaR also takes into account market data
movements for specific moves in, for example, the underlying issuer or securities. A single model which
diversifies general and specific risk is used. In general, a full revaluation approach is applied, while for a
limited number of linear trading positions and risk factors in commodity and equity risk classes a sensitivity-
based approach is applied. The potential impact of historical market movements on today’s portfolio is
estimated, based on equally weighted observed market movements of the previous year (260 business
days). When simulating potential movements in risk factors, depending on the risk factor type, either an
absolute or a relative shift is used.
The data used in the computations is updated daily. ING uses HVaR with a one-day horizon for internal risk
measurement, management control, and backtesting, and HVaR with a 10-day horizon for determining
regulatory capital. To compute HVaR with a 10-day horizon, the one-day risk factor shifts are scaled by the
square root of 10 and then used as an input for the revaluation. The same model is used for all legal entities
within ING with market risk exposure in the trading portfolio.
Limitations (*)
HVaR has some limitations: HVaR uses historical data to forecast future price behaviour, but future price
behaviour could differ substantially from past behaviour. Moreover, the use of a one-day holding period (or
10 days for regulatory capital calculations) assumes that all positions in the portfolio can be liquidated or
hedged in one day. In periods of illiquidity or market events, this assumption may not hold. Also, the use of
a 99 percent confidence level means that HVaR does not take into account any losses that occur beyond
this confidence level.
Backtesting (*)
Backtesting is a technique for the ongoing monitoring of the plausibility of the HVaR model in use. Although
HVaR models estimate potential future trading results, estimates are based on historical market data. In a
backtest, the actual daily trading result (excluding fees and commissions) is compared with the one-day
HVaR.
In addition to using actual results for backtesting, ING also uses hypothetical results, which exclude the
effects of intraday trading, fees, and commissions. When an actual or a hypothetical loss exceeds the HVaR,

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> Market risk
ING Bank Annual Report 2023 91
an ‘outlier’ occurs. Based on ING’s one-sided confidence level of 99 percent, an outlier is expected once in
every 100 business days.
On an overall level in 2023, there was one outlier for hypothetical P&L and zero outliers for actual P&L. The
hypothetical outliers occurred during the past year concentrated in the first quarter of 2023, mainly due to
the increased market volatility arising from major American banks being collapsed.
Stressed HVaR (*)
The stressed HVaR (SVaR) is intended to replicate the HVaR calculation that would be generated on the
bank’s current portfolio with inputs calibrated to the historical data from a continuous 12-month period of
significant financial stress relevant to the bank’s portfolio.
To calculate SVaR, ING uses the same model that is used for 1DHVaR, with a 10-day horizon. The data for
the historical stress period used currently includes the height of the credit crisis around the fall of Lehman
Brothers (2008-2009), and this choice is reviewed regularly. The historical data period is chosen so that it
gives the worst scenario loss estimates for the current portfolio. The same SVaR model is used for
management purposes and for regulatory purposes. The same SVaR model is used for all legal entities
within ING with market risk exposure in the trading portfolio.
Incremental risk charge (*)
The incremental risk charge (IRC) for ING is an estimate of the default and migration risks for credit products
(excluding securitisations) in the trading book, over a one-year capital horizon, with a 99.9% confidence
level. Trading positions (excluding securitisations) of ING, which are subject to specific interest rate risk
included in the internal model approach for market risk regulatory capital, are in scope of the IRC model. By
model choice, equity is excluded from the model. For the calculation of IRC, ING performs a Monte Carlo
simulation based on a multi-factor t-copula. In the multi-factor IRC model the supervisory asset correlations
are no longer applicable and the calibration of the correlations is based on historical market data. The rating
change is simulated for all issuers over the different liquidity horizons (i.e. time required to liquidate the
position or hedge all significant risks) within one year. Movements across different rating categories and
probabilities of default are governed by a credit-rating transition matrix. An internal transition matrix along
with internal LGDs is used, to comply with the consistency requirement. The financial impact is then
determined for the simulated migration to default, or for the simulated migration to a different rating
category, based on LGD or credit spread changes, respectively.
The liquidity horizon has been set to the regulatory minimum of three months for all positions in scope. ING
reviews the liquidity horizons on a yearly basis, based on a structured assessment of the time it takes to
liquidate the positions in the trading portfolio.
Stress testing and event risk (*)
Stress testing is a valuable risk management tool. In addition to the bank-wide stress test framework as
described in the stress-testing section, Trading Risk Management performs stress tests specific to the
trading book with various frequencies. ING went live with a new Trading Book Stress Testing model in 2023,
replacing the previously used Event Risk model. With the new model, the trading book stress tests evaluate
the impact on the bank’s trading book under severe but plausible stress scenarios, using full revaluation
approach. The framework is based on historical as well as hypothetical scenarios. The stress result is an
estimate of the profit and loss caused by a potential event and its worldwide impact for ING. The results of
the stress tests are used for decision-making aimed at maintaining a financially healthy going-concern
institution after a severe event occurs.
In stress scenarios, shocks are applied to prices (credit spreads, interest rates, equity, commodities, and FX
rates) and volatilities. Depending on the type of the stress test, additional scenario assumptions can be
made, for example on correlations, dividends, or recovery rates. The structural scenarios are defined to
cover market moves in various directions and capture different asset class correlations. Scenarios are
calculated using full revaluation approach. The worst scenarios are determined for each product line,
business line and super business line, and compared against limits.
Other trading controls
HVaR and event risk limits are the most important limits to control the trading portfolios. Additionally, limits
have been set on SVaR and IRC, and ING uses a variety of other controls to supplement these limits. Position
and sensitivity limits are used to prevent large concentrations in specific issuers, sectors, or countries.
Moreover, other risk limits are set with respect to the activities in complex derivatives trading. The market
risk of these products is controlled by product-specific limits and constraints.
Risk profile
The following chart shows the development of the overnight HVaR under a 99 percent confidence level and
a one-day horizon versus actual and hypothetical daily trading profits and losses. In calculation of the
hypothetical daily profit and loss, the trading position is kept constant and only the market movement is
taken into account. The overnight HVaR is presented for the ING trading portfolio for 2023.

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> Market risk
ING Bank Annual Report 2023 92
The risk figures in the above backtesting graph and in the table below relate to all trading books for which
the internal model approach is applied, i.e. all trading books, including credit exposure management books.

1d VaR for internal model approach trading portfolios
in € million | Minimum | Maximum | Average | Year end
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Interest rate 1 | 6 | 1 | 23 | 17 | 15 | 9 | 8 | 13
Equity and commodity | 2 | 2 | 4 | 7 | 3 | 3 | 2 | 2
Foreign exchange | 1 | 1 | 8 | 22 | 3 | 4 | 2 | 3
Credit spread | 2 | 1 | 10 | 15 | 5 | 4 | 5 | 1
Diversification 2 |  |  |  |  | -8 | -9 | -8 | -5
Total VaR 2 | 9 | 5 | 29 | 22 | 18 | 12 | 9 | 14

1 For calculation of HVaR per risk class the full valuation is performed according to HVaR methodology using a set of scenario changes
for the risk factors for the particular risk class, while risk factors for all other risk classes are kept unchanged.
2 The total HVaR for the columns Minimum and Maximum cannot be calculated by taking the sum of the individual components since
the minimum/maximum observations for both the individual markets as well as for total HVaR may occur on different dates.
Therefore, diversification is not calculated for the minimum and maximum categories.
Average 1D/10D HVaR, 10D SVaR and IRC over 2023 has increased compared to 2022. The capital increase is
driven by an increase in market volatility following the US bank collapse from March 2023. The overall
average has increased in 2023, especially for interest rate which increased due to the US banking crisis. The
year end 1D HVaR has decreased from €14 million in 2022 to €9 million at period end of 2023, due to low
positions at year-end of 2023.
ING doesn’t calculate comprehensive risk capital charge and therefore it appears as N/A in the table below.

EU MR3: Internal model approach values for trading portfolios
in € million | 2023 | 2022
VaR (10 day 99%) |  |
1 Maximum value | 84 | 79
2 Average value | 53 | 37
3 Minimum value | 25 | 15
4 Period end | 25 | 42
Stressed VaR (10 day 99%) |  |
5 Maximum value | 116 | 147
6 Average value | 82 | 77
7 Minimum value | 57 | 47
8 Period end | 69 | 65
Incremental Risk Charge (99.9%) |  |
9 Maximum value | 304 | 270
10 Average value | 151 | 113
11 Minimum value | 48 | 34
12 Period end | 108 | 76
Comprehensive Risk capital charge (99.9%) |  |
13 Maximum value | n/a | n/a
14 Average value | n/a | n/a
15 Minimum value | n/a | n/a
16 Period end | n/a | n/a

Regulatory capital
According to the Capital Requirements Regulation (CRR/CRD IV), regulatory capital (own funds requirements)
for market risk can be calculated using the standardised approach or an internal model approach. ING
received regulatory approval to use an internal model to determine the regulatory capital for the market
risk in all trading books of ING. Market risk capital of trading books is calculated according to the CRR, using
internal HVaR, SVaR, and IRC models, where diversification is taken into account. Capital for foreign

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> Market risk
ING Bank Annual Report 2023 93
exchange risk from the banking books and for collective investment undertakings (CIUs) exposures in
trading books are calculated using the standardised approach with fixed risk weights. ING does not have a
correlation trading portfolio or any other securitisations in the trading book.
Standardised approach

EU MR1: Market risk under Standardised Approach
in € million | 2023 | 2022
| RWA | RWA
Outright products |  |
1 Interest rate risk (general and specific) | 40 | 10
2 Equity risk (general and specific) |  |
3 Foreign exchange risk | 4,811 | 5,332
4 Commodity risk |  |
Options |  |
5 Simplified approach |  |
6 Delta-plus method |  |
7 Scenario approach |  |
8 Securitization (specific risk) |  |
9 Total | 4,851 | 5,342

The MRWA under standardised approach have decreased compared to 2023. In 2023, MRWA is calculated
for FX exposures, in line with the new CRR standardised approach that was introduced in 2022.
Internal model approach
Market risk regulatory capital has increased during 2023 compared to 2022. This mainly reflects higher
interest rate positions during 2023.

EU MR2-A: Market risk under Internal Model Approach
in € million | 2023 | 2022
|  | RWA | Total own funds requirements | RWA | Total own funds requirements
1 | VaR (higher of values a and b) | 2,508 | 201 | 2,732 | 219
(a) | Previous day’s VaR (VaRt-1) |  | 26 |  | 49
(b) | Multiplication factor (mc) x average of previous 60 working days (VaRavg) |  | 201 |  | 219
2 | SVaR (higher of values a and b) | 4,385 | 351 | 3,427 | 274
(a) | Latest available SVaR (SVaRt-1)) |  | 75 |  | 70
(b) | Multiplication factor (ms) x average of previous 60 working days (sVaRavg) |  | 351 |  | 274
3 | IRC (higher of values a and b) | 1,746 | 140 | 1,934 | 155
(a) | Most recent IRC measure |  | 108 |  | 76
(b) | 12 weeks average IRC measure |  | 140 |  | 155
4 | Comprehensive risk measure (higher of values a, b and c) |  |  |  |
(a) | Most recent risk measure of comprehensive risk measure |  |  |  |
(b) | 12 weeks average of comprehensive risk measure |  |  |  |
(c) | Comprehensive risk measure - Floor |  |  |  |
5 | Other | 810 | 65 | 516 | 41
6 | Total | 9,449 | 756 | 8,609 | 689

Sensitivities (*)
As part of the risk monitoring framework, TRM actively monitors the sensitivities of the trading portfolios.
Sensitivities measure the impact of movements in individual market risk factors (foreign exchange rates,
interest rates, credit spreads, equity and commodity prices) on profit and loss results of the trading
positions and portfolios.
The following tables show the five largest trading positions in terms of sensitivities to foreign exchange,
interest rate and credit spread risk factor movements. These largest exposures also reflect concentrations
of risk in FX risk per currency, interest rate risk per currency, and credit spread risk per country, rating and
sector. Due to the nature of the trading portfolios, positions in the portfolios can change significantly from
day to day, and sensitivities of the portfolios can change daily accordingly.

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> Market risk
ING Bank Annual Report 2023 94

Most important foreign exchange year-end trading positions (*)
in € million | 2023 |  | 2022
Foreign exchange |  | Foreign exchange |
Japanese Yen | 61 | US Dollar | -187
Taiwan Dollar | -58 | Romanian Leu | 88
Romanian Leu | 58 | Japanese Yen | 86
Chinese Yuan | 49 | Chinese Yuan | 32
Hong Kong Dollar | -38 | South Korean Won | 28

Most important interest rate and credit spread sensitivities at year-end (*)
in € thousand | 2023 |  | 2022
Interest Rate (BPV1) |  | Interest Rate (BPV1) |
Euro | -309 | Euro | -334
Czech koruna | 71 | British Pound | -95
Korean Won | -41 | US Dollar | -79
US Dollar | -40 | Taiwan Dollar | 67
British Pound | -35 | Japanese Yen | 63
Credit Spread (CSO12) |  | Credit Spread (CSO12) |
Germany | 405 | Netherlands | 162
Netherlands | 120 | United States | 151
Korea | -111 | Japan | 102
Japan | 106 | France | 88
United Kingdom | 101 | Germany | 87

1 Basis point value (BPV) measures the impact on value of a one basis point increase in interest rates.
2 Credit spread sensitivity (CS01) measures the impact on value of a one basis point increase in credit spreads. Exposures to supranational institutions are not assigned to a specific country.

Credit spread sensitivities per risk class and sector at year-end (*)
| 2023 | 2022
in € thousand | Corporate | Financial Institutions | Corporate | Financial Institutions
Credit Spread (CSO1) 1 |  |  |  |
Risk classes |  |  |  |
1 (AAA) |  |  | 2 | -1
2–4 (AA) | 12 | 50 | -1 | -7
5–7 (A) | 57 | 50 | 154 | -13
8–10 (BBB) | 106 | 13 | 249 | -11
11–13 (BB) | 25 | -25 | 7 | 7
14–16 (B) | 17 | -4 | 23 | -4
17–22 (CCC and NPL) | -8 | -20 | 3 | -7
Not rated |  |  |  |
Total | 208 | 65 | 437 | -36

1 Credit Spread Sensitivity (CS01) measures the impact on value of a 1 basis point increase in credit spreads.

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> Market risk
ING Bank Annual Report 2023 95
Funding and liquidity risk (*)
Introduction (*)
Funding and liquidity (F&L) risk is the risk that ING or one of its subsidiaries cannot meet their financial
liabilities upon their maturity date at a reasonable cost and in a timely manner. ING incorporates funding
and liquidity risk management in its business strategy, and has established a funding and liquidity risk
framework to manage these risks within predefined boundaries.
A high-level overview of the F&L framework is provided in the next figure.
Governance (*)
Funding and liquidity risk management within ING falls under the supervision of the ALCO Bank function,
which approves the funding and liquidity risk appetite and subsequently cascades it throughout the
organisation. ALCO Bank has delegated the responsibilities of the Internal Capital and Liquidity Adequacy
Assessment Process (ICLAAP) and documents, as per the ICLAAP framework of ING, to the ICLAAP
Committee. The ICLAAP Committee therefore focuses on technical liquidity documents and oversees
business processes and deliverables concerning the Internal Liquidity Adequacy Assessment Process
(ILAAP). The EB, MBB, and staff departments from the CRO and CFO domains, as well as Group Treasury,
have oversight of, and are responsible for, managing funding and liquidity risks.
ING’s funding and liquidity risk governance is based on the three-lines-of-defence structure. This sets a clear
division of responsibilities as well as an independent risk control challenge process. Group Treasury and the
business lines have the first-line-of-defence functions, which include management of ING’s (regulatory)
liquidity and funding position, maintaining access to the professional funding markets, and managing the
liquidity buffer. Financial Risk, as the second line of defence, is responsible for developing and maintaining
ING’s policies, standards and guidelines on F&L risk management, as well as for setting the F&L risk appetite
through stress testing and other risk measurement activities. The Finance function is responsible for
management information and regulatory reporting related to funding and liquidity risk management. As
the third line of defence, Corporate Audit Services is responsible for independently assessing the design,
effectiveness, and implementation of the Funding & Liquidity framework.

Funding and liquidity management strategy and objectives (*)
The main objective of ING’s funding and liquidity risk management is to maintain sufficient liquidity to fund
the commercial activities of ING, both under normal and stressed market circumstances across various
locations, currencies, and tenors.
ING’s funding consists mainly of retail and corporate deposits contributing around 50 percent and 25
percent of total funding, respectively. These funding sources provide a relatively stable funding base. The
remainder of the required funding is attracted primarily through a combination of long-term and short-term

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professional funding. Group Treasury manages the professional funding in line with the F&L risk appetite,
with the aim of ensuring a sufficiently diversified and stable funding base.

Funding mix 1
| 2023 | 2022
Funding type |  |
Customer deposits (retail) | 52% | 51%
Customer deposits (corporate) | 27% | 28%
Lending/repurchase agreements | 7% | 6%
Interbank | 2% | 6%
CD/CP | 5% | 3%
Long-term senior debt | 5% | 4%
Subordinated debt | 2% | 2%
Total | 100% | 100%
1 Liabilities excluding trading securities and IFRS equity. |  |

Funding and liquidity adequacy and risk appetite (*)
ING identifies key drivers of short-term and future liquidity and funding needs on an ongoing basis through
the periodic risk identification process. Taking into consideration the identified risk drivers, ING regularly
assesses its current and future liquidity adequacy and, if deemed necessary, takes action to further improve
ING’s liquidity position and maintain sufficient counterbalancing capacity. A liquidity adequacy statement is
formulated on a quarterly basis to substantiate and reflect the management view on the current funding
and liquidity position as well as the potential future challenges. The quarterly liquidity adequacy statement
is an important part of ING’s ILAAP process.
Additionally, ING completes ad-hoc funding and liquidity assessments if deemed necessary. Following the
banking turmoil in March 2023, ING completed a lessons-learned deep-dive. This deep-dive included peer
and internal analysis of deposit structures and liquidity buffers, and a review of the influence of mobile
banking apps and social media on financial institutions. The F&L risk appetite subsequently incorporated
elements of this analysis, as well as the impacts of quantitative tightening, TLTRO III redemptions, increased
competition for savings in the higher-interest-rate-environment and potentially higher deposit outflows in
certain countries, in the 2023 review.
ING assesses its F&L adequacy through three lenses – stress, economic and normative:
• Through the stress lens, ING evaluates its ability to withstand periods of prolonged F&L stress for both
normative and economic requirements or limits under idiosyncratic, market-related, a combination of
idiosyncratic and market-related and climate risk scenarios, which lead to customer deposit outflows,
deterioration of access to funding markets, and lower liquidity value of counterbalancing capacity.
• Through the economic lens, ING assesses the extent to which its customers, professional counterparties
and investors are comfortable to provide deposits and funding in the tenors, currencies, and instruments
necessary to sustainably fund the business (intraday, short-term and long-term) in a going-concern
situation.
• Through the normative lens, ING ascertains that the bank is in the position to meet current and future
home and host regulatory requirements.
For each lens, ING has established a related set of risk appetite statements, which define ING’s risk appetite
commensurate with the principles of liquidity adequacy. These risk appetite statements are summarised in
the following illustration:

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ING Bank Annual Report 2023 97

The F&L risk appetite statements are translated into a number of metrics with appropriate boundaries and
instruments, which are used to regularly measure and manage ING’s funding and liquidity risk. The risk
appetite with respect to the stress lens aims to have sufficient counterbalancing capacity under various
internally defined stress scenarios. Regarding the economic perspective, an internally defined stable funding
to loans (SFtL) ratio and stable funding surplus metric (supplemented by other metrics) is used to stimulate
a diversified funding base and to prevent overreliance on professional funding. Finally, the liquidity coverage
ratio (LCR) and the net stable funding ratio (NSFR) regulatory metrics are monitored in terms of both ING’s
risk appetite and normative requirements.
The macroeconomic and market environment are also important considerations in ING’s funding and
liquidity framework. The macroeconomic environment comprises various exogenous factors over which ING
has no control, but which may have a material impact on ING’s F&L position. The main macroeconomic
factors analysed on a regular basis include:
• Performance of global and local economic performance e.g. shifts in GDP, inflation rates, unemployment
rates, and public deficit/surplus;
• Developments and risks arising from geopolitical tensions and related trends;
• Monetary policy with a focus on the alternative monetary measures employed by central banks in
recent years as a result of the global energy crisis and the recent period of high inflation;
• Regulatory requirements; e.g. understanding the changing regulatory landscape as well as the impact of
ING’s actions on existing regulatory boundaries.
The strategic ambitions of ING, together with the design and execution of the funding plan, are assessed
under both current and projected market conditions. An emphasis is placed on understanding overall
market trends and developments, credit rating changes, and peer comparisons.
Liquidity stress-testing (*)
Funding and liquidity stress-testing forms part of the overall F&L framework. It allows ING to examine the
effects of exceptional but plausible future events on ING’s funding and liquidity position. It also provides
insight into which entities, business lines or portfolios are vulnerable to which types of risk drivers or
scenarios.
The stress-testing framework encompasses the funding and liquidity risks of the consolidated balance sheet
of ING, including all entities, business lines as well as on-, and off-balance-sheet positions. The net liquidity
position (NLP) is the main stress-testing measure and is measured at different time buckets.
The stress-testing framework considers idiosyncratic, market-wide, combined (idiosyncratic and market-
wide), and climate and environmental stress scenarios. The design of the framework is based on empirical
evidence supplemented by expert judgement. The framework can be extended to additional ad-hoc
scenarios. For example, it can be used as input for firm-wide stress testing and reverse stress testing.
Outcomes of the stress tests are considered in the key aspects of ING’s F&L risk framework and F&L risk
management, including:
• Risk Appetite Framework (through risk appetite statements);
• Risk identification and assessment;
• Monitoring of the liquidity and funding position;
• Business actions (if needed);
• Contingency funding plan;

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ING Bank Annual Report 2023 98
• Early-warning indicators.
The funding and liquidity stress-testing framework is also subject to regular internal validation by model
validation.
In line with supervisory expectations, ING’s liquidity position is stress tested on at least a monthly basis
using scenarios that form part of the F&L risk appetite statement. The results of all internal stress scenarios
are monitored and assessed on a regular basis. In addition, ad-hoc scenarios based on current economic
and market developments are run to determine their potential impacts on the funding and liquidity position
of ING. In 2023, this included stress test scenarios dedicated to the impact of rapid deposit outflows on the
bank, as well as a shutdown of short and long-term funding markets. The internal stress scenarios also serve
as input in the decision on additional contingency measures.
Contingent F&L risks are addressed in the contingency capital and funding plan with a focus on early-
warning indicators as well as organisation and planning of liquidity management in times of stress. The
contingency funding measures are developed in conjunction with the ING recovery plan and are reviewed
and tested on a regular basis

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ING Bank Annual Report 2023 99
Environmental, social and governance risk
Introduction
Environmental, social and governance (ESG) risk is not identified as an independent risk category/ risk type.
Rather, it is a set of drivers affecting the likelihood and severity of existing risk categories/ risk types. ESG risk
is an overarching set of risk drivers affecting:
• Financial risks: solvency risk, credit risk, market risk, funding & liquidity risk;
• Non-financial risks: operational risk, IT risk, reputational/litigation risk, compliance risk;
• Other overarching risks: model risk and business risk.
ESG risk is defined as any negative financial and/or non-financial impact on ING due to the present or future
impacts from ESG factors on and stemming from ING’s own operations – as well as its business activities as
a company, its counterparties, and any sourced processes. The ESG risk definition considers:
• ESG risk with regards to own operations: The risk of any negative financial and/or non-financial impact
due to an ESG factor causing damage to ING’s infrastructure, or due to an adverse reputational impact
resulting from non-compliance with ING’s commitments and ESG-related laws, regulations and
disclosures.
• ESG risk with regards to business activities: The risk of any negative financial and/or non-financial impact
due to an ESG factor causing damage to ING’s business activities (for example from lending to
counterparties, investment exposures, funding activities and sourcing processes).
ESG factors are defined as environmental, social or governance matters that may have a positive or
negative impact on the financial performance or solvency of an entity, sovereign or individuals.
• Environmental factors are related to the quality and functioning of the natural environment and of
natural systems, and include factors such as climate change, biodiversity and ecosystems, water and
marine resources, resource use and circular economy, and pollution. Environmental factors are defined
as environmental matters that may have a positive or negative impact on the financial performance or
solvency of an entity, sovereign or individual.
• Social factors are related to the rights, well-being and interests of people and communities, and include
factors such as (in)equality, health, employee empowerment, diversity and inclusion, employee and
customer health, safety and protection, inclusiveness, labour relations, human rights, workplace health
and safety, human capital and communities.
• Governance factors cover corporate governance practices, including executive leadership, executive
compensation, audits, internal controls, sound tax practices, board independence, shareholder rights,
ethical considerations, anti-corruption and bribery, sound risk management structures, organisation and
functioning of the management body, transparency with regards to disclosures of information rules and
practices and also the way in which companies or entities include environmental and social factors in
their policies and procedures.
Within environmental risks a further distinction is made between physical and transition risk.
• Physical risks refer to any negative financial and/or non-financial impact due to the physical effects of
environmental factors. Such physical effects include:
• Acute physical effects, which arise from:
• Climate-related (weather-related) hazards such as storms, floods, fires or heatwaves.
• Other environmental hazards related to biodiversity and ecosystems, water and marine resources,
resource use and circular economy and pollution, that may damage production facilities and
disrupt value chains.
• Chronic physical effects, which arise from longer-term trends (progressive shifts), such as
temperature changes, rising sea levels, reduced water availability, biodiversity loss and changes in
land and soil productivity.
• Transition risks refer to any negative financial and/or non-financial impact due to the effect of the
transition to a net-zero and more environmentally sustainable economy. The transition includes:
• Climate and environment related policy changes;
• Technological changes;
• Market sentiment and demand changes.
Governance
The ad hoc ESG committee is responsible for supervising ING’s ESG direction, endorsing and monitoring
progress, and advising the MBB on dilemmas. The ESG Sounding Board, comprised of senior leaders, guides
the development and implementation of ESG topics as well as reporting on progress. Further details on ESG
risk governance are provided in the section below.
ESG Risk Committee (ERC)
The ERC is a standing committee at ING involved in matters related to ESG risk. It is the primary oversight
committee for ESG risk matters such as ESG risk methodologies, ESG risk internal and external reporting, the
ESG risk framework, and the manner in which we address regulatory requirements related to ESG risk. The
ERC oversees the management of ESG risk for ING. The committee also facilitates cross-functional alignment
and decision-making on material operational issues (for risk types on which ESG risk has a material impact).
The ERC is established as a technical board, and is serving MBB and/or MBB delegated committees
(depending on the topic) as support in decision-making, and ensures that ESG risk related matters discussed
at the SB are executed and delivered on.

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ING Bank Annual Report 2023 100
The MBB delegated committees involved are the Global Credit and Trading Policy Committee (GCTP), Bank
Non-Financial Risk Committee (BNFRC), Model Risk Management Committee (MoRMC), Asset and Liability
Committee (ALCO), and Global Credit Committee Transaction Approvals (GCC- TA).
ESG Risk department
The ESG Risk department is a function that is part of ING's second line of defence. The head of ESG Risk
reports to the head of Integrated Risk, reporting directly to ING’s Chief Risk Officer (CRO). The ESG Risk
department, under the leadership of the head of ESG Risk, is responsible for adapting ING’s risk
management framework to account for ESG risk. The ESG Risk department challenges and provides
oversight on the implementation of ESG risk practices by the first line of defence.
The ESG Risk department is responsible for:
• Maintaining the ESG risk framework and related policies and mandatory instructions;
• Addressing the requirements of ESG risk regulations and supervisory guidance, such as the European
Central Bank's (ECB) guide on climate-related and environmental (C&E) risks;
• Setting ESG risk appetite;
• Identifying and assessing ESG risk;
• Monitoring and reporting ING’s ESG risk profile.
Environmental and social risk (ESR) team
The environmental and social risk (ESR) team is a Wholesale Banking risk function that's part of ING's second
line of defence (the first line being the business itself). The ESR team performs an advisory role to support
the deal principals, senior credit officers, and approval authorities on individual transactions/engagements.
The degree of the ESR team engagement in transactions is dependent upon (i) the risk profile of the client,
project or business engagement, (ii) ING’s exposure, and (iii) the risks screened. In some locations, an ESR
delegated adviser may be appointed if mutually agreed by the head of ESR and regional head. Such a role
would support the senior credit officer (SCO), who would be responsible for ESR in the region.
The ESR function encompasses the following activities:
• Create and maintain policies for sensitive industry sectors;
• Assess transactions for environmental and social risk;
• Monitor high-risk clients to assess compliance with sustainability criteria;
• Spread ESR awareness throughout ING;
• Participate in European and global advisory groups (e.g. OECD advisory group, steering committee to the
Equator Principles, Thun Group of Banks) to help bring all banks to the same high standard.
Managing ESG risk
The ESG risk framework assists in managing ESG risk effectively through the application of the risk
management process at varying levels of the organisation. The risk management cycle describes the
processes by which ING can identify, assess, measure, mitigate and monitor ESG risk integrated within the
existing risk types.
ESG factors (the drivers of ESG risk) can lead to a negative financial and/or non-financial impact through a
variety of transmission channels. Transmission channels refer to the causal chains that explain how the
various risk drivers impact institutions through their own operations or business activities (see the figure
below).

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ING Bank Annual Report 2023 101
Risk identification
Managing ESG risks covers both physical risks (e.g. extreme weather events, soil degradation) and transition
risks (e.g. policy changes, shifts in market sentiment and consumer demand). The potential impacts that
physical and transition risks could have on households, businesses as well as on the macroeconomy can
translate into a range of financial risks for ING. The ESG risks can materialise through defaults of businesses
and households, increased volatility in equity and commodity markets, disruptions to banks' and customers'
operations, and litigation procedures. ING has identified the physical and transition risk transmission
channels for credit risk (for our Wholesale Banking, Business Banking, and mortgages portfolios separately),
market risk, operational risk, underwriting risk, compliance risk and liquidity risk.
Furthermore, the outcome of ING’s bank-wide risk identification and assessment process indicates that
climate risk is an emerging risk considering both its likelihood and impact. That means it has the potential to
significantly affect our performance but its impact on the organisation is more difficult to assess than other
risk drivers.
Risk measurement
ING measures its exposure to environmental risk by assessing and measuring risks through risk
quantification methodologies. The methodologies take into account qualitative and quantitative criteria and
different time horizons (short, medium and long-term). The definitions for short, medium and long-term
depend on the climate risk (physical or transition risk), the existing risk type (credit, market, operational,
compliance and liquidity) and the portfolio under consideration.
Quantification approaches for our Business Banking and Wholesale Banking portfolios include:
• Exposures towards companies excluded from EU Paris-aligned benchmarks;
• Exposures to the top-20 most carbon-intensive firms.
Quantification approaches for our immovable property portfolio include:
• Mapping of collateral values to physical risk hazards;
• Transition risk given the EPC label distribution of the portfolio.
Using various quantification approaches ING is able to identify and assess our material Environmental risks.
Different quantification approaches have been developed for the different business segments
Risk mitigation
The mitigation of the identified risks can be performed through several risk mitigating strategies, such as
reducing risk levels, avoiding risk, accepting risk or transferring the risk. The measures are embedded as part
of the updates of the existing policies and procedures in the different risk categories / risk types to mitigate
material ESG risk. Mitigation activities can be performed at a portfolio, client or transaction level and include,
but are not limited to:
• Engaging with high ESG risk counterparties to understand and support their mitigation plans. For
instance, the conditions that apply to loans based on the ESR outcome can play an important role in
helping clients improve their environmental and social performance, as well as ensuring their continued
compliance with our ESR policy;
• Setting the risk appetite statement (RAS) to limit the level of acceptable risks with consequence
management attached;
• Ensuring appropriate business continuity plans and insurance are in place to reduce the impact of more
frequent and severe weather events for both ING's own operations and business activities, thus reducing
the inherent risk.

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ING Bank Annual Report 2023 102
Risk appetite
We used the outcomes of the C&E risk heatmap exercise to introduce climate risk elements in the credit risk
appetite from 2022 onwards. In 2023, we continued with the monitoring mechanism which was established
for Wholesale Banking (WB) at the start of 2022, which limits growth of sub-sectors with a higher exposure
to C&E risks, while allowing for growth within the overall sector limit. In July 2022, this mechanism became
binding for WB sectors. For Business Banking (BB) sectors, a similar approach was used and the BB credit risk
appetite has been in a monitoring period since 2022. In addition, climate risk has been incorporated into the
2023 market risk banking book risk appetite, with the introduction of sensitivity metrics per climate risk
category.
Stress testing
ING’s climate stress-testing model leverages upon data gathered and models developed for the ECB Climate
Risk Stress Test, enhanced with internal climate risk stress test analysis. The risk coverage of the internal
climate risk stress test is the full credit portfolio reflecting both flood and transition risk. For transition risk, a
data-driven approach is developed to reflect the increase in the carbon price and therefore energy costs.
The analysis focuses on (i) energy performance certificate (EPC) level for mortgages and corporates secured
by real estate and (ii) NACE sector level for corporates not secured by real estate. For market risk, both the
banking and trading book are included. Other risks are covered as well, among others non-financial risk,
issuance risk, business risk, and model risk. The climate stress test shows a manageable impact on ING from
a financial perspective in the short-term as sufficient contingency measures are available to mitigate the
impact. The contractual maturity of ING’s financial assets including loans to business customers (Wholesale
Banking and Business Banking) is mostly short-term, except for loans to customers covered by immovable
property (Retail Banking residential mortgages). We have not analysed the potential impact for the medium
and long-term on ING’s capital position in ING’s climate stress test.
In addition, ING has developed the climate risk stress testing global procedure for ICAAP purposes to
formally integrate climate risk stress testing within the ING Group ICAAP stress-testing framework. Within
this document, guidance is provided on the minimum standards that need to be applied when climate risk
stress tests are developed, implemented, and executed. With these minimum standards, the ING Group
stress test framework has been extended with explicit requirements for ESG risk analyses. The document
currently focuses on physical risk and transition risk as these can be properly quantified within stress
testing. We aim to include other ESG risks later, and the same applies for the reflection of regulatory
requirements as this topic is still evolving
Risk monitoring
ESG risk information is reported on a periodic (at minimum annual) basis, to measure and monitor risk
exposure against the risk appetite and tolerance. Climate risk appetite is distributed on a monthly basis to
the MBB and senior management and reported quarterly via the management report to the GCTP. Physical
and transition risk results are reported semi-annually in ING Bank’s additional pillar III report. The ESG risk
dashboard is reported to the MBB semi-annually.
Managing ESG risk in practice
ING’s ESR framework helps us make informed choices about how, where and who we do business with. In
2023, the ESR framework was updated to reflect several (minor) amendments following the last
comprehensive review that took place in June 2021. Among the updates are a clarification on the self-
declaration approach used for Business Banking and a new restriction on dedicated upstream oil and gas
financing. The next comprehensive review of the ESR framework will take place in 2024. For more
information about ESR at ING, please refer to our corporate website.
The ESR framework includes standards and best practice guidance for ESR-sensitive sectors. It includes
explicit restrictions on activities not in line with ING’s values and harmful to people and/or the environment,
which we do not want to finance.
The way the ESR framework is applied in practice differs per product type and segment. The most significant
potential environmental and social impacts come from large corporates within our Wholesale Banking
segment. However, mid-corporate clients and small and medium sized companies (referred to as the
Business Banking segment) undergo a (basic) screening process too. Lastly, the ESR framework minimum
requirements are also included in ING’s procurement policy and apply to the screening of suppliers of ING’s
global procurement activities.
The ESR framework is incorporated in ING’s KYC policy framework, meaning that the ESR client assessment is
part of the regular client on-boarding and review process. Next to that, the ESR framework prescribes a
dedicated ESR transaction assessment for corporate clients that helps us identify the level of risk. The
combination of the ESR client and ESR transactional assessments provide us with the total ESR outcome. If
the total ESR outcome is high risk, the transaction requires an ESR assessment and advice from the
dedicated ESR team.
While we have a robust ESR framework and made progress in enhancing the automation of the checks and
controls in the ESR assessment processes, we acknowledge that we need to improve our processes around
the ESR Framework and its implementation. We see room for improvement to further ensure adequacy and
completeness of data necessary to steer, manage, evidence, and monitor these risks at the level of
granularity needed.
Of all WB engagements in scope of the ESR framework in 2023, 84 percent were considered ESR low-risk
(2022: 84 percent), 6 percent ESR medium-risk (2022: 7 percent) and 10 percent ESR high-risk (2022: 9
percent). ESR high-risk cases require specialized advice from the global ESR team. Beyond these high-risk
cases, the ESR-team is also consulted on other types of engagements, such as trade-related requests,

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ING Bank Annual Report 2023 103
medium-risk transactions and inquiries from the KYC department about the ESR client assessment.
Depending on the nature of the request, the ESR-team provides an advice on these cases too. The ESR
advice assesses the specific product offered and environmental and social impacts associated with it, the
sector, operating context and geography of the engagement and other relevant factors. Based on this in-
depth research, an advice is given. The ESR advice is binding (on its conditions or its negative conclusion) to
the relevant approval mandate holder for the underlying credit risk. If the applicable mandate holder
disagrees with the ESR advice, it can be escalated to the Global Credit Committee (GCC) for a final decision.
The GCC is the only body that can overrule the ESR advice. Of the 371 ESR advices given in 2023, 50 percent
were positive, 34 percent positive subject to conditions and 16 percent negative. Conditions included in an
ESR advice could play an important role in helping clients improve their environmental and social
performance and transitioning and ensuring their continued compliance with our ESR policy.
The ESR team mainly focuses on Wholesale Banking transaction advice, including (support for) engagement
around ESR with clients, in some specific cases. In 2023, ESR visited several projects around the world as part
of the due diligence and engagement process. In addition, the team works on a continuous improvement of
the ESR framework, to cater for developments in the environmental and social space. ESR acts as a sparring
and training partner for multiple internal teams, such as risk, front-office, KYC, and other teams, so that ESR
knowledge is improved and spread.

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ING Bank Annual Report 2023 104
Non-financial risk
Introduction
Non-financial risk (NFR) is defined as the risk of financial loss, legal or regulatory sanctions, or reputational
damage due to inadequate or failing internal processes, people and systems, a failure to comply with laws,
regulations and standards, or external events.
Governance
The global head of NFR is responsible for developing the framework of NFR policies and standards within ING,
and for monitoring the quality of non-financial risk management in the ING entities. In addition to the global
steering provided through the framework, the bank’s Non-Financial Risk Committee (NFRC), chaired by the
Group chief risk officer, is the highest level of the non-financial risk committees within ING, and is mandated
by the MBB to opine on and approve non-financial risk matters, to monitor or verify whether appropriate
action is taken by responsible management, and endorse the non-financial risk appetite.
Non-financial risk management
Risk categories
ING categorises non-financial risks in the following areas:
• Compliance risk is the risk of ING's integrity being impaired, which can result in reputational damage,
legal or regulatory sanctions, or financial loss, due to a failure (or perceived failure) to comply with
applicable laws, regulations and standards. See more in 'Compliance risk'.
• Information (technology) risk is the risk of financial loss, regulatory sanctions or reputational damage
due to breaches of confidentiality, integrity or availability of information or a lack of information quality
within business processes and/or the supporting IT systems.
• Continuity risk is the risk of financial loss, regulatory sanctions or reputational damage due to business
disruptions (loss of people, processes, systems, data, premises).
• Control risk is the risks of financial loss, regulatory sanctions or reputational damage due to ineffective
organisational structures and governance procedures (including unclear roles and responsibilities and
inadequate reporting structure).
• Processing risk is the risk of financial loss, regulatory sanctions or reputational damage due to failed
(transaction) processing (input, execution, output) or failing process management.
• Unauthorised activity risk is the risk of financial loss, regulatory sanctions or reputational damage due to
employees performing outside the normal course of their business, intentionally giving unauthorised
approvals or overstepping their authority.
• Personal and physical security risk is the risk of financial loss, regulatory sanctions or reputational
damage due to criminal and environmental threats that might endanger the security or safety of ING
personnel at work, people in ING locations, ING assets or assets entrusted to ING, people at ING event
locations, or might have an impact on ING organisation's confidentiality, integrity or availability.
• Employment practice risk is the risk of financial loss, regulatory sanctions or reputational damage due to
acts that are inconsistent with employment, health and/or safety laws, regulations or agreements, from
payment of personal injury claims, or from diversity/discrimination events.
• Sourcing risk is the risk of financial loss, regulatory sanctions and/or reputational damage resulting from
sourced activities (both IT and non-IT, including intra-group sourcing) not staying within ING’s risk
appetite and not being executed as agreed (with captives or partners), including non-compliance with
internal or external regulations.
• Fraud is the deliberate abuse of procedures, systems, assets, data, products and/or services of ING by
those who intend to deceitfully or unlawfully benefit themselves and/or others. This definition of fraud is
specified in the following two categories of fraud:
Internal fraud: acts of fraud that involve at least one internal party performed by or in collusion with an ING
employee or agent with the consequence of financial loss, regulatory fines, litigation loss, business
disruption and/or reputational damage for ING.
External fraud: acts of fraud or scams by individuals and/or parties excluding ING staff (including
contractors), with the consequence of financial loss, regulatory fines, litigation loss, business disruption and/
or reputational damage for ING.
Measurement approach
ING uses an internal model in line with the advanced measurement approach (AMA) to determine the
regulatory and economic capital amounts necessary to cover potential losses resulting from non-financial
risks. This model calculates the non-financial risk exposure by combining a forward-looking and a backward-
looking view on non-financial risk events. ING reports the outcome of its AMA model quarterly. The CRR3
regulation (relating to new EU banking rules from the European Commission), set to come into force in
January 2025, will usher in the Standardized Approach, replacing the current AMA model. As it prepares to
implement this non-model-based formula to calculate regulatory operational risk capital, ING is re-
designing the internal model it uses for economic capital and stress testing purposes (Pillar II).

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ING Bank Annual Report 2023 105
Main developments in 2023
Personal and physical security
The war in Ukraine continues to have a fundamental impact on the lives of our colleagues and their families,
and the way in which we conduct our Ukrainian operations. Yet the impact of the war on ING’s non-financial
risk profile and on operational event losses continues to be limited, thanks to an extensive set of mitigating
measures ING has taken since the start of the war.
In Türkiye, the earthquake in February 2023 had a major impact on the nearly 600 ING employees and their
families working and living in the affected area, especially in and around Kahramanmaraş. Tragically, five
employees lost their lives in the disaster and four were injured. One local branch was destroyed and three
seriously damaged. The operational centre was spared, and has served as a shelter for those employees
and their families left homeless. The swift and coordinated response by local staff and our head office in
Istanbul focused primarily on supplying aid for the local ING community, but also on retrieving assets from
the affected branches. Despite serious disruption to local processes due to damaged infrastructure, the
impact to the non-financial risk profile remained limited.
Political and social developments in many societies around the globe have led to further polarisation and
protests against governmental and public institutions, impacting the security risk profile of ING Bank and its
employees. Various environmental activist groups, e.g. Extinction Rebellion, have protested at ING Bank
head office buildings and local branches in the Netherlands, calling on ING to stop financing the fossil-fuel
sector. To keep employees and clients safe, and ensure the continuation of business processes, security
controls at ING locations around the world are frequently assessed.
Cybercrime and fraud
The further digitalisation of banking services, increasing electronic exchange of information via different
consumer channels, use of and dependency on third-party vendors for services, and the implementation of
PSD2 present ongoing cybercrime resilience, fraud management, and IT-security challenges for companies
in general, and financial institutions in particular. Both the frequency and the intensity of attacks continue
to increase on a global scale. They are becoming more sophisticated too, with the use of artificial
intelligence, and the implications of ransomware attacks are a concern in the threat landscape.
The continuous enhancement of the control environment to protect from, and detect and respond to, e-
banking fraud, distributed denial-of-service (DDoS), targeted attacks, and more specific ransomware attacks
is of ING's highest priority. Based on regular scenario analysis done in ING’s first line of defence, additional
tools and controls continue to be embedded in the organisation, as part of the overall internal control
framework, and we are continuously reassessing these against existing and new threats, as well as the
changing modus operandi.
The introduction of new products and evolving threats against those services, combined with developing
technologies such as generative AI and deep fake, are continuously presenting short- and medium term
fraud management challenges. Cybercriminals are becoming more resourceful in targeting financial and
sensitive (payment/personal) data, such as customer user credentials outside the traditional banking
environment. For example, criminals can obtain sensitive payment or personal data via social forums such
as WhatsApp, dark web shops, by screen scraping user credentials, or through third-party data breaches.
In 2023, these challenges increased, with more sophisticated phishing attempts, improved social-
engineering fraud attempts, and high volumes of scams through so-called authorised push-payment frauds.
This increase in scams is a major concern for financial institutions, with often devastating consequences for
customers. While financial institutions have limited means to prevent such authorised transactions, it is a
priority to help prevent this type of fraud.
With legislation such as EBA PSD2, which requires payment service providers to establish a framework with
appropriate mitigation measures and control mechanisms, and the continuing emphasis on duty of care,
financial institutions are becoming increasingly responsible for losses incurred by clients. Institutions are
also taking on more of the burden of reclaiming these losses. Developments as seen in the UK by regulatory
changes as well as the upcoming PSD3 requirements, which amends and modernises PSD2, will impact
banks more significantly in this area, dramatically increasing banks’ exposure.
In addition, economic pressures in many of ING’s operating countries could be a factor in pushing customers
into fraudulent activity. We notice attempts, impact, and ING's increasing fraud losses in credit facilities,
often carried out with forged documentation. ING continues to strengthen its fraud resilience by partnering
with peers in the financial industry, as well as law-enforcement authorities and governments. We believe a
collaborative approach with other industries is the only way to tackle fraud effectively. ING’s global fraud
management team brings together skilled fraud-management experts from various domains, and is
responsible for making sure that ING's business and fraud strategy remains aligned on fraud threats, market
best practices, applicable law and legislation, risk appetite and operational targets.
Data risk management
Data, whether customer, financial, risk or other business – is core to ING’s purpose. Data leads to insights
and insights empower people to stay a step ahead in life, and in business. In 2023, ING’s Data Management
team worked to speed up how quickly we execute our data strategy, to ensure data quality, keep data safe
and secure, improve our data literacy, and simplify our data functions. This should enable and support
steering to right actions regarding data, including personal data protection, data security, data quality and
data ethics. Addressing emerging risks such as AI, most specifically generative AI, and societal concerns
around the ethical handling of customer data, are top priorities for ING.

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ING Bank Annual Report 2023 106
Identity and access management (IAM)
IAM remains one of the focus areas of ING. It’s an important element in our control framework for
preventing and mitigating the risk of unauthorised access to IT systems, and the data processed and stored
in these systems. This is done by enforcing IAM global processes and controls, which are periodically
reviewed and tested. These processes and controls are supported by technologies, tooling, and practices
managed by a dedicated IAM team in the Chief Information Security Office (CISO). The team focuses on
identifying improvements to address developments both inside and outside ING. In 2023, ING continued the
activities to improve in this area, with specific attention given to the further implementation of supporting
tooling, the standardisation and harmonisation of processes and workflows, and automation of IAM
controls. In 2023, ING identified areas for improvements, with specific attention given to the further
implementation of supporting tooling, the standardisation and harmonisation of processes and workflows,
and automation of IAM controls.
Operational resilience
Providing safe, secure and seamless services is at the heart of ING's strategy. Preventing disruptions and
ensuring a quick recovery from disruptions is an important element of that. In 2023, ING made further
progress with implementing its operational resilience framework. As part of this implementation, we are
mapping processes underlying our most critical business services. This includes the facilities, people, third-
and intragroup parties, data and technology that support those processes. These processes are then tested
against severe but plausible scenarios in an effort to identify weaknesses. This helps ING identify
opportunities to enhance its operational resilience. In addition, ING has started with the implementation of
the Digital Operational Resilience Act (DORA), which aims to further strengthen the digital operational
resilience of financial institutions.

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ING Bank Annual Report 2023 107
Compliance risk
Introduction
Compliance risk is defined as a threat posed to ING’s standing resulting from failure to act in line with
applicable laws and regulations, internal rules (including ING’s Orange Code and global Code of Conduct),
and/or societal expectations that apply to the bank's services and activities. A failure to adequately mitigate
compliance risk may lead to damage to ING’s reputation and/or legal/regulatory sanctions and/or financial
loss.
The mission of Compliance is to support ING in conducting its business activities in line with applicable laws
and regulations, taking into account ING’s internal code of conduct and societal expectations. Compliance
wants to drive compliance risk management by desire and design throughout the organisation, unleashing
the power of our data, risk expertise, and ING's workforce to keep the bank safe and sound, and help drive
new and sustainable ways of doing business.
Within ING, compliance risks are defined as those risks that are within the scope of the ING Compliance Risk
Catalogue. The following risk categories apply:
• Financial crime risk refers to the risks of the bank’s products and services being abused for illicit purpose
generating or disguising financial and/or economic crimes (FEC).
• Conduct risk refers to the compliance risks arising from potential or perceived misconduct by ING or its
employees towards its customers, market integrity, business partners, employees, and other
stakeholders including society at large.
• Organisational risk refers to the compliance risks arising from actual, potential or perceived flaws in the
way that ING is organised and structured including its regulatory and reporting framework.
• Data protection (personal data protection, data retention) risk refers to the personal data protection risk
of financial loss, (regulatory fines, reputational damage) due to not protecting the personal data rights of
individuals as required, and as to data retention risk, to having the records being destroyed too soon or
retained too long.
ESG-related compliance risks have been added as a new risk driver in the compliance risk catalogue. This is
taking place in close collaboration with internal stakeholders to make sure that roles and responsibilities
with regard to identifying, assessing, managing, and overseeing these risks are in line with ING's
organisation globally.
Governance
The Compliance organisation is part of ING’s second line of defence, where Group Compliance sets the
methodologies and minimum standards for the bank. Compliance for the business lines Wholesale Banking,
and Retail Banking / Rest of World together with Compliance in the Market Leaders countries and functional
lines in the countries along with relevant stakeholders from the first line of defence are responsible for the
execution of these standards, within the risk appetite set.
Compliance is tasked with instructing, advising, challenging and overseeing the first line of defence in how
they manage risks that are within the scope of the ING Compliance Risk Catalogue. Compliance also has an
active role in raising awareness (via training and communication), influencing and stimulating a sound
compliance risk culture. The risks in scope of the Compliance Risk Catalogue are outlined in the ING
Compliance Charter.
Compliance is headed by the chief compliance officer (CCO), who reports directly to the CRO. The CCO has
direct access to the Risk Committee of the Supervisory Board. The CCO and the chairperson of the Risk
Committee had regular bilateral consultations in 2023.
OneCompliance strategy
As a global bank in a fast-changing world we want to do the right thing to be safe, secure and compliant for
our customers and for society. We achieve this by living up to our OneCompliance strategy.
The OneCompliance strategy is a multi-year, global compliance strategy based on the Compliance Risk
Management Cycle, a framework that aims to help ING manage compliance risks consistently across the
organisation. In 2023, we further strengthened the operations of the Compliance Risk Management Cycle.
This resulted in improved processes around risk coverage and controls. At the same time in intuitive,
actionable and insightful management information with a global dashboard in place to take smart decisions
and keep oversight on both steering within risk appetite and on our global direction. As we operate in a
dynamic and challenging environment, we are continuously learning and improving while reaching a more
sustainable and mature level within the Compliance function.
Know your customer (KYC)
Know your customer and financial crime compliance continue to play a major role in making sure we only
engage and do business with people and entities that meet regulatory requirements. Knowing who we do
business with is vital to keeping ING safe, secure, and compliant. As part of our ongoing anti-money
laundering efforts, we continuously assess relationships with customers, and monitor and screen
transactions. It is our policy to review potentially unusual transactions and suspicious transactions and,
where applicable, report these to the relevant authorities.

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ING Bank Annual Report 2023 108
We are continuously working to further strengthen the KYC processes across the bank as and where
required. This includes enhancing customer due diligence files and making structural improvements in
frameworks, processes, and systems.
Global approach
ING takes a global approach in its KYC improvement activities. In 2023, we continued substituting local
technology with global technologies, completing the migration of transaction monitoring to the Global
Transaction Monitoring tooling and taking further steps in enhancing use of the global screening application.
We made further progress in migrating or moving KYC-related activities from local processing units to our
dedicated operational hubs, which offer dedicated expertise and processing capabilities. In 2023, we further
defined and refined the global way of working for the Customer Due Diligence (CDD), which enhances
effectiveness and efficiency, and aim to implement this in all processing hubs and other ING locations.
KYC policy framework
The KYC policy and related control standards (the KYC policy framework) set the minimum requirements
and control objectives for all ING entities to guard against involvement in financial crime activity. The
framework reflects relevant national and international laws, regulations, guidance documents, and
guidelines from national, European and international authorities, (supra)national risk assessments, and
industry standards. The framework is updated regularly with subsequent implementations at global scale.
Knowledge and behaviour
We believe all our people play a role in protecting our customers, the bank, and society against financial
crime and fraud. A sound risk culture requires us to act with integrity above all. We want to empower our
workforce with the skills and knowledge they need to fight financial crime, and encourage them to speak up
if they have concerns around managing financial crime risk.
As in previous years, we ran our (mandatory) training programme for KYC staff. This included continuing our
partnership with the Association of Certified Anti-Money Laundering Specialists (ACAMS), to develop and
provide tailored, certified training. The ACAMS training portfolio focuses on learning paths that provide
professional foundational skills or advanced expertise in a range of topics, including customer due diligence,
screening, transaction monitoring, and sanctions. New joiners at ING KYC departments complete a
combination of ACAMS and ING internal courses aimed at ensuring their knowledge and skills are up to
scratch. We updated our internal training programme following a yearly learning need analysis. In 2023, we
included product-specific courses on top of the training focusing on strengthening the risk-management
mindset.
Financial crime risk
Financial crime risk management aims to ensure that new and relevant financial crime trends and insights
as well as regulatory requirements are identified, tracked and actioned in a timely manner. In terms of
governance, the bank's NFRC, chaired by ING’s CRO, is the principal risk management forum where among
others, financial crime risks are discussed. This committee reviews and escalates, where appropriate, key
financial crime topics, threats and risks across ING to the Executive Board and Management Board Banking.
On KYC, the Global KYC Committee, chaired by ING's COO, is mandated by the MBB to steer, prioritise and
approve KYC-related topics undertaken across ING, and to oversee compliance with the relevant laws and
regulations and internal rules related to KYC. The day-to-day responsibility for the oversight of ING’s
compliance with our legal and regulatory obligations, in relation to financial crime risks, sits with the global
head of Financial Crime Compliance. This global head reports to ING’s chief compliance officer, with
oversight by the CRO.
We believe all our people have a key role to play in the fight against financial crime. Having a robust and
sound risk culture embedded in our day-to-day way of working is a foundational element of our financial
crime risk control environment. We define the accountabilities and responsibilities of our workforce in
accordance with the three-lines-of-defence model, considering our business, geographical and functional
structure.
As an organisation, we’re committed to meeting our legal and regulatory requirements and the standards
we also expect from ourselves. ING remains subject to (regulatory) investigations and scrutiny in certain
jurisdictions, and we’re committed to executing and implementing the identified enhancements required in
our wider Enhancement Programme (EP) and our financial crime risk framework in a sustainable way for the
longer-term.
Key risk management processes
ING strives to play its part in contributing to the safeguarding of the financial system against illicit financial
activity, in the context of heightened and changing regulatory expectations, and as financial crime risks
continue to evolve. To live up to our role as a global financial institution in combatting financial crime, we
believe it is essential to comply with anti-money laundering and counter-terrorism financing (AML/CTF) laws
and regulations, establish a reasonable and risk-based control framework to mitigate financial crime risk,
and to seek to provide useful information to relevant government agencies. We also believe it is important
to respond swiftly and proactively to new financial crime threats and techniques as well as relevant media
reporting.
To mitigate financial crime risks, we apply a framework of preventative and detective systems and controls,
underpinned by policy, procedures and related control standards across our global business in all locations
where we operate. In 2023, we remained focused on maturing our Financial Economic Crime Controls in the
context of the Enhancement Programme (EP) by continuing to strengthen our financial crime risk

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ING Bank Annual Report 2023 109
management framework and supporting sustainable remediation of known issues. At the same time, we
acknowledged that the continuous maturing of the financial crime risk management framework, as well as
other developments such as regulatory and legislative changes, continued to require our attention and
commitment as the bank focused on operational effectiveness (OE). Through robust oversight and challenge
as the second line of defence, it is our goal to ensure that OE is demonstrably sustainable.
In line with ING’s ambition to have a more data-driven, dynamic, and forward-looking systematic integrity
risk analysis (SIRA), in 2023 the SIRA introduced enhancements to the existing process and piloted a
proposed methodology. This will contribute to further enhanced insights into the financial crime integrity
risks ING may be exposed to. These developments improve the risk identification, reporting quality, and
management of these risks in accordance with our risk appetite across our global footprint.
Bribery and corruption
Bribery and corruption undermine business confidence and corporate integrity, hinders fair business
competition, and harms international trade. ING takes these risks seriously: bribery and corruption risks are
part of our non-financial risk framework and are in the design of our client and third-party due diligence,
and monitoring measures in our financial crime risk management framework. We have continued to
strengthen our ability to respond to bribery and corruption risks in key areas as part of our multi-year
maturity programme. This supports our zero-tolerance approach to bribery and corruption, meeting the
governance elements of our sustainability objectives.
Customer tax compliance
Compliance with customer tax-related regulations and reporting, obligations, under the Foreign Account Tax
Compliance Act (FATCA), the Common Reporting Standard (CRS), and Mandatory Disclosure Rules, aims to
ensure that ING is not involved in facilitating tax-related financial crime, such as tax evasion or aggressive
tax-avoidance schemes, on behalf of its customers. These obligations and customer tax integrity are of
utmost importance to ING. In 2023, we continued to mature its control framework and to improve the
quality of our reporting to tax authorities. We also remain proactive to legislative developments and aim at
timely preparation for new reporting obligations, such as those introduced by the 2024 Central Electronic
System of Payment Information (CESOP) regulation.
Sanctions
Russia’s invasion of Ukraine in 2022 fundamentally changed the global political landscape. It sparked a
worldwide response, with significant sanctions packages imposed against Russia and Belarus. In 2023, global
sanctions regimes have been increasingly active, creating a complex regulatory and legislative
environment. And an intensive focus on sanctions worldwide is expected to continue in coming years. This
has also led to an increasing focus of the EU, US, and other governments on the potential circumvention of
sanctions against Russia, and the roles of third countries and companies in facilitating any circumvention or
undermining the sanctions’ measures. Within the EU, there has been particular focus on the risk that some
EU-based businesses may be seeking to circumvent sanctions by exporting illicit goods, such as computer
products and electronics, to Russia via third countries. This has prompted a concerted effort by governments
to impose pressure on companies operating in these jurisdictions, and to stop the sanctions measures from
being sidestepped by targeted Russian parties.
The proliferation of sanctions has contributed to increased efforts in ensuring ING’s control framework
remains robust to mitigate against the bank’s sanctions risks. This has included applying greater scrutiny to
transactions alerted for heightened risk of non-compliance with applicable sanctions, as well as efforts
aimed at ensuring employees and customers are aware of the sanctions and potential circumvention risks.
Leveraging intelligence and internal data, work has also been completed to better understand the risks
associated with the export of illicit goods from the EU to Russia via third countries, and ING’s potential
exposure to the threat scenario.
ING’s policy generally prohibits relationships or transactions involving sanctioned persons and entities or
comprehensively sanctioned countries, territories and their governments. It sometimes also means that
ING’s risk appetite may be stricter than legal obligations, and we may choose not to support certain
customer relationships, business activities and transactions even if permitted by law. As a result of frequent
evaluation of the business from economic, strategic and risk-based perspectives, ING, with limited exception,
does not engage in business involving certain countries, including Cuba, Iran, North Korea, Sudan, Syria and
the Crimea region. ING has a policy not to enter into new relationships with clients from these countries and
processes are in place to discontinue existing relationships involving these countries.
Evolving financial crime landscape
Financial crime continues to evolve, whether through technology, new and sophisticated techniques used
by serious and organised criminals, or the results of geopolitical events. The pandemic and associated social
changes drove the unprecedented expansion of online and digital services. This in turn has prompted a
surge in technological developments and cyber-enabled financial crime. This widespread digitalisation of
the economy and artificial intelligence (AI) is leading to a reshaping of previously fixed ideas about methods
used to launder and finance terrorism. Criminal groups have been quick to adopt and misuse new
technologies, and are already harnessing the power of machine learning, AI, and anonymity-enhancing
technologies, such as virtual currencies and mixers, to commit criminal activities. Such developments also
enable criminal networks to become more agile, geographically interconnected and cohesive, using the new
tools and techniques to circumvent enhanced AML frameworks.
ING takes these threats seriously and believes in responding proactively to such developments. We invest in
new and innovative technological capabilities, and continue to enhance our cooperation with law-
enforcement agencies, industry bodies and regulators, and to develop intelligence and data-led
collaborative solutions to detect and disrupt financial crime. In this context, this may at times include

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ING Bank Annual Report 2023 110
sharing information within ING to manage our financial crime risk exposure, in line with General Data
Protection Regulation requirements and local privacy laws and regulations.
Crimes against society
Society’s expectations with regard to financial institutions' accountability for safeguarding the integrity of
the financial system have also created an increasingly demanding environment. ING recognises that
financial crimes have an adverse impact on individuals, communities, and the environment where they
occur. We are committed to conducting our global activities with integrity, and in line with our ethical and
social responsibilities. Geopolitical events and economic instability have contributed to rising inflation and
the cost-of-living crisis, leaving individuals and businesses vulnerable to criminal exploitation, such as
trafficking and corruption.
Labour and sexual exploitation remain the most common forms of human trafficking globally, and recent
geopolitical events will also have an impact on the nature and scale of the human trafficking threat. The
humanitarian crisis caused by Russia’s war in Ukraine has led to increased numbers of women with children
being trafficked. Mostly refugees, they are at higher risk of exploitation. Looking ahead, it is possible that
existing and future global events will lead to the migration of even more people. In 2023, knowledge on the
financial crime risks posed to financial institutions by illegal migration and adult sexual exploitation were
shared across ING through the KYC Academy’s online learning channel. ING is also participating in the
human trafficking working group being run by Europol’s Financial Intelligence Public Private Partnership.
Environmental crime is among the most profitable criminal enterprises and covers a wide range of unlawful
activities, including the illegal wildlife trade, the illegal extraction and trade of forestry and natural
resources, illegal waste and illegal fisheries crime. As well as interface with other crime types, including
corruption, trade-based fraud and human trafficking, there is also a convergence between environmental
crime and ESG. In 2023, ING continued with our membership of the United for Wildlife Financial Taskforce,
and with the United Nations working group on forestry crime, working with private, public and third sector
partners to detect illegal crimes in the wildlife and forestry trade.
EU AML/CFT legislative package
In mid-2021, the European Commission (EC) adopted a package of legislative proposals aimed at
strengthening anti-money laundering (AML) and counter-terrorism financing (CTF) rules. Although the
proposals are yet to be finalised, ING welcomes this harmonisation, which removes a degree of regulatory
complexity. ING has actively participated in workstreams and analyses prepared by banking associations
such as the Dutch Banking Association (NVB) and the European Banking Federations to assist us in assessing
the potential impact of the AML legislative package on the bank.
In September 2022, the Dutch Central Bank (DNB) published its report ‘From Recovery to Balance’ on the use
of risk-based approaches. Since then, ING has actively participated in roundtable workshops organised by
the NVB, which resulted in the creation of multiple ‘Industry Baselines’ on topics such as enhanced due
diligence (EDD) measures for European Commission (EC) high-risk third countries, and ongoing due diligence
on certain customer types. ING is in favour of these new baselines. They are a necessary step towards
fighting financial crime through the enhanced application of a risk-based approach (RBA): focusing efforts
on higher risks, while remaining within the boundaries of the applicable laws and regulations.
Public-private partnerships
To continue to be more effective in our effort to counter financial economic crime, we work closely with our
peers, regulators and law enforcement. This collaboration is of importance to ING. It is most visible through
our involvement in public private partnerships (PPPs) in our major markets, but also at an international level
– through our Group-level participation in networks such as Europol’s Financial Intelligence Public Private
Partnership. We recognise that our controls and risk management frameworks benefit from having a direct
dialogue with public partners as well as complementing our understanding of relevant and evolving financial
crime threats and risks. Sharing and applying these insights across the organisation helps us move beyond
technical compliance and enhances our ability to meet regulatory obligations and protect our customers.
In 2023, ING in the Netherlands continued working with the Financial Expertise Center and Fintell Alliance,
consisting of Dutch government agencies and three peer banks. Focused on priorities set there, we also
continued our involvement in Transaction Monitoring Netherlands (TMNL), where a consortium of Dutch
banks work on developing combined transaction monitoring. Both initiatives increase our understanding of
potential criminal modus operandi and money flows. Based on these insights, we can work more efficiently
and enhance our control framework. ING continues to be a part of the Anti-Financial Crime Alliance in
Germany.
Conduct compliance and ethics
Conduct compliance is the compliance risk that covers risks arising from potential or perceived misconduct
by ING or its employees towards its customers, market integrity, business partners, employees, and other
stakeholders. It includes customer protection and transparency (treating customers fairly), market conduct
(including market manipulation), anti-competitive conduct, conflicts of interest and ethics. Ethics risk
includes the Orange Code, Global Code of Conduct, as well as our whistleblower framework.
Treating customers fairly
As part of a further movement to align the global management of unfair customer treatment risk – already
aligned for the Markets in Financial Instruments Directive (MiFID) and the Insurance Distribution Directive
(IDD) products and based on local implementation for other products – we have launched an important
enhancement by creating the customer centricity policy (CCP), which was approved in July 2023. By setting
globally aligned standards based on the ING-aligned view on customer centricity, keeping the Orange Code
and Global Code of Conduct in mind, we now have standard global norms and risk management across all

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jurisdictions, client segments and products. The level of customer protection is determined on the level of
client sophistication and related risks, with the highest level of protection for retail customers.
We aim to implement in 2024, when the global standards are tested against local legal requirements. We
anticipate, despite the standardisation, significant local differences in implementation due to the absence of
EU-wide aligned standards for some products, such as retail mortgages, while there will be more alignment
in others, like financial instruments due to the MiFID. The changes also allow further simplification of
governance with the client protection and product approval committee (CPAC) now expanding its
responsibilities across all aspects of investments services, including advice/suitability.
Alongside the internally focused changes, the Sustainable Finance Disclosure Regulation (SFDR) has been
fully implemented. Further preparation is being done for activities relating to the EU retail investment
strategy as proposed by the EC, through which feedback is being shared to both industry and regulatory
bodies on, in our view, the best way to achieve the aim of the EC: an increased use of the EU Capital Markets
by its inhabitants. In addition, the implementation of the changes to the European Market Infrastructure
Regulation (EMIR) refit are ongoing.
An important area of focus is the management of compliance-related ESG risks. Greenwashing is a
significant risk, related to different aspects and potential root causes – ranging from outings, strategic
choices, or individual transactions. With the introduction of greenwashing prevention guidelines, based on
ING standards, external events, as well as regulatory guidance, the organisation is enhancing the
incorporation of greenwashing risk considerations in the way of doing business. Given that the
greenwashing definitions and risk management practices, as well as the regulatory framework, is still in
development we do expect significant changes going forward until market and society expectations are set.
In addition, further effort is made to mature the role of Compliance alongside the other risk domains in
relation to ESG risk management.
Market conduct
Market conduct risk stems from behaviour that can impact market integrity. As part of our work in 2022 to
strengthen our market conduct framework, global procedures on maintaining information barriers, insider
lists and communicating inside information were further improved across ING. In 2023, additional steps
have been made towards automating, standardising, and centralising our approach to personal account
dealing rules across the group. Furthermore, this year two new e-learnings have been designed on inside
information and detecting suspicious orders and transactions, with one already rolled out to targeted
employees.
Conflicts of interest
ING, being a large financial institution, is prone to multiple conflicts of interest, due to overlapping interests
of different stakeholders as businesses, employees, customers, shareholders, and society. ING has a policy
that aims to help to identify, assess, manage and mitigate or prevent (potential) conflicts of interest. It
maintains a global register of structural conflicts of interest with respective risk assessment and mitigating
measures in place.
Anti-competitive conduct
Competition law impacts all areas of ING's business. It is ING's policy to adhere to laws and regulations that
promote the functioning of markets and fair competition. In 2023, we revised the competition policy,
including related framework documents. It is aligned with the EBA guidelines on internal governance, setting
out principles on acceptable and unacceptable behaviours linked, in particular, to anti-trust practices. The
updated policy will come into effect in 2024.
Whistleblower
Further enhancements and standardisation to the whistleblower process are being made with the aim of
protecting the reporters of concerns, either through protection of identity, and/or by trying to prevent any
form of retaliation taking place. A global speak up programme is in place to harmonise the speak up
channels for undesirable behaviour. It aims to support reporters in choosing the appropriate channel,
ensuring a consistent reporter journey with the same levels of protection. Insights collection across certain
channels started to provide management anonymised oversight on the concerns raised, as well as
measuring follow-up on concerns that are found to be substantiated. If required, we continue to share
sanitised reports with the organisation to promote employees to speak up.
Data protection
ING is bound by European level and local data protection laws, which can differ from country to country. We
have a group-wide personal data protection policy, which aims to enable a consistent approach to our way
of processing personal data. This policy is implemented globally by all ING business entities and support
functions. In addition, we have implemented binding corporate rules within ING with the aim of ensuring
appropriate safeguards for our internal data transfers. Our approach can be summarised as `the right
people use the right data for the right purpose`.
Personal data
In line with the EU’s General Data Protection Regulation (GDPR) and other applicable data protection
requirements, we aim to process personal data for a specified business purpose in a fair and lawful manner,
observing the rights and liberties of data subjects in scope of our activities. We aim to perform data
protection impact assessments (DPIAs) and regular internal audits on the personal data processing that we
do for clients and employees, including ING’s technologies. Our staff is regularly trained on data protection,
both globally and locally, through training and awareness initiatives, for both general and targeted
audiences.

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> Compliance risk
ING Bank Annual Report 2023 112
We strive to be transparent about what we do with the personal data of customers, employees, suppliers
and business partners, who we share personal data with and why. Our business entities, support functions,
as well as third parties that we engage with, must ensure that the data subject is granted a level of
protection equivalent to that guaranteed by the GDPR, especially if personal data is transferred outside of
the European economic area (EEA). Part of the data protection scope is that personal data is managed in a
safe and secure manner, in line with current information security standards. More information can be found
in the privacy statement on our website (https://www.ing.com/Privacy-Statement.htm).
Data Protection Compliance department
In 2023, we established a new Data Protection Compliance department (DPC) within Group Compliance. This
combined second-line-of defence data protection responsibilities – previously split between Legal and
Compliance departments – into one team, leading to a solidified and empowered function. The Bank DPO
leads this team, reports to the CCO and has direct management board access. The DPC model is replicated
in ING’s local entities. The DPC team advises, challenges, and monitors that ING fulfils its GDPR and other
relevant obligations towards customers, employees, suppliers, and business partners with the aim of
keeping and processing (personal) data in a safe, compliant, and ethical manner. In the first line of defence,
a data protection executive is appointed who is accountable for data protection risk as well as the execution
of our data protection policy and standards. This executive has ultimate responsibility for the processing of
personal data in its ING entity and is supported by a data protection executive office.
Education
In 2023, to keep our staff informed and to increase awareness on compliance risks, we provided ING staff
worldwide with mandatory trainings on financial crime, including tax evasion and aggressive tax avoidance,
culture and ethics and data protection.

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> Compliance risk
ING Bank Annual Report 2023 113
Model risk
Introduction
Model risk is the risk that the financial or reputational position of ING is negatively impacted as a
consequence of the use of models. Model risk can arise from errors in the development, implementation,
use or interpretation of models, or from incomplete or wrong data etc., leading to inaccurate, non-
compliant or misinterpreted model outputs.
A model is defined as a quantitative method, system, or approach that applies statistical, economic,
financial or mathematical theories, techniques and assumptions to process input data into quantitative
estimates or whose inputs are partially or wholly qualitative or based on expert judgement.
Governance
The head of Model Risk Management (MoRM) reports to the ING chief risk officer. The Model Risk
Management Committee (MoRMC) is the dedicated authority within ING for model risk management. It is a
committee designated by the MBB and is chaired by the ING chief risk officer and vice-chaired by the head
of MoRM.
Model lines of defence
ING’s model risk and control structure is based on the three-model-lines-of-defence (MLoD) approach. This
approach aims to provide a sound governance framework for model risk management by defining and
implementing three different management layers with distinct roles and oversight responsibilities.
The composition and main activities within the three model lines of defence (MLoD):
• The first MLoD is composed of the model owners, model users, data management and model
development, and is accountable for the implementation of model risk controls which encompass model
development, implementation, and use of the models as well as monitoring of models’ performance.
• The second MLoD is composed of model validation and model risk oversight, which owns the model risk
management framework, proposes the model risk appetite, provides challenge to model risk
identification, and assessment and provides an independent validation of models used within ING.
• The third MLoD is the internal audit, reviewing the quality of model risk management execution in all
lines of defence and providing assurance over the first and second-line model risk management
activities.

Model risk appetite (model RAS)
The model risk appetite is designed to determine the level of model risk ING is willing to accept in pursuit of
its strategic objectives. Current model RAS metrics are focused on the most important models for ING: credit
risk and other models with elevated supervisory attention. These metrics are reported to the MBB monthly.

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> Model risk
ING Bank Annual Report 2023 114
Model risk management (MoRM)
The MoRM policy framework comprises the total set of measures and tools put in place to manage model
risk. To enable setting model risk management standards that are proportionate to a model’s importance,
ING classifies models based on their materiality and reputational risk. The classification determines the
depth and extent of the applied model risk management activities, including model validation. Next to the
generic MoRM policy framework, dedicated model validation procedures are in place. These set the
validation standards for the key model types such as credit, market, liquidity, operational risk, IRRBB, KYC,
and other model categories. These procedures are continuously being enhanced to keep up to date with
regulatory, technical developments and industry trends.
On an aggregated level, model risk is monitored via analysis of data from the global model inventory,
collected across the bank to manage ING model's landscape. Insights are reported to the MoRMC and MBB,
so senior management can take well-informed decisions on acceptance or further mitigation of model risk.
Model lifecycle
The next figure provides a schematic overview of the model lifecycle, where orange represents the activities
of the first MLoD, grey represents the second MLoD and light grey is the third MLoD. The objectives of the
different processes are outlined below.
Initiation or change: The initiation of the development of a new model or change in an existing model can
be triggered by internal or external factors, such as business needs, regulation changes, new technologies,
and/or model validation findings.
Data collection is the process of defining and collecting data that meets the requirements for model
development. The process includes the definition of the data needed and assessment of data availability
and data quality.
Model development is a structured process that leads to a model that is consistent with the model owner
requirements, bank policy and relevant regulation where applicable.
Pre-approval validation is an independent assessment to determine whether a newly developed or
materially changed model is valid for its intended use. The approach to model validation is proportional to
the model risk and potential model risk as reflected in the ING model risk classification.
The objective of the model approval stage is to ensure models are formally approved by the designated
approval authority prior to deployment.
During the implementation stage, the model is deployed in a production environment, after completion of
required model testing and corresponding approval.
In the model use stage, the model is applied by the users for the specific purpose for which it was designed.
The model may only be used after formal approval.
The objective of model monitoring is to determine if the model is performing as expected by regularly
assessing model accuracy and/or predictive ability, considering internal or external developments that may
influence model performance. Model performance monitoring begins when a model is deployed for use, and
continues until the model has officially been decommissioned.
Periodic validation independently assesses, on a regular basis, whether a model is still valid for its intended
use, taking into consideration any internal or external changes since the last validation. The frequency of
periodic validation depends on the model risk, model type and applicable regulation.
A model that is/will no longer be used must be decommissioned.

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> Model risk
ING Bank Annual Report 2023 115
Business risk
Introduction
Business risk for ING has been defined as the exposure to value loss due to fluctuations in volumes/margins,
net fee and commission income, as well as expenses. It is the risk inherent to strategy decisions, internal
efficiency and the business environment. Business risk economic capital is calculated via the variance-
covariance methodology for these risks. This covers the risk that volume/margins, net fee and commission
income, operating expenses, and regulatory expenses/costs will deviate from the expected expenses and
incomes over the horizon of the relevant activities.
Governance and risk management
ING applies an explicit risk appetite statement regarding business risk, focusing on earnings stability and
diversification of the business mix. Diversification reduces the risk that volumes and/or margins will suddenly
drop due to unexpected changes in the business environment for certain markets and products. In addition,
the underlying risk types (expense risk, volume-margin risk, net fee and commission income risk, and
regulatory costs) are mitigated and managed differently. Expense risk is monitored and managed via the
financial performance of the bank and the local units. Through this process, the reported expense numbers
are compared quarterly with the projected cost/income ratio. Deviations from this ambition are monitored
as part of the financial projections discussed continuously within different parts of the organisation.

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> Business risk
ING Bank Annual Report 2023 116
Contents
Consolidated financial statements

Consolidated statement of financial position | 119
Consolidated statement of profit or loss | 120
Consolidated statement of comprehensive income | 121
Consolidated statement of changes in equity | 122
Consolidated statement of cash flows | 125

Notes to the consolidated financial statements

1 | Basis of preparation and material accounting policy information | 127

Notes to the consolidated statement of financial position

2 | Cash and balances with central banks | 145
3 | Loans and advances to banks | 145
4 | Financial assets at fair value through profit or loss | 145
5 | Financial assets at fair value through other comprehensive income | 147
6 | Debt securities | 148
7 | Loans and advances to customers | 149
8 | Investments in associates and joint ventures | 150
9 | Property and equipment | 151
10 | Intangible assets | 151
11 | Other assets | 152
12 | Deposits from banks | 153
13 | Customer deposits | 153
14 | Financial liabilities at fair value through profit or loss | 153
15 | Provisions | 154
16 | Other liabilities | 155

17 | Debt securities in issue | 156
18 | Subordinated loans | 156
19 | Equity | 157

Notes to the consolidated statement of profit or loss

20 | Net interest income | 160
21 | Net fee and commission income | 161
22 | Valuation results and net trading income | 161
23 | Investment income | 162
24 | Other net income | 162
25 | Staff expenses | 163
26 | Other operating expenses | 164

Segment reporting

27 | Segments | 164
28 | Information on geographical areas | 168

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ING Bank Annual Report 2023 117
Additional notes to the consolidated financial statements

29 | Changes in liabilities arising from financing activities | 171
30 | Pension and other post-employment benefits | 172
31 | Taxation | 175
32 | Fair value of assets and liabilities | 177
33 | Derivatives and hedge accounting | 188
34 | Assets by contractual maturity | 195
35 | Liabilities and off-balance sheet commitments by maturity | 197
36 | Transfer of financial assets, assets pledged and received as collateral | 200
37 | Offsetting financial assets and liabilities | 201
38 | Contingent liabilities and commitments | 206
39 | Legal proceedings | 206
40 | Consolidated companies and businesses acquired and divested | 209
41 | Principal subsidiaries, investments in associates and joint ventures | 209
42 | Structured entities | 210
43 | Related parties | 212
44 | Capital management | 214
45 | Subsequent events | 216

Parent company financial statements

Parent company statement of financial position | 218 |
Parent company statement of profit or loss | 219 |
Parent company statement of changes in equity | 220 |
Notes to the parent company financial statements | 222 |

Other information and appendices

Independent auditor’s report | 239 |
Articles of Association – Appropriation of results | 247 |
Risk factors | 248 |

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ING Bank Annual Report 2023 118
Consolidated statement of financial position
As at 31 December

in EUR million | 2023 | 2022 |  |  | 2023 | 2022
Assets |  |  |  | Liabilities |  |
Cash and balances with central banks 2 | 90,214 | 87,614 |  | Deposits from banks 12 | 23,257 | 56,632
Loans and advances to banks 3 | 16,708 | 35,103 |  | Customer deposits 13 | 702,217 | 686,341
Financial assets at fair value through profit or loss 4,6 |  |  |  | Financial liabilities at fair value through profit or loss 14 |  |
– Trading assets | 60,240 | 56,875 |  | – Trading liabilities | 37,220 | 39,088
– Non-trading derivatives | 2,028 | 3,893 |  | – Non-trading derivatives | 2,019 | 3,048
– Designated as at fair value through profit or loss | 5,775 | 6,159 |  | – Designated as at fair value through profit or loss | 55,399 | 50,883
– Mandatorily at fair value through profit or loss | 54,983 | 46,844 |  | Current tax liabilities | 351 | 324
Financial assets at fair value through other comprehensive income 5,6 | 41,116 | 31,625 |  | Deferred tax liabilities 31 | 184 | 257
Securities at amortised cost 6 | 48,313 | 48,160 |  | Provisions 15 | 899 | 1,030
Loans and advances to customers 7 | 642,453 | 635,557 |  | Other liabilities 16 | 13,130 | 13,344
Investments in associates and joint ventures 8 | 1,509 | 1,500 |  | Debt securities in issue 17 | 84,423 | 58,075
Property and equipment 9 | 2,399 | 2,446 |  | Subordinated loans 18 | 15,404 | 15,789
Intangible assets 10 | 1,198 | 1,102 |  | Total liabilities | 934,501 | 924,811
Current tax assets | 311 | 349 |  |  |  |
Deferred tax assets 31 | 1,280 | 1,796 |  | Equity 19 |  |
Other assets 11 | 7,109 | 8,839 |  | Share capital and share premium | 17,067 | 17,067
|  |  |  | Other reserves | -769 | -984
|  |  |  | Retained earnings | 23,893 | 26,462
|  |  |  | Shareholders’ equity (parent) | 40,191 | 42,546
|  |  |  | Non-controlling interests | 944 | 504
|  |  |  | Total equity | 41,135 | 43,050
Total assets | 975,636 | 967,861 |  | Total liabilities and equity | 975,636 | 967,861

References relate to the accompanying notes. These are an integral part of the Consolidated financial statements.

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ING Bank Annual Report 2023 119
Consolidated statement of profit or loss
for the years ended 31 December

in EUR million | 2023 | 2022 | 2021 |  |  | 2023 | 2022 | 2021
Interest income using effective interest rate method | 44,486 | 24,541 | 18,657 |  | Addition to loan loss provisions | 520 | 1,861 | 516
Other interest income | 7,741 | 3,935 | 2,474 |  | Staff expenses 25 | 6,725 | 6,152 | 5,938
Total interest income | 52,228 | 28,476 | 21,131 |  | Other operating expenses 26 | 4,838 | 5,040 | 5,257
|  |  |  |  | Total expenses | 12,083 | 13,053 | 11,711
Interest expense using effective interest rate method | -28,693 | -10,969 | -5,550 |  |  |  |  |
Other interest expense | -7,726 | -3,761 | -1,966 |  | Result before tax | 10,318 | 5,493 | 6,774
Total interest expense | -36,419 | -14,730 | -7,516 |  |  |  |  |
|  |  |  |  | Taxation 31 | 2,926 | 1,723 | 1,876
Net interest income 20 | 15,809 | 13,745 | 13,615 |  | Net result | 7,392 | 3,769 | 4,898
Fee and commission income | 5,100 | 5,085 | 5,004 |  | Net result attributable to: |  |  |
Fee and commission expense | -1,514 | -1,499 | -1,487 |  | Non-controlling interests | 235 | 102 | 128
Net fee and commission income 21 | 3,586 | 3,586 | 3,517 |  | Shareholders of the parent | 7,157 | 3,667 | 4,770
|  |  |  |  |  | 7,392 | 3,769 | 4,898
Valuation results and net trading income 22 | 2,910 | 1,503 | 847 |  |  |  |  |
Investment income 23 | 95 | 181 | 167 |  |  |  |  |
Share of result from associates and joint ventures 8 | 149 | 92 | 141 |  |  |  |  |
Impairment of associates and joint ventures 8 | -5 | -192 | -3 |  |  |  |  |
Result on disposal of group companies | 0 | 6 | -29 |  |  |  |  |
Net result on derecognition of financial assets measured at amortised cost | 3 | -5 | 0 |  |  |  |  |
Other net income 24 | -146 | -369 | 230 |  | Dividend per ordinary share | 22.08 | 13.50 | 6.72
Total income | 22,401 | 18,546 | 18,485 |  | Total amount of dividend paid (in million euros) | 10,269 | 6,277 | 3,125

References relate to the accompanying notes. These are an integral part of the Consolidated financial statements.

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ING Bank Annual Report 2023 120
Consolidated statement of comprehensive income
for the years ended 31 December

in EUR million | 2023 | 2022 | 2021
Net result (before non-controlling interests) | 7,392 | 3,769 | 4,898
Other comprehensive income |  |  |
Items that will not be reclassified to the statement of profit or loss: |  |  |
Realised and unrealised revaluations property in own use | 10 | 15 | -2
Remeasurement of the net defined benefit asset/liability 30 | -85 | -19 | 95
Net change in fair value of equity instruments at fair value through other comprehensive income | -30 | -126 | 96
Change in fair value of own credit risk of financial liabilities at fair value through profit or loss | -39 | 165 | 37
Items that may subsequently be reclassified to the statement of profit or loss: |  |  |
Net change in fair value of debt instruments at fair value through other comprehensive income | 68 | -428 | -178
Realised gains/losses on debt instruments at fair value through other comprehensive income reclassified to the statement of profit or loss | 9 | -26 | -42
Changes in cash flow hedge reserve | 1,138 | -3,158 | -1,955
Exchange rate differences 1 | -85 | 436 | 143
Share of other comprehensive income of associates and joint ventures and other income | 0 | 0 | -3
Total comprehensive income | 8,378 | 629 | 3,089
Comprehensive income attributable to: |  |  |
Non-controlling interests | 444 | -190 | -247
Shareholders of the parent | 7,934 | 819 | 3,336
| 8,378 | 629 | 3,089

1 Includes impact of application of hyperinflation accounting under IAS 29.
References relate to the accompanying notes. These are an integral part of the Consolidated financial
statements.
For the disclosure on the income tax effects on each component of the other comprehensive incom e,
reference is made to Note 31 'Taxation'.

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ING Bank Annual Report 2023 121
Consolidated statement of changes in equity

in EUR million | Share capital and share premium | Other reserves | Retained earnings | Shareholders' equity (parent) | Non- controlling interests | Total equity
Balance as at 31 December 2022 | 17,067 | -984 | 26,462 | 42,546 | 504 | 43,050
Impact of changes in accounting policies 1 |  |  | -45 | -45 | -1 | -46
Balance as at 1 January 2023 | 17,067 | -984 | 26,417 | 42,500 | 503 | 43,004
Net change in fair value of equity instruments at fair value through other comprehensive income |  | -34 | -1 | -35 | 5 | -30
Net change in fair value of debt instruments at fair value through other comprehensive income |  | 53 |  | 53 | 15 | 68
Realised gains/losses on debt instruments at fair value through other comprehensive income reclassified to the statement of profit or loss |  | 9 |  | 9 |  | 9
Changes in cash flow hedge reserve |  | 997 |  | 997 | 141 | 1,138
Realised and unrealised revaluations property in own use |  | 2 | 8 | 10 | 0 | 10
Remeasurement of the net defined benefit asset/liability 30 |  | -85 |  | -85 |  | -85
Exchange rate differences |  | -132 |  | -132 | 47 | -85
Share of other comprehensive income of associates and joint ventures and other income |  | -892 | 892 |  |  | 0
Change in fair value of own credit risk of financial liabilities at fair value through profit or loss |  | -39 |  | -39 |  | -39
Total amount recognised directly in other comprehensive income net of tax |  | -122 | 899 | 777 | 209 | 986
Net result |  | 336 | 6,821 | 7,157 | 235 | 7,392
Total comprehensive income net of tax |  | 214 | 7,720 | 7,934 | 444 | 8,378
Dividends |  |  | -10,269 | -10,269 | -3 | -10,272
Employee share plans |  |  | 30 | 30 | 0 | 30
Changes in the composition of the group and other changes |  |  | -5 | -5 | 0 | -5
Balance as at 31 December 2023 | 17,067 | -769 | 23,893 | 40,191 | 944 | 41,135

1 Changes in policy following the adoption of IFRS 17 and change in policy for non-financial guarantees.
References relate to the accompanying notes. These are an integral part of the Consolidated financial
statements. Changes in individual Reserve components are presented in Note 19 'Equity'.

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ING Bank Annual Report 2023 122
Consolidated statement of changes in equity - continued

in EUR million | Share capital and share premium | Other reserves | Retained earnings | Shareholders' equity (parent) | Non- controlling interests | Total equity
Balance as at 31 December 2021 | 17,067 | 1,069 | 29,778 | 47,914 | 736 | 48,650
Impact IAS 29 on opening balance |  | 627 | -563 | 64 |  | 64
Balance as at 1 January 2022 | 17,067 | 1,696 | 29,215 | 47,978 | 736 | 48,714
Net change in fair value of equity instruments at fair value through other comprehensive income |  | -95 | -23 | -118 | -7 | -126
Net change in fair value of debt instruments at fair value through other comprehensive income |  | -406 |  | -406 | -22 | -428
Realised gains/losses on debt instruments at fair value through other comprehensive income reclassified to the statement of profit or loss |  | -25 |  | -25 | -1 | -26
Changes in cash flow hedge reserve |  | -2,901 |  | -2,901 | -257 | -3,158
Realised and unrealised revaluations property in own use |  | -12 | 26 | 15 | 0 | 15
Remeasurement of the net defined benefit asset/liability 30 |  | -19 |  | -19 | 1 | -19
Exchange rate differences |  | 442 |  | 442 | -5 | 436
Share of other comprehensive income of associates and joint ventures and other income |  | 26 | -26 |  |  | 0
Change in fair value of own credit risk of financial liabilities at fair value through profit or loss |  | 150 | 15 | 165 |  | 165
Total amount recognised directly in other comprehensive income net of tax |  | -2,840 | -8 | -2,848 | -292 | -3,140
Net result |  | 161 | 3,506 | 3,667 | 102 | 3,769
Total comprehensive income net of tax |  | -2,679 | 3,498 | 819 | -190 | 629
Dividends |  |  | -6,277 | -6,277 | -41 | -6,319
Employee share plans |  |  | 27 | 27 |  | 27
Changes in the composition of the group and other changes |  |  | -1 | -1 | 0 | -1
Balance as at 31 December 2022 | 17,067 | -984 | 26,462 | 42,546 | 504 | 43,050

References relate to the accompanying notes. These are an integral part of the Consolidated financial
statements. Changes in individual Reserve components are presented in Note 19 'Equity'.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 123
Consolidated statement of changes in equity - continued

in EUR million | Share capital and share premium | Other reserves | Retained earnings | Shareholders' equity (parent) | Non- controlling interests | Total equity
Balance as at 31 December 2020 | 17,067 | 2,334 | 28,273 | 47,675 | 1,022 | 48,697
Net change in fair value of equity instruments at fair value through other comprehensive income |  | 101 | -6 | 94 | 2 | 96
Net change in fair value of debt instruments at fair value through other comprehensive income |  | -164 |  | -164 | -13 | -178
Realised gains/losses on debt instruments at fair value through other comprehensive income reclassified to the statement of profit or loss |  | -40 |  | -40 | -1 | -42
Changes in cash flow hedge reserve |  | -1,603 |  | -1,603 | -352 | -1,955
Realised and unrealised revaluations property in own use |  | -13 | 11 | -2 | 0 | -2
Remeasurement of the net defined benefit asset/liability 30 |  | 95 |  | 95 |  | 95
Exchange rate differences |  | 153 |  | 153 | -10 | 143
Share of other comprehensive income of associates and joint ventures and other income |  | -21 | 18 | -3 |  | -3
Change in fair value of own credit risk of financial liabilities at fair value through profit or loss |  | 37 |  | 37 |  | 37
Total amount recognised directly in other comprehensive income net of tax |  | -1,456 | 23 | -1,433 | -375 | -1,809
Net result |  | 191 | 4,579 | 4,770 | 128 | 4,898
Total comprehensive income net of tax |  | -1,265 | 4,601 | 3,336 | -247 | 3,089
Dividends |  |  | -3,125 | -3,125 | -40 | -3,165
Employee share plans |  |  | 28 | 28 | 0 | 28
Balance as at 31 December 2021 | 17,067 | 1,069 | 29,778 | 47,914 | 736 | 48,650

Changes in individual Reserve components are presented in Note 19 'Equity'.

Contents |  | Introduction |  | Strategy and performance |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 124
Consolidated statement of cash flows

in EUR million, for the years ended 31 December | 2023 | 2022 | 2021
Cash flows from operating activities |  |  |
Result before tax |  | 10,318 | 5,493 | 6,774
Adjusted for: | – Depreciation and amortisation | 674 | 711 | 834
| – Addition to loan loss provisions | 520 | 1,861 | 516
| – Revaluations | -2,836 | 4,706 | -103
| – Other non-cash items in Result before tax | 447 | 813 | 516
Taxation paid |  | -2,700 | -1,489 | -1,871
Changes in: | – Loans and advances to banks, not available on demand | 12,693 | -5,836 | 262
| – Deposits from banks, not payable on demand | -31,804 | -26,976 | 8,438
| – Trading assets | -3,366 | -5,485 | -29
| – Trading liabilities | -1,869 | 11,975 | -5,596
| – Loans and advances to customers | -5,815 | -19,306 | -27,772
| – Customer deposits | 14,103 | 34,005 | 18,339
| – Non–trading derivatives | 2,409 | -5,469 | 290
| – Assets designated at fair value through profit or loss | 256 | 56 | -1,905
| – Assets mandatorily at fair value through profit or loss | -7,402 | -4,143 | 1,650
| – Other assets | 1,724 | -2,861 | -121
| – Other financial liabilities at fair value through profit or loss | 4,384 | 9,843 | -6,795
| – Provisions and other liabilities | 2,143 | -667 | -1,298
Net cash flow from/(used in) operating activities | -6,120 | -2,769 | -7,869
Cash flows from investing activities |  |  |
Investments and advances: | - Associates and joint ventures | -55 | -48 | -91
| - Financial assets at fair value through other comprehensive income | -19,995 | -18,806 | -13,186
| - Securities at amortised cost | -49,614 | -24,651 | -44,945
| – Property and equipment | -246 | -231 | -184

|  | 2023 | 2022 | 2021
| – Other investments | -310 | -198 | -179
Disposals and redemptions: | – Associates and joint ventures | 164 | 58 | 57
| – Disposal of subsidiaries, net of cash disposed | 0 | 7 | 27
| - Financial assets at fair value through other comprehensive income | 11,913 | 14,526 | 17,750
| - Securities at amortised cost | 49,525 | 23,943 | 46,933
| – Property and equipment | 57 | 83 | 39
| – Other investments | 15 | 10 | 0
Net cash flow from/(used in) investing activities | -8,545 | -5,307 | 6,220
Cash flows from financing activities 29 |  |  |
Proceeds from debt securities | 110,477 | 81,636 | 77,298
Repayments of debt securities | -86,061 | -78,609 | -76,150
Proceeds from issuance of subordinated loans | 2,225 | 983 | 3,169
Repayments of subordinated loans | -2,894 | -1,090 | -2,538
Repayments of principal portion of lease liabilities | -291 | -296 | -301
Dividends paid | -10,272 | -6,319 | -3,165
Net cash flow from/(used in) financing activities | 13,184 | -3,694 | -1,686
Net cash flow |  | -1,481 | -11,770 | -3,335
Cash and cash equivalents at beginning of year | 95,390 | 107,664 | 111,565
Effect of exchange rate changes on cash and cash equivalents | -898 | -505 | -565
Cash and cash equivalents at end of year | 93,011 | 95,390 | 107,664

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ING Bank Annual Report 2023 125
Consolidated statement of cash flows - continued

Cash and cash equivalents
in EUR million | 2023 | 2022 | 2021
Treasury bills and other eligible bills included in securities at AC | 0 | 1 | 23
Deposits from banks | -5,132 | -6,172 | -7,059
Loans and advances to banks | 7,930 | 13,947 | 8,180
Cash and balances with central banks | 90,214 | 87,614 | 106,520
Cash and cash equivalents at end of year | 93,011 | 95,390 | 107,664

Cash and cash equivalents includes deposits from banks and loans and advances to banks that are payable
on demand.
Included in Cash and cash equivalents are minimum mandatory reserve deposits held at various central
banks. Reference is made to Note 36 'Transfer of financial assets, assets pledged and received as collateral'
for restrictions on Cash and balances with central banks.
References relate to the accompanying notes. These are an integral part of the Consolidated financial
statements.
The table below presents the Interest and dividend received and paid.

in EUR million | 2023 | 2022 | 2021
Interest received | 51,030 | 28,110 | 21,515
Interest paid | -33,859 | -14,201 | -8,723
| 17,171 | 13,909 | 12,792
Dividend received 1 | 205 | 229 | 172
Dividend paid | -10,272 | -6,319 | -3,165

1 Includes dividends received as recognised within Investment Income, from equity securities included in the Financial assets at fair
value through profit or loss, Financial assets at fair value through OCI, and from Investments in associates and joint ventures. Dividends
paid and received from trading positions have been included.
Dividends received from associates and joint ventures are included in investing activities, interest received,
interest paid and other dividends received are included in operating activities and dividend paid is included
in financing activities in the Consolidated statement of cash flows.

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ING Bank Annual Report 2023 126
Notes to the Consolidated financial statements
1 Basis of preparation and material accounting policy information
1.1 Reporting entity and authorisation of the Consolidated financial statements
ING Bank N.V. (Naamloze vennootschap) is a company domiciled in Amsterdam, the Netherlands.
Commercial Register of Amsterdam, number 33031431. ING Bank N.V. is a wholly-owned subsidiary of ING
Groep N.V. domiciled in Amsterdam, the Netherlands. These Consolidated financial statements, as at and for
the year ended 31 December 2023, comprise ING Bank N.V. (the Parent company) and its subsidiaries,
together referred to as ING Bank. ING Bank 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.
The ING Bank Consolidated financial statements, as at and for the year ended 31 December 2023, were
authorised for issue in accordance with a resolution of the Management Board Banking on 4 March 2024.
The General Meeting of the Shareholder may decide not to adopt the financial statements, but may not
amend these.
1.2 Basis of preparation of the Consolidated financial statements
The ING Bank Consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the relevant articles of Part
9 of Book 2 of the Dutch Civil Code.
IFRS as adopted by the EU are IFRS Standards and IFRS Interpretations as issued by the International
Accounting Standards Board (IASB) and the IFRS Interpretations Committee (IFRIC) with some limited
modifications such as the temporary ‘carve-out’ from IAS 39 ‘Financial Instruments: Recognition and
Measurement’ (herein, referred to as IFRS).
Under the EU carve-out, ING Bank applies fair value hedge accounting to portfolio hedges of interest rate risk
(macro hedging). For further information, reference is made to paragraph 1.5.4 ‘Derivatives and hedge
accounting’ of this note and to Note 33 'Derivatives and hedge accounting'.
The ING Bank Consolidated financial statements have been prepared on a going concern basis and there are
no significant doubts about the ability of ING Bank to continue as a going concern.
The Consolidated financial statements are presented in euros and rounded to the nearest million, unless
stated otherwise. Amounts may not add up due to rounding.
1.2.1 Presentation of Risk management disclosures
To improve transparency, reduce duplication and present related information in one place, certain
disclosures of the nature and extent of risks related to financial instruments required by IFRS 7 ‘Financial
instruments: Disclosures’ are included in the ‘Risk management’ section of the Annual Report.
These disclosures are an integral part of ING Bank Consolidated financial statements and are indicated in the
‘Risk management’ section by the symbol (*). Chapters, paragraphs, graphs or tables within the risk
management section that are indicated with this symbol in the respective headings or table header are
considered to be an integral part of the Consolidated financial statements.
1.3 Changes to accounting policies and presentation
ING Bank has consistently applied its accounting policies to all periods presented in these Consolidated
financial statements.
In 2023, ING Bank updated the presentation in note 13 'Customer deposits' to improve consistency and
comparability. Comparative figures for 2022 have been updated accordingly.
1.3.1 Changes in IFRS effective in 2023
ING Bank had the following changes in accounting policies in the current reporting period:
IFRS 17 ‘Insurance Contracts’
IFRS 17, a new accounting standard for insurance contracts covering recognition and measurement,
presentation and disclosure requirements, became effective on 1 January 2023. IFRS 17 replaces IFRS 4
‘Insurance Contracts’, which allowed diversity in accounting practices for insurance contracts. IFRS 17
includes an optional scope exclusion for loans with death waivers.

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 127
ING Bank does not have an insurance business, but on a limited basis sells insurance products as a broker
where it does not run the insurance risk, hence such contracts are not in scope of IFRS 17. However, ING has
a portfolio of loans with death waivers in the Netherlands with a net carrying amount of EUR 743 million at
1 January 2023. While IFRS 4 allowed separation of such contracts into two components in the past (a loan
in scope of IFRS 9 ‘Financial Instruments’ measured at amortised cost and an insurance contract for the
death waiver feature in scope of IFRS 4), IFRS 17 no longer allows such separation and requires such
instruments to be accounted for in their entirety using either IFRS 9 or IFRS 17.
ING Bank chooses to apply IFRS 9 ’Financial Instruments’ to such loans with death waivers. As a result, this
portfolio no longer meets the ‘solely payments of principal and interest’ (SPPI) criterion. This causes the
portfolio to be measured at fair value through profit or loss instead of amortised cost from 1 January 2023.
This reclassification led to EUR -13 million impact on the opening total equity at 1 January 2023. Therefore,
the financial impact of IFRS 17 on ING Bank is limited.
Accounting treatment of non-financial guarantees
ING Bank changed its accounting policy for non-financial guarantees that are subject to contractual
indemnification rights (such as performance and other non-financial guarantees as well as letters of credit)
from IAS 37 principles to loan commitment accounting under IFRS 9. The re-scoping was triggered by the
introduction of IFRS 17 Insurance contracts and results in reliable and more relevant information,
particularly when credit risk is elevated as IFRS 9 expected credit losses model captures that risk earlier than
IAS 37. This voluntary policy change had a limited impact on ING’s opening total equity of EUR -33 million.
Other changes in IFRS effective in 2023 (endorsed by the EU)
The following amendments to IFRS became effective in the current reporting period with no significant
impact for ING:
• Amendments to IAS 1 ‘Presentation of Financial Statements’: Disclosure of Accounting Policies (issued in
February 2021).
• Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’: Definition of
Accounting Estimates (issued in February 2021).
• Amendments to IAS 12 ‘Income Taxes’: Deferred Tax Related to Assets and Liabilities Arising From a
Single Transaction (issued in May 2021).
• Amendments to IAS 12 'Income Taxes': International Tax Reform - Pillar Two Model Rules. These
amendments allow ING Bank to scope out Pillar Two model rules from the deferred tax recognition and
related disclosure requirements. More information on ING Bank’s exposure to Pillar Two model rules is
included in note 28 ‘Information on geographical areas'.
1.3.2 Upcoming changes in IFRS after 2023
The following published amendments are not mandatory for 2023 and have not been early adopted by ING
Bank. The implementation of these amendments is expected to have no significant impact on ING Bank's
Consolidated financial statements when they become effective.
Effective in 2024 (endorsed by the EU):
• Amendments to IFRS 16 'Leases': Lease Liability in a Sale and Leaseback (issued in September 2022).
• Amendments to IAS 1 ‘Presentation of Financial Statements’: Classification of Liabilities as Current or
Non-current (issued in January 2020).
Effective in 2024 (not yet endorsed by the EU):
• Amendments to IAS 7 'Statement of Cash flows' and IFRS 7 'Financial Instruments: Disclosures': Supplier
Finance Arrangements (issued in May 2023).
Effective in 2025 (not yet endorsed by the EU):
• Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates': Lack of Exchangeability
(issued in August 2023).
1.4 Significant judgements and critical accounting estimates and assumptions
The preparation of the Consolidated financial statements requires management to make judgements in the
process of applying its accounting policies and to use estimates and assumptions. The estimates and
assumptions affect the reported amounts of the assets and liabilities and the amounts of the contingent
assets and contingent liabilities at the balance sheet date, as well as reported income and expenses for the
year. The actual outcome may differ from these estimates. The process of setting assumptions is subject to
internal control procedures and approvals.
ING Bank has identified areas that require management to make significant judgements and use critical
accounting estimates and assumptions based on the information and financial data that may or may not
change in future periods. These areas are:
• Loan loss provisions (financial assets) (refer to note 1.5.6 ‘Impairment of financial assets');
• The determination of the fair values of financial assets and liabilities (refer to 1.5.3 for ‘Fair values of
financial assets and liabilities’);
• Investment in associate - assessment of additional impairment losses or reversal of previous impairment
losses (refer to note 1.10 ‘Investments in associates and joint ventures);

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 128
• Provisions (refer to note 1.15 ‘Provisions, contingent liabilities and contingent assets’); and
• Accounting for Targeted Longer-Term Refinancing Operations (TLTRO) (refer to note 1.5.8 ‘Accounting
for Targeted Longer-Term Refinancing Operations (TLTRO)').
1.5 Financial instruments
ING Bank applies IFRS 9 ‘Financial Instruments’ to the recognition, classification and measurement, and
derecognition of financial assets and financial liabilities and the impairment of financial assets. The Group
applies the requirements of IAS 39 ‘Financial Instruments: Recognition and Measurement’ for hedge
accounting purposes.
1.5.1 Recognition and derecognition of financial instruments
Recognition of financial assets
Financial assets are recognised in the balance sheet when ING Bank becomes a party to the contractual
provisions of the instrument. For a regular way purchase or sale of a financial asset, trade date and
settlement date accounting is applied depending on the classification of the financial asset.
Derecognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where ING Bank has transferred the rights to receive the cash flows from the financial asset or
assumed an obligation to pass on the cash flows and has transferred substantially all the risks and rewards
of the asset. If ING Bank neither transfers nor retains substantially all the risks and rewards of ownership of a
financial asset, it derecognises the financial asset if it no longer has control over the asset. The difference
between the carrying amount of a financial asset that has been derecognised and the consideration
received is recognised in profit or loss.
Recognition of financial liabilities
Financial liabilities are recognised on the date that the entity becomes a party to the contractual provisions
of the instrument.
Derecognition of financial liabilities
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished and
the consideration paid is recognised in profit or loss.
1.5.2 Classification and measurement of financial instruments
Financial assets
ING Bank classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
• those to be measured at amortised cost (AC).
At initial recognition, ING Bank measures a financial asset at its fair value plus, in the case of a financial
asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss (FVPL) are expensed in the
statement of profit or loss.
Financial assets – Debt instruments
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows at initial recognition.
Business models
Business models are classified as Hold to Collect (HtC), Hold to Collect and Sell (HtC&S) or Other depending
on how a portfolio of financial instruments as a whole is managed. ING Bank’s business models are based on
the existing management structure of the bank, and refined based on an analysis of how businesses are
evaluated and reported, how their specific business risks are managed and on historic and expected future
sales. Sales are permissible in a HtC business model when these are due to an increase in credit risk, take
place close to the maturity date (where the proceeds from the sales approximate the collection of the
remaining contractual cash flows), are insignificant in value (both individually and in aggregate) or are
infrequent.
Contractual cash flows Solely Payments of Principal and Interest (SPPI)
The contractual cash flows of a financial asset are assessed to determine whether they represent SPPI.
Interest includes consideration for the time value of money, credit risk and for other basic lending risks such
as consideration for liquidity risk and costs associated with holding the financial asset for a particular period
of time. In addition, interest can include a profit margin that is consistent with a basic lending arrangement.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are SPPI.
In assessing whether the contractual cash flows are SPPI, ING Bank considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it would not meet this condition.

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 129
Based on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows, there are three measurement categories into which ING Bank classifies its debt instruments:
• Amortised Cost (AC):
Debt instruments that are held for collection of contractual cash flows under a HtC business model where
those cash flows represent SPPI are measured at AC. Interest income from these financial assets is
included in Interest income using the Effective Interest Rate (EIR) method. Any gain or loss arising on
derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line
item in the statement of profit or loss.
• FVOCI:
Debt instruments that are held for collection of contractual cash flows and for selling the financial assets
under a HtC&S business model, where the assets’ cash flows represent SPPI, are measured at FVOCI.
Movements in the carrying amount are recognised in OCI, except for the recognition of impairment gains
or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and presented in Investment income or Other net income, based
on the specific characteristics of the business model. Interest income from these financial assets is
included in Interest income using the EIR method. Impairment losses are presented as a separate line
item in the statement of profit or loss.
• FVPL:
Debt instruments that do not meet the criteria for AC or FVOCI are measured at FVPL. This includes debt
instruments that are held-for-trading (presented separately as Trading assets) and all other debt
instruments that do not meet the criteria for AC or FVOCI (presented separately as Mandatorily at FVPL).
ING Bank may in some cases, on initial recognition, irrevocably designate a financial asset as classified
and measured at FVPL. This is the case where doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise on assets measured at AC or FVOCI. Fair value movements on
trading securities, trading loans and deposits (mainly reverse repo’s) are presented fully within valuation
result and net trading income, this also includes interest. The interest arising on financial assets
designated as at FVPL is recognised in profit or loss and presented within Interest income or Interest
expense in the period in which it arises. The interest arising on a debt instrument that is part of a hedge
relationship, but not subject to hedge accounting, is recognised in profit or loss and presented within
Interest income or Interest expense in the period in which it arises.
ING Bank reclassifies debt instruments if, and only if, its business model for managing those financial assets
changes. Such changes in business models are expected to be very infrequent. There have been no
reclassifications during the reporting period.
Financial assets – Equity instruments
All equity investments are measured at fair value. ING Bank applies the fair value through OCI option to
investments which are considered strategic, consisting of investments that add value to ING Bank’s core
banking activities.
There is no subsequent recycling of fair value gains and losses to profit or loss following the derecognition of
investments if elected to be classified and measured as FVOCI. However, the cumulative gain or loss is
transferred within equity to retained earnings on derecognition of such equity instruments. Dividends from
such investments continue to be recognised in profit or loss as Investment income when ING’s right to
receive payments is established. Impairment requirements are not applicable to equity investments
classified and measured as FVOCI.
Other remaining equity investments are measured at FVPL. All changes in the fair value are recognised in
Valuation result and Net trading income in the Consolidated statement of profit or loss.
Financial liabilities
Financial liabilities are classified and subsequently measured at AC, except for financial guarantee contracts,
derivatives and liabilities designated at FVPL. Financial liabilities classified and measured at FVPL are
presented as follows:
• the amount of change in the fair value that is attributable to changes in own credit risk of the liability
designated at FVPL is presented in OCI. Upon derecognition this Debit Valuation Adjustment (DVA) impact
does not recycle from OCI to profit or loss; and
• the remaining amount of change in the fair value is presented in profit or loss in ‘Valuation results and
net trading income’. Interest on financial liabilities at FVPL is also recognised in the valuation result,
except for items voluntarily designated as FVPL for which interest is presented within ‘Interest income
(expense).
A financial guarantee contract is a contract that requires ING Bank to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in
accordance with the original or modified terms of a debt instrument. Such a contract is initially recognised
at fair value and is subsequently measured at the higher of (a) the amount determined in accordance with
impairment provisions of IFRS 9 ‘Financial instruments’ (see section 'Impairment of financial assets') and (b)
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance
with the revenue recognition principle of IFRS 15 ‘Revenue from contracts with customers’.

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 130
Repurchase transactions and reverse repurchase transactions
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the Consolidated statement of financial position. The counterparty liability is
measured at FVPL (designated) and included in Other financial liabilities at FVPL if the asset is measured at
FVPL. Otherwise, the counterparty liability is included in Deposits from banks, Customer deposits, or Trading,
as appropriate.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the Consolidated statement of financial position. The consideration paid
to purchase securities is recognised as Loans and advances to customers, Loans and advances to banks,
Other financial assets at FVPL or Trading assets, as appropriate. The difference between the sale and
repurchase price is treated as interest and amortised over the life of the agreement using the effective
interest method for instruments that are not measured at FVPL.
1.5.3 Fair values of financial assets and liabilities
All financial assets and liabilities are recognised initially at fair value. The fair value of a financial instrument
on initial recognition is generally its transaction price (that is, the fair value of the consideration given or
received). However, if there is a material difference between the transaction price and the fair value of
financial instruments whose fair value is based on a valuation technique using significant unobservable
inputs, the entire day one difference (a ‘Day One Profit or Loss’) is deferred. ING Bank defers the Day One
Profit or Loss relating to financial instruments classified as Level 3 and financial instruments with material
unobservable inputs into CVA which are not necessarily classified as Level 3. The deferred Day One Profit or
Loss is recognised in the statement of profit or loss over the life of the transaction until the transaction
matures, or until the significant unobservable inputs become observable, or until the significant
unobservable inputs become non-significant. In all other cases, ING Bank recognises the difference as a gain
or loss at inception.
Subsequently, except for financial assets and financial liabilities measured at amortised cost, all the other
financial assets and liabilities are measured at fair value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. It assumes that market
participants would use and take into account the characteristics of the asset or liability when pricing the
asset or liability. Fair values of financial assets and liabilities are based on unadjusted quoted market prices
where available. Such quoted market prices are primarily obtained from exchange prices for listed financial
instruments. Where an exchange price is not available, quoted prices in an active market may be obtained
from independent market vendors, brokers, or market makers. In general, positions are valued at the bid
price for a long position and at the offer price for a short position or are valued at the price within the bid-
offer spread that is most representative of fair value in the circumstances. In some cases where positions
are marked at mid-market prices, a fair value adjustment is calculated.
For certain financial assets and liabilities, quoted market prices are not available. For such instruments, fair
value is determined using valuation techniques. These range from discounting of cash flows to various
valuation models, where relevant pricing factors including the market price of underlying reference
instruments, market parameters (volatilities, correlations and credit ratings), and customer behaviour are
taken into account. ING Bank maximises the use of market observable inputs and minimises the use of
unobservable inputs in determining the fair value. It can be subjective dependent on the significance of the
unobservable input to the overall valuation. All valuation techniques used are subject to internal review and
approval. Most data used in these valuation techniques are validated on a daily basis when possible.
When a group of financial assets and liabilities are managed on the basis of their net risk exposures, the fair
value of a group of financial assets and liabilities are measured on a net portfolio level.
To include credit risk in fair value, ING Bank applies both Credit and Debit Valuation Adjustments (CVA, DVA,
also known as Bilateral Valuation Adjustments or BVA). Own issued debt and structured notes that are
designated at FVPL are adjusted for ING Bank’s own credit risk by means of a DVA.
To include the funding risk, ING Bank applies an additional ‘Funding Valuation Adjustment’ (FVA) to the
uncollateralised derivatives based on the market price of funding liquidity. ING Bank also applies to certain
positions other valuation adjustments to arrive at the fair value: Bid-Offer adjustments, Model Risk
Adjustments and Collateral Valuation Adjustments (CollVA).

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 131

Significant judgements and critical accounting estimates and assumptions: • Even if market prices are available, when markets are less liquid there may be a range of prices for the same security from different price sources. Selecting the most appropriate price requires judgement and could result in different estimates of fair value. • Valuation techniques are subjective in nature and significant judgement is involved in establishing fair values for certain financial assets and liabilities. Valuation techniques involve various assumptions regarding pricing factors. The use of different valuation techniques and assumptions could produce significantly different estimates of fair value. • Price testing is performed to assess whether the process of valuation has led to an appropriate fair value of the position and to minimise the potential risks of economic losses due to incorrect or misused models. • Assessing whether a market is active, and whether an input is observable and significant, requires judgement. ING Bank categorises its financial instruments that are either measured in the statement of financial position at fair value or of which the fair value is disclosed, into a three level hierarchy based on the observability and significance of the valuation inputs. The use of different approaches to assess whether a market is active, whether an input is observable, and whether an unobservable input is significant could produce different classification within the fair value hierarchy as well as potentially different deferral of the Day One Profit or Loss. • Reference is made to Note 32 'Fair value of assets and liabilities ' and to the ‘Market risk’ paragraph in the ‘Risk management’ section of the Annual Report for the basis of the determination of the fair value of financial instruments and related sensitivities.

1.5.4 Derivatives and hedge accounting
IFRS 9 includes an accounting policy choice to defer the adoption of IFRS 9 hedge accounting and to
continue with hedge accounting under IAS 39. ING Bank decided to exercise this accounting policy choice
and did not adopt IFRS 9 hedge accounting as of 1 January 2018. Furthermore, ING Bank applies fair value
hedge accounting for portfolio hedges of interest rate risk (macro fair value hedges) in accordance with the
EU carve-out version of IAS 39.
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently measured at fair value. Fair values are obtained from quoted market prices in active
markets, including market transactions and valuation techniques (such as discounted cash flow models and
option pricing models), as appropriate. All derivatives are carried as assets when their fair value is positive
and as liabilities when their fair value is negative. Fair value movements on derivatives are presented in
profit or loss in Valuation result and net trading income, except for derivatives in either a formal hedge
relationship and so-called economic hedges that are not in a formal hedge accounting relationship where a
component is presented separately in interest result in line with ING Bank’s risk management strategy.
Embedded derivatives are separated from financial liabilities and other non-financial contracts and
accounted for as a derivative if, and only if:
1. the economic characteristics and risks of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
2. a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and
3. the combined instrument is not measured at fair value with changes in fair value reported in profit or
loss.
If an embedded derivative is separated, the host contract is accounted for as a similar free-standing
contract.
The method of recognising the resulting fair value gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. ING Bank designates
certain derivatives as hedges of the fair value of recognised assets or liabilities or firm commitments (fair
value hedge), hedges of highly probable future cash flows attributable to a recognised asset or liability or a
forecast transaction (cash flow hedge), or hedges of a net investment in a foreign operation. Hedge
accounting is used for derivatives designated in this way provided certain criteria are met.
At the inception of the transaction, ING Bank documents the relationship between hedging instruments and
hedged items, its risk management objective, together with the methods selected to assess hedge
effectiveness. ING Bank also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in
fair values or cash flows of the hedged items.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised
in the statement of profit or loss, together with fair value adjustments to the hedged item attributable to
the hedged risk. If the hedge relationship no longer meets the criteria for hedge accounting, the cumulative
adjustment of the hedged item is, in the case of interest bearing instruments, amortised through the
statement of profit or loss over the remaining term of the original hedge or recognised directly when the
hedged item is derecognised. For non-interest bearing instruments, the cumulative adjustment of the
hedged item is recognised in the statement of profit or loss only when the hedged item is derecognised.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in the Other Comprehensive Income. The gain or loss relating to the ineffective
portion is recognised immediately in the statement of profit or loss. Amounts accumulated in the Other

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 132
Comprehensive Income are recycled to the statement of profit or loss in the periods in which the hedged
item affects net result. When a hedging instrument expires or is sold, or when a hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss existing in the Other Comprehensive Income at
that time remains in the Other Comprehensive Income and is recognised when the forecast transaction is
ultimately recognised in the statement of profit or loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in the Other Comprehensive Income is transferred
immediately to the statement of profit or loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any
gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in the
Other Comprehensive Income and the gain or loss relating to the ineffective portion is recognised
immediately in the statement of profit or loss. Gains and losses accumulated in the Other Comprehensive
Income are included in the statement of profit or loss when the foreign operation is disposed.
IBOR Transition – specific policies for hedges directly affected by IBOR reform
As explained in the ‘IBOR Transition’ paragraph of the ‘Risk management’ section, a fundamental review of
important interest rates benchmarks has been carried out, and it is still in process for some of them (for
instance, WIBOR).
Given that IBOR reform may have various accounting implications, the International Accounting Standards
Board (IASB) has undertaken a two-phase project. Phase 1 addresses those issues that affect financial
reporting before the replacement of an existing benchmark. Phase 1 amendments to IFRS were issued by
the IASB in 2019. Phase 2 focuses on issues that may affect financial reporting when the existing benchmark
rate is reformed or replaced. Phase 2 amendments to IFRS were issued by the IASB in 2020.
Phase 1 amendments to IFRS allow ING Bank to apply a set of temporary exceptions to continue hedge
accounting even when there is uncertainty about contractual cash flows arising from the reform. Under
these temporary exceptions, interbank offered rates are assumed to continue unaltered for the purposes of
hedge accounting until such time as the uncertainty is resolved.
More specifically, the following temporary reliefs are part of the Phase 1 amendments:
• Highly probable requirement for cash flow hedges
When determining whether a forecast transaction is highly probable, it is assumed that the interest rate
benchmark on which the hedged cash flows are based is not altered as a result of the reform.
• Prospective assessment of hedge effectiveness
When performing the prospective assessment it is assumed that the interest rate benchmark on which
the hedged cash flows are based is not altered as a result of the reform.
• Retrospective assessment of hedge effectiveness
When performing the retrospective assessment hedges are allowed to pass the assessment even if
actual results are outside the 80-125% range, during the period of uncertainty arising from the IBOR
reform.
• Designation of a component of an item as a hedged item
For hedges of the benchmark component of interest rate risk affected by the reform, the separately
identifiable requirement only needs to be demonstrated at the inception of such hedging relationships
(including macro hedges).
The amendments are relevant given that ING Bank hedges and applies hedge accounting to benchmark
interest rate exposure part of IBOR reform. ING Bank hedges are being progressively amended, where
necessary, to incorporate the new benchmark rates. Temporary exceptions under Phase 1 continued to be
relevant for ING Bank as at 31 December 2023 (mainly for WIBOR hedges).
ING Bank will completely cease to apply the amendments when this uncertainty is no longer present or
when the hedging relationship is discontinued. Refer to note ‘Risk management/ IBOR Transition’ for the
disclosures relating to the application of the amendments as part of Phase 1 and for more information
regarding the end of Phase 1 reliefs for ING Bank’s hedging relationships.
Phase 2 amendments require that hedge accounting continues on transition to risk free rates provided that
the modifications made to financial instruments are those necessary to implement the IBOR Reform and
that the new basis for calculating cash flows is ‘economically equivalent’ to the previous basis. Particularly,
Phase 2 amendments allow the continuation of hedging relationships, subject to amending their
documentation to reflect changes in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new benchmark rates. During 2022, Phase 2
continued to be relevant for ING Bank when ING actually transitioned its financial instruments (designated in
hedge accounting relationships) to the new benchmark rates (mainly, USD LIBOR).
More specifically, the following temporary reliefs are part of the Phase 2 amendments:
Relief from discontinuing hedging relationships
• Amendments in the hedge documentation as a consequence of changes required by the IBOR reform do
not result in the discontinuation of the hedge relationship nor the designation of a new hedge
relationship. The changes can be in form of designating an alternative benchmark rate as a hedged risk,

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the description of the hedging instrument, the description of the hedged item, or the method to measure
the effectiveness.
• When the hedged item is amended as a consequence of the IBOR reform (or if the hedge has previously
been discontinued), amounts accumulated in the cash flow hedge reserve are deemed to be based on
the Risk-Free Rate (RFR). This results in the release of the cash flow hedge reserve to profit or loss in the
same period or periods in which the hedged cash flows that are now based on the RFR affect profit or
loss.
• When the items within a designated group of hedged items are amended as a consequence of the IBOR
reform, the hedging strategy remains and is not discontinued. As items within the hedged group
transition at different times from IBORs to RFRs, they are transferred to sub-groups of instruments that
reference RFRs as the hedged risk. The existing IBORs remain designated as the hedged risk for the other
sub-group of hedged items, until they are also updated to reference the new RFR. The usual hedge
accounting requirements are applied to the hedge relationship in its entirety.
• For the assessment of retrospective hedge effectiveness, the cumulative fair value changes may be reset
to zero when the exception to the retrospective assessment of the Phase 1 reliefs ends. This election is
made separately for each hedging relationship (i.e., on a hedge-by-hedge basis).
• Temporary relief from having to meet the separately identifiable requirement: a RFR is considered a
separately identifiable risk component if it is reasonably expected to meet the separately identifiable
requirement within 24 months from the date it is first designated as a non-contractually specified risk
component (i.e. when the entity first designates the RFR as a non-contractually specified risk
component). This relief applies to each RFR on a rate-by-rate basis.
Non-trading derivatives that do not qualify for hedge accounting
Derivative instruments that are used by ING Bank as part of its risk management strategies, but which do
not qualify for hedge accounting under ING Bank’s accounting policies, are presented as non-trading
derivatives. Non-trading derivatives are measured at fair value with changes in the fair value taken to the
statement of profit or loss.
1.5.5 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset, and the net amount is reported in the statement of
financial position when ING Bank has a current legally enforceable right to set off the recognised amounts
and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously.
Offsetting is applied to certain derivatives for which the services of a central clearing house or broker are
used.
1.5.6 Impairment of financial assets
An Expected Credit Loss (ECL) model is applied to financial assets accounted for at AC or FVOCI such as
loans, debt securities and lease receivables, as well as off-balance sheet items such as undrawn loan
commitments, certain financial guarantees issued, and undrawn committed revolving credit facilities. Under
the ECL model, ING Bank calculates the expected credit losses (ECL) by considering on a discounted basis the
cash shortfall it would incur in case of a default and multiplying the shortfall by the probability of a default
occurring. The ECL is the sum of the probability-weighted outcomes. The ECL estimates are unbiased and
include reasonable and supportable information about past events, current conditions, and forecasts of
future economic conditions. ING Bank’s approach leverages the Advanced Internal Ratings Based (AIRB)
models that are used for regulatory purposes. Adjustments are applied to make these models suitable for
determining ECL. ECL is recognised on the balance sheet as loan loss provisions (LLP).
Three stage approach
Financial assets are classified in one of the below three Stages at each reporting date. A financial asset can
move between Stages during its lifetime. The Stages are based on changes in credit quality since initial
recognition and defined as follows:
• Stage 1
Financial assets that have not had a significant increase in credit risk since initial recognition (i.e. no
Stage 2 or 3 triggers apply). Assets are classified as Stage 1 upon initial recognition (with the
exception of purchased or originated credit impaired (POCI) assets) and ECL is determined by the
probability that a default occurs in the next 12 months (12 months ECL);
• Stage 2
Financial assets showing a significant increase in credit risk since initial recognition. For assets in Stage
2 ECL reflects an estimate on the credit losses over the remaining maturity of the asset (lifetime ECL);
or
• Stage 3
Financial assets that are credit-impaired. Also for these assets ECL is determined over the remaining
maturity of the asset.
Significant increase in credit risk
ING Bank established a framework, incorporating quantitative and qualitative indicators, to identify and
assess significant increases in credit risk (SICR). This is used to determine the appropriate ECL Stage for each
financial asset.
The main determinate of SICR is a quantitative test, whereby the lifetime Probability of Default (PD) of an
asset at each reporting date is compared against its lifetime PD determined at the date of initial recognition.
If the delta is above pre-defined absolute or relative thresholds the item is considered to have experienced a

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 134
SICR. Furthermore, any facility which shows an increase of 200% between the PD at the date of initial
recognition and the lifetime PD at the reporting date (i.e. threefold increase in PD) must be classified as
Stage 2. This is considered a backstop within the quantitative assessment of SICR. Refer to ‘Criteria for
identifying a significant increase in credit risk’ in the ‘Risk Management’ section of the Annual Report for
more details on relative and absolute PD thresholds, including quantitative disclosures on those thresholds.
Consequently, if the above quantitative SICR thresholds are exceeded, the item moves from Stage 1 to Stage
2 (unless the item is credit-impaired). In these instances, items are no longer assigned a 12 month ECL and
instead are assigned a lifetime ECL. Items can return to Stage 1 if there is sufficient evidence that there is no
longer a significant increase in credit risk.
ING Bank also relies on a number of qualitative indicators to identify and assess SICR. These include:
• Forbearance status;
• Watch List status;
• Intensive care management;
• Collective SICR assessment;
• Substandard Internal rating; and
• Arrears status (including 30 days past due used as a backstop).
An asset that is in Stage 2 will move back to Stage 1 when none of the above criteria are in place anymore.
However, if the asset was moved to Stage 2 based on the forbearance status, then the asset stays in Stage
2 for at least 24 months. If the asset was classified as Stage 2 due to 30 days past due trigger, then the
asset is moved back to Stage 1 only after three months from when the trigger no longer applies.
Credit-impaired financial assets (Stage 3)
Financial assets are assessed for credit-impairment at each reporting date and more frequently when
circumstances warrant further assessment. Evidence of credit-impairment includes arrears of over 90 days
on any material credit obligation, indications that the borrower is experiencing significant financial difficulty,
a breach of contract, bankruptcy or distressed restructuring. The definition of credit-impaired under IFRS 9
(Stage 3) is aligned with the definition of default used by ING Bank for internal risk management purposes,
which is also the definition used for regulatory purposes.
An asset (other than a POCI asset) that is in Stage 3 will move back to Stage 2 when, as at the reporting
date, it is no longer considered to be credit-impaired subject to certain probation periods. The asset will
migrate back to Stage 1 when its credit risk at the reporting date is no longer considered to have increased
significantly since initial recognition.
Macroeconomic scenarios
ING Bank has established a quarterly process whereby forward-looking macroeconomics scenarios and
probability weightings are developed for the purpose of ECL. ING Bank applies data predominantly from a
leading service provider enriched with the internal ING Bank view. A baseline, up-scenario and a down-
scenario are determined to reflect an unbiased and probability-weighted ECL amount. As a baseline
scenario, ING Bank applies the market-neutral view combining consensus forecasts for economic variables
such as unemployment rates, GDP growth, house prices, commodity prices, and short-term interest rates.
Applying market consensus in the baseline scenario ensures unbiased estimates of the expected credit
losses.
The alternative scenarios are based on observed forecast errors in the past, adjusted for the risks affecting
the economy today and the forecast horizon. The probabilities assigned are based on the likelihoods of
observing the three scenarios and are derived from confidence intervals on a probability distribution. The
forecasts for the economic variables are adjusted on a quarterly basis.
The probability weights applied to each of the three scenarios
ING Bank uses three macroeconomic scenarios when determining IFRS 9 ECL (baseline, upside and
downside). Management approach used to determine the weights of each scenario and in selecting the
parts of the distribution of forecast errors from which the weights are derived and disclosed in the
‘Alternative scenarios and probability weights’ and the sensitivity analysis in the ‘Risk Management’ section
of the Annual Report.
Measurement of ECL
ING Bank applies a collective assessment method to measure ECL for Stage 1, Stage 2, and certain Stage 3
assets. Other credit-impaired assets subject to ECL measurement apply the individual assessment method.
Collectively assessed assets (Stages 1 to 3)
For collective assessed assets, ING Bank applies a model-based approach. ECL is determined by, expressed
simplistically, multiplying the probability of default (PD) with the loss given default (LGD) and exposure at
default (EAD), adjusted for the time value of money. Assets that are collectively assessed are grouped on
the basis of similar credit risk characteristics, taking into account loan type, industry, geographic location,
collateral type, past due status and other relevant factors. These characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors’ ability to pay all
amounts due according to the contractual terms of the assets being evaluated and the loss in case the
debtor is not able to pay all amounts due.
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on
characteristics of defaulted facilities.

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ING Bank Annual Report 2023 135
For the purpose of ECL, ING Bank’s expected credit loss models (PD, LGD, EAD) used for regulatory purposes
have been adjusted. These adjustments include removing embedded prudential conservatism (such as
floors) and converted through-the-cycle estimates to point-in-time estimates. The models assess ECL on the
basis of forward-looking macroeconomic forecasts and other inputs. For most financial assets, the expected
life is limited to the remaining maturity. For overdrafts and certain revolving credit facilities, such as credit
cards, the maturity is estimated based on historical data as these do not have a fixed term or repayment
schedule.
Individually assessed assets (Stage 3)
ING Bank estimates ECL for individually significant credit-impaired financial assets within Stage 3 on an
individual basis. ECL for these Individually assessed assets are determined using the discounted expected
future cash flow method. To determine expected future cash flows, one or more scenarios are used. Each
scenario is analysed based on the probability of occurrence and includes forward looking information.
In determining the scenarios, all relevant factors impacting the future cash flows are taken into account.
These include expected developments in credit quality, business and economic forecasts, and estimates of
if/when recoveries will occur taking into account ING Bank’s restructuring/recovery strategy.
The best estimate of ECL is calculated as the weighted-average of the shortfall (gross carrying amount
minus discounted expected future cash flow using the original EIR) per scenario, based on best estimates of
expected future cash flows. Recoveries can arise from, among others, repayment of the loan, collateral
recovery and the sale of the asset. Cash flows from collateral and other credit enhancements are included in
the measurement of ECL of the related financial asset when it is part of or integral to the contractual terms
of the financial asset and the credit enhancement is not recognised separately. For the individual
assessment, with granular (company or asset-specific) scenarios, specific factors can have a larger impact
on the future cash flows than macroeconomic factors.
When a financial asset is credit-impaired, interest is no longer recognised based on the accrual income
based on the gross carrying amount of the asset. Rather, interest income is calculated by applying the
original EIR to the AC of the asset, which is the gross carrying amount less the related loan loss provision.
Purchased or Originated Credit Impaired (POCI) assets
POCI assets are financial assets that are credit-impaired on initial recognition. Impairment on a POCI asset is
determined based on lifetime ECL from initial recognition. POCI assets are recognised initially at an amount
net of ECL and are measured at AC using a credit-adjusted effective interest rate. In subsequent periods any
changes to the estimated lifetime ECL are recognised in profit or loss. Favourable changes are recognised as
an impairment gain even if the lifetime ECL at the reporting date is lower than the estimated lifetime ECL at
origination.
Write-off and debt forgiveness
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
of recovery and/or collectability of amounts due. The following events can lead to a write-off:
• After a restructuring has been completed and there is a high improbability of recovery of part of the
remaining loan exposure (including partial debt forgiveness);
• In a bankruptcy liquidation scenario;
• After divestment or sale of a credit facility at a discount;
• Specific fraud cases with no recourse options.
When a loan is uncollectable, it is written off against the related loan loss provision. Subsequent recoveries
of amounts previously written off are recognised in ‘Addition to loan loss provisions’ in the Consolidated
statement of profit or loss.
Debt forgiveness (or debt settlement) involves write-off but additionally involves the forgiveness of a legal
obligation, in whole or in part. This means that ING Bank forfeits the legal right to recover the debt. As a
result, the financial asset needs to be derecognised.
Presentation of ECL
ECL for financial assets measured at AC are deducted from the gross carrying amount of the assets. For
debt instruments at FVOCI, the ECL is recognised in OCI, instead of deducted the carrying amount of the
asset. ECL also reflects any credit losses related to the portion of the loan commitment that is expected to
be drawn down over the remaining life of the instrument. The ECL on issued financial guarantee contracts,
in scope of IFRS 9 and not measured at FVPL, are recognised as liabilities and presented in Other provisions.
ECL are presented in profit or loss in Addition to loan loss provision.

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Significant judgements and critical accounting estimates and assumptions: The calculation of ECL requires a number of judgements and estimates. In particular: • ING Bank makes various assumptions about the risk of default, the credit loss rates in case of a default and expected future cash flows. For collective provisions, ING Bank applies significant judgement when estimating modelled parameters such as PD, LGD and EAD, including the selection and calibration of relevant models. For stage 3 individual provisioning, the determination and probabilities of restructuring and recovery scenarios as well as the amount and timing of expected future cash flows may be particularly subjective. • Forward-looking macroeconomic scenarios used in impairment assessments are uncertain in nature. The use of alternate forward-looking macroeconomic scenarios can produce significantly different estimates of ECL. This is demonstrated in the sensitivity analysis in the ‘Risk Management’ section of the Annual Report, where the un-weighted ECL under each of the three scenarios for some significant portfolios is disclosed. • When determining whether the credit risk on a financial asset has increased significantly (criteria for identifying a significant increase in credit risk), ING Bank considers reasonable and supportable information to compare the risk of default occurring at reporting date with the risk of a default occurring at initial recognition of the financial asset. Whilst judgement is required in applying a PD rating to each financial asset, there is significant judgement used in determining the Stage allocation PD banding thresholds. The process of comparing a financial asset’s PD with the PD banding thresholds determines its ECL Stage. Assets in Stage 1 are allocated a 12 month ECL, and those in Stage 2 are allocated a lifetime ECL, and the difference is often significant. As such, the judgement made in assigning financial asset PDs and the PD banding thresholds constitute a significant judgement. Analysis of the sensitivity associated with the assessment of significant increase in credit risk is presented in the ‘Risk Management’ section of the Annual Report. • Judgement is exercised in management’s evaluation of whether there is objective evidence that exposures are credit-impaired. • To reflect the risks that are not properly captured by the ECL models, a number of management adjustments to the model-based ECL were necessary as at 31 December 2023, which required significant judgement. Reference is made to the ‘Management adjustments applied this year’ paragraph in the ‘Risk management’ section of the Annual Report.

1.5.7 Modification of financial instruments
In certain circumstances ING Bank grants borrowers postponement, reduction of loan principal and/or
interest payments on a temporary period of time to maximise collection opportunities, and if possible, avoid
default, foreclosure, or repossession. When such postponement, reduction of loan principal and/or interest
payments is executed based on credit concerns it is also referred to as forbearance (refer to the ‘Risk
Management’ section of the Annual Report for more details) and requires analysis on whether the
contractual terms have been substantially modified or not. A similar assessment is needed when
contractual terms are modified for other reasons than forbearance.
ING Bank determines whether there has been a substantial modification using both quantitative and
qualitative factors. If the modification results in a substantial modification of the terms of the loan, the
original loan is derecognised and a new loan is recognised at fair value at the modification date. In case of a
non-substantial modification, a modification gain or loss is recognised in profit or loss.
1.5.8 Accounting for Targeted Longer-Term Refinancing Operations (TLTRO)
ING Bank participates in Targeted Longer-Term Refinancing Operations (TLTRO III). ING Bank considers TLTRO
funding provided by the ECB to banks to be on market terms on the basis that the ECB has established a
separate market with TLTRO programmes. They have specific terms which are different from other sources
of funding available to banks, including those provided by the ECB. Consequently, the rate under TLTRO is
considered to be a market conforming rate and TLTRO funding is recognised fully as a financial liability.
ING Bank interprets the whole rate set by the ECB under TLTRO as a floating rate on the financial liability,
being the market rate for each specific period in time. This results in discrete rates for discrete interest
periods over the life of TLTRO. The change in the applicable rate between interest periods is seen as a
change in the floating rate and is accounted for prospectively. Similarly, if the ECB announces changes in
the rate for the amounts already drawn under the existing TLTRO, then such changes also represent a
change in a floating rate. Following this, such changes lead to the recognition of an increased/decreased
interest in the relevant period of life of the exposure, rather than by the recognition of an immediate
modification gain or loss at the moment of the change of terms by the ECB. If the change relates to the
periods already passed, the impact for those past periods is recognised in profit or loss immediately.
Furthermore, the change in the TLTRO rate driven by changes in expectations of meeting the targets
impacts interest income. As a result, interest income which relates to the period that already passed until
the moment when the change in expectations occurs, is recognised as a catch up adjustment in
Consolidated statement of profit or loss. This change occurs only when ING Bank has a reasonable
expectation that the lending targets will be met.
ING Bank views ‘reasonable expectation’ in case of TLTRO funding as a high hurdle. This is the moment when
it becomes highly probable, i.e. the probability of meeting the lending targets is substantially greater than

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ING Bank Annual Report 2023 137
the probability that it will not. As a result, if interest income is recognised during the period based on the
expectation of meeting the targets, there should only be a limited possibility that the interest may need to
be reversed in future reporting periods. Reference is made to note 12 ‘Deposits from banks’ and to note 20
‘Net interest income’ for the presentation of ING Bank’s participation in TLTRO programmes.

Significant judgements: Significant management judgement is exercised in determining the accounting treatment of TLTRO transactions. In particular, ING Bank applied judgement in: • assessing and concluding that in ING Bank'’s view the rate under TLTRO is considered to be a market conforming rate and, hence, accounting for TLTRO in accordance with IFRS 9; and • selecting accounting policies regarding the calculation of the effective interest rate under TLTRO.

1.6 Consolidation
ING Bank comprises ING Bank N.V. (the Parent Company) and all other subsidiaries. Subsidiaries are entities
controlled by ING Bank N.V. Control exists if ING Bank N.V. is exposed or has rights to variable returns and
has the ability to affect those returns through the power over the subsidiary.
For interests in structured entities, the existence of control requires judgement as these entities are
designed so that voting or similar rights are not the dominant factor in deciding who controls the entity. This
judgement includes, for example, the involvement in the design of the structured entity, contractual
arrangements that give rights to direct the structured entities relevant activities and commitment to ensure
that the structured entity operates as designed.
A list of principal subsidiaries is included in Note 41 ‘Principal subsidiaries’ and a description of ING's activities
involving structured entities is included in Note 42 'Structured entities'.
A list containing the information referred to in Section 379 (1), Book 2 of the Dutch Civil Code has been filed
with the office of the Commercial Register of Amsterdam, in accordance with Section 379 (5), Book 2 of the
Dutch Civil Code.
ING Bank N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of
dividends they can pay to their shareholders. The Dutch Civil Code contains the restriction that dividends
can only be paid up to an amount equal to the excess of the company’s own funds over the sum of the
paid-up capital and reserves required by law. Certain Group companies are also subject to other restrictions
in certain countries, in addition to the restrictions on the amount of funds that may be transferred in the
form of dividends, or otherwise, to the parent company.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by
industry regulators in the countries in which the subsidiaries operate, other limitations exist in certain
countries.
1.7 Segment reporting
An operating segment is a distinguishable component of ING Bank, engaged in providing products or
services, whose operating results are regularly reviewed by the Management Board Banking of ING Bank
(the Chief Operating Decision Maker (CODM)) to make decisions about resources to be allocated to the
segments and assess its performance. A geographical area is a distinguishable component of ING Bank
engaged in providing products or services within a particular economic environment that is subject to risks
and returns that differ from those of segments operating in other economic environments.
The CODM reviews and assesses ING Bank's performance primarily by line of business. As a result, ING
identified five operating segments which are are also disclosed as reportable segments. Additionally, the
CODM receives information by geographical area based on the location of the office from which transactions
are originated.
1.8 Hyperinflation accounting
Since the second quarter of 2022, Türkiye has been considered a hyperinflationary economy for accounting
purposes. As ING Bank has a subsidiary in Türkiye, ING Bank applies IAS 29 ‘Financial Reporting in
Hyperinflationary Economies’ since 2022 to its operations as if the economy in Türkiye had always been
hyperinflationary. Given that ING Bank presents its results in EUR, comparatives do not get restated. As a
result, 2021 comparatives were not impacted by IAS 29, while 2022 comparatives show the impact of the
first-time application of IAS 29, as well as the effect for 2022. IAS 29 continued to be relevant for ING’s
operations in Türkiye in 2023. Under IAS 29, the results of the operations in Türkiye should be stated in
terms of the current purchasing power at the reporting date. For that, the consumer price index (CPI) as
determined by the Turkish Statistical Institute was used. The CPI for Türkiye (2003=100) at 31 December
2023 was 1,859.38 and at 31 December 2022 was 1,128.45 (movement 2023: 64.77%; movement 2022:
64.27%). The effect of such restatement for inflation in the current period of the statement of
comprehensive income and the balance sheet has been recognised in the statement of profit or loss within
‘Other net income’ as a ‘Net monetary gain or loss’. The net monetary loss for the period represents the loss
of purchasing power by the net monetary position (monetary assets exceeding monetary liabilities) of ING
Türkiye.
After the application of the above restatement procedures in Turkish Lira under IAS 29, the financial position
and the results for the period of ING Türkiye are translated and presented in EUR at the exchange rate on 31

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ING Bank Annual Report 2023 138
December 2023. For the statement of comprehensive income this is in contrast with the usual translation
procedures where items of comprehensive income are translated at the exchange rate at the date of
transaction. Furthermore, ING Bank selected to present both the restatement effect resulting from restating
ING Bank’s interest in the equity of ING Türkiye as required by IAS 29, and the translation effect from
translating at a closing rate that differs from the previous closing rate, in the Currency translation reserve.
1.9 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of ING Bank’s entities are measured using the currency of
the primary economic environment in which the entity operates (the functional currency). The Consolidated
financial statements are presented in euros, which is ING Bank’s presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing
at the date of the transactions. Exchange rate differences resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the statement of profit or loss, except when deferred in
equity as part of qualifying cash flow hedges or qualifying net investment hedges.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction.
Exchange rate differences on non-monetary items, measured at fair value through profit or loss, are
reported as part of the fair value gain or loss. Non-monetary items are retranslated at the date the fair
value is determined. Exchange rate differences on non-monetary items measured at fair value through
other comprehensive income are included in other comprehensive income and get accumulated in the
revaluation reserve in equity.
Exchange rate differences in the statement of profit or loss are generally included in ‘Valuation results and
net trading income’. Reference is made to Note 22 ‘Valuation results and net trading income’, which
discloses the amounts included in the statement of profit or loss. Exchange rate differences relating to the
disposal of debt and FVPL equity securities are considered to be an inherent part of the capital gains and
losses recognised in Investment income. As mentioned below, in Group companies relating to the disposals
of group companies, any exchange rate difference deferred in equity is recognised in the statement of profit
or loss in ‘Result on disposal of group companies’. Reference is also made to Note 19 ‘Equity’, which discloses
the amounts included in the statement of profit or loss.
Group companies
The results and financial positions of all group companies that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing rate at the date of the statement of financial position;
• Income and expenses are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions). However, under hyperinflation
accounting, income and expenses of ING Türkiye are translated at the closing rate; and
• All resulting exchange rate differences are recognised in a separate component of equity.
On consolidation, exchange rate differences arising from the translation of a monetary item that forms part
of the net investment in a foreign operation, and of borrowings and other instruments designated as
hedges of such investments, are taken to shareholders’ equity. When a foreign operation is sold, the
corresponding exchange rate differences are recognised in the statement of profit or loss as part of the gain
or loss on sale.
Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets
and liabilities of the foreign operation and translated at the exchange rate prevailing at the balance sheet
date.
1.10 Investments in associates and joint ventures
Associates are all entities over which ING Bank has significant influence but not control. Significant influence
is the ability to participate in the financial and operating policies of the investee. It generally results from a
shareholding of between 20% and 50% of the voting rights or through situations including, but not limited
to one or more of the following:
• Representation on the board of directors;
• Participation in the policymaking process; and
• Interchange of managerial personnel.
Joint ventures are entities over which ING Bank has joint control.
Investments in associates and joint ventures are initially recognised at cost and subsequently accounted for
using the equity method of accounting.
ING Bank’s investment in associates and joint ventures (net of any accumulated impairment loss) includes
goodwill identified on acquisition. ING Bank’s share of its associates and joint ventures post-acquisition
profits or losses is recognised in the statement of profit or loss, and its share of post-acquisition changes in

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ING Bank Annual Report 2023 139
reserves is recognised in equity. The cumulative post-acquisition changes are adjusted against the carrying
amount of the investment. When ING Bank’s share of losses in an associate or joint venture equals or
exceeds its interest in the associate or joint venture, including any long-term interests in the associate like
uncollateralised loans that are neither planned nor likely to be settled in the foreseeable future, ING Bank
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between ING Bank and its associates and joint ventures are eliminated to
the extent of ING Bank’s interest in the associates and joint ventures. Unrealised losses are also eliminated
unless they provide evidence of an impairment of the asset transferred. Accounting policies of associates
and joint ventures have been changed where necessary to ensure consistency with the policies adopted by
ING Bank.
The recoverable amount, being the higher of fair value less cost of disposal and value in use, of the
investment in associate and joint venture is determined when there is an indication of potential (reversal of)
impairment. An impairment loss is recognised when the carrying amount of the investment exceeds its
recoverable amount. Goodwill on acquisitions of interests in associates and joint ventures is not tested
separately for impairment, but is assessed as part of the carrying amount of the investment. An impairment
loss is subsequently reversed if there is indication of a reversal and there is a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed to the extent that the recoverable
amount exceeds its carrying amount, but cannot exceed the original impairment loss.
The reporting dates of certain associates and joint ventures can differ from the reporting date of the Group,
but by no more than three months.

Significant judgements and critical accounting estimates and assumptions: Identification of impairment indicators as well as indicators of potential reversal of previous impairments of ING Bank’s investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), an associate, requires significant judgement. When there is objective evidence of impairment or indicators that prior period impairment losses no longer exist or may have decreased, value in use (VIU) needs to be determined. Estimation of VIU involves significant estimates and management assumptions. Please refer to note 8 ‘Investments in associates and joint ventures’.

1.11 Property and equipment
Property in own use
Land and buildings held for own use are stated at fair value at the balance sheet date. Depreciation is
recognised on a straight-line basis over the estimated useful life (in general 20–50 years). On disposal, the
related revaluation reserve is transferred to retained earnings.
Equipment
Equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of the
assets is depreciated on a straight line basis over their estimated useful lives, which are generally as follows:
for data processing equipment two to five years, and four to ten years for fixtures and fittings.
Disposals of property and equipment
The difference between the proceeds on disposal and net carrying value is recognised in the statement of
profit or loss under Other net income.
Right-of-use assets
ING Bank as the lessee
A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset
and a corresponding liability representing its obligation to make lease payments at the date at which the
leased asset is available for use by ING Bank. Each lease payment is allocated between the repayment of
the liability and finance cost. The finance costs are charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period. The
right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-
line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or a rate;
• Amounts expected to be payable by the lessee under residual value guarantees;
• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that
option.

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ING Bank Annual Report 2023 140
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease
liability, any lease payments made at or before the commencement date less any lease incentives received
and any initial direct costs and restoration costs.
The right-of-use asset is included in the statement of financial position line-item ‘Property and equipment’,
the lease liability is included in the statement of financial position line-item ‘Other liabilities’. Refer to Note 9
‘Property and equipment’ and to Note 16 ‘Other liabilities’.
Subsequent to initial recognition, the right-of-use asset amortises using a straight-line method to the
income statement over the life of the lease. The lease liability increases for the accrual of interest and
decrease when payments are made. Any remeasurement of the lease liability due to a lease modification
or other reassessment results in a corresponding adjustment to the carrying amount of the right-of-use
asset.
1.12 ING Bank as lessor
When ING Bank acts as a lessor, a distinction should be made between finance leases and operating leases.
For ING Bank as a lessor these are mainly finance leases and are therefore not included in 'Property and
equipment'. Instead, the present value of the lease payments is recognised as a receivable under Loans and
advances to customers or Loans and advances to banks. The difference between the gross receivable and
the present value of the receivable is unearned finance lease income. Lease income is recognised over the
term of the lease using the net investment method (before tax), which reflects a constant periodic rate of
return.
1.13 Goodwill and other intangible assets
Impairment of goodwill and other non-financial assets
ING Bank assesses at each reporting period, whether there is an indication that a non-financial asset may be
impaired. Irrespective of whether there is an indication of impairment, intangible assets with an indefinite
useful life, including goodwill acquired in a business combination, and intangible assets not yet available for
use, are tested annually for impairment. Goodwill is allocated to groups of cash generating units (CGUs) for
the purpose of impairment testing. These groups of CGUs represent the lowest level at which goodwill is
monitored for internal management purposes. Goodwill is tested for impairment by comparing the carrying
value of the group of CGUs to the recoverable amount of that group of CGUs. Impairment of goodwill, if
applicable, is included in the statement of profit or loss in Other operating expenses and is not subsequently
reversed.
Computer software
Computer software that has been purchased or generated internally for own use is stated at cost less
amortisation and any impairment losses. Amortisation is calculated on a straight-line basis over its useful
life which generally does not exceed five years. Amortisation is included in Other operating expenses.
1.14 Taxation
Income tax on the result for the year consists of current and deferred tax. Income tax is recognised in the
statement of profit or loss but it is recognised directly in equity if the tax relates to items that are recognised
directly in equity.
Uncertain tax positions are assessed continually by ING Bank and in case it is probable that there will be a
cash outflow, a current tax liability is recognised.
Deferred income tax
Deferred income tax is provided in full, using the liability method, for temporary differences arising between
the tax basis of assets and liabilities and their carrying amounts in the Consolidated statement of financial
position. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted at the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities
are not discounted.
Deferred tax assets are recognised when it is probable that future taxable profit will be available against
which the temporary differences can be utilised. Deferred income tax is provided for temporary differences
arising from investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by ING Bank and it is probable that the difference will not reverse in the
foreseeable future. The tax effects of income tax losses available for carry forward are recognised as an
asset where it is probable that future taxable profits will be available against which these losses can be
utilised.
Fair value remeasurements of debt and equity instruments measured at FVOCI and cash flow hedges are
recognised directly in equity. Deferred tax related to this fair value remeasurement is also recognised
directly in equity and is subsequently recognised in the statement of profit or loss together with the
deferred gain or loss.

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ING Bank Annual Report 2023 141
1.15 Provisions, contingent liabilities and contingent assets
A provision is a present obligation arising from past events, the settlement of which is expected to result in
an outflow of resources embodying economic benefits, however the timing or the amount is uncertain.
Provisions are discounted when the effect of the time value of money is significant using a pre-tax discount
rate.
Reorganisation provisions include employee termination benefits when ING Bank is demonstrably
committed to either terminate the employment of current employees according to a detailed formal plan
without possibility of withdrawal, or providing termination benefits as a result of an offer made to
encourage voluntary redundancy.
A liability is recognised for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the liability is recognised
only upon reaching the specified minimum threshold.
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of ING Bank; or a present obligation that arises from past events but is not recognised
because it is either not probable that an outflow of economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured reliably. Contingent liabilities are not
recognised in the statement of financial position, but are rather disclosed in the notes unless the possibility
of the outflow of economic benefits is remote.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of ING Bank. Contingent assets are recognised in the statement of financial position only when
realisation of the income that arises from such an asset is virtually certain. Contingent assets are disclosed
in the notes when an inflow of economic benefits is probable.

Significant judgements and critical accounting estimates and assumptions: The recognition and measurement of provisions is an inherently uncertain process involving using judgement to determine when a present obligation exists and estimates regarding probability, amounts and timing of cash flows. ING Bank may become involved in governmental, regulatory, arbitration and legal proceedings and investigations and may be subject to third party claims. With or without reference to the above, ING Bank may also offer compensation to certain of its customers. Judgement is required to assess whether a present obligation exists and to estimate the probability of an unfavourable outcome and the amount of potential loss. The degree of uncertainty and the method of making the accounting estimate depends on the individual case, its nature and complexity. Such cases are usually one of a kind. For the assessment of related provisions ING Bank consults with internal and external legal experts. Even taking into consideration legal experts’ advice, the probability of an outflow of economic benefits can still be uncertain and the provision recognised can remain sensitive to the assumptions used. Reference is made to Note 15 'Provisions'. For proceedings where it is not possible to make a reliable estimate of the expected financial effect, that could result from the ultimate resolution of the proceedings, no provision is recognised, however disclosure is included in the financial statements, where relevant. Reference is made to Note 39 'Legal proceedings'. Critical accounting estimates and assumptions for the reorganisation provision are in estimating the amounts and timing of cash flows as the announced transformation initiatives are implemented over a period of several years. Reference is made to Note 15 'Provisions'.

1.16 Irrevocable Payment Commitments on contributions to SRF and DGS
ING makes contributions to the Single Resolution Fund (SRF) and Deposit Guarantee Schemes (DGS). The
annual contributions are paid in cash or, in some cases, partly using Irrevocable Payment Commitments
(IPCs) that become payable if and when called. Cash contributions are accounted for as levies as described
in section 1.15 above while IPCs are disclosed as contingent liabilities in Note 38 Contingent liabilities and
commitments. Cash collateral posted on IPCs to the SRF is accounted for as an interest bearing financial
asset at amortised cost. Government bonds posted as collateral on IPCs to DGS continue to be recognised as
assets of ING as securities at amortised cost.

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ING Bank Annual Report 2023 142
1.17 Other liabilities
Defined benefit plans
The net defined benefit asset or liability recognised in the statement of financial position in respect of
defined benefit pension plans is the fair value of the plan assets less the present value of the defined benefit
obligation at the balance sheet date.
Changes in plan assets include mainly:
• Return on plan assets are recognised as staff costs in the statement of profit or loss. It is determined
using a high quality corporate bond rate (identical to the discount rate used in determining the defined
benefit obligation) at the start of the reporting period; and
• Remeasurements which are recognised in Other comprehensive income.
The defined benefit obligation is calculated by internal and external independent qualified actuaries through
actuarial models and calculations using the projected unit credit method. This method considers expected
future payments required to settle the obligation resulting from employee service in the current and prior
periods, discounted using a high quality corporate bond rate. Inherent in these actuarial models are
assumptions including discount rates, rates of increase in future salary and benefit levels, mortality rates,
consumer price index and the expected level of indexation. The assumptions are based on available market
data as well as management expectations and are updated regularly.
Changes in the defined benefit obligation include mainly:
• Service cost which is recognised as staff costs in the statement of profit or loss;
• Interest expenses are recognised as staff costs in the Statement of profit or loss. It is determined using a
high quality corporate bond rate at the start of the period;
• Remeasurements which are recognised in Other comprehensive income (equity) and not recycled to the
Statement of profit or loss;
• Any past service cost relating to a plan amendment is recognised in profit or loss in the period of the plan
amendment; and
• Gains and losses on curtailments and settlements are recognised in the Statement of profit or loss when
the curtailment or settlement occurs.
The recognition of a net defined benefit asset in the Consolidated statement of financial position is limited
to the present value of any economic benefits available in the form of refunds from the plans or reductions
in future contributions to the plans.
Defined contribution plans
For defined contribution plans, ING Bank pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual or voluntary basis. ING Bank has no further payment
obligations once the contributions have been paid. The contributions are recognised as staff expenses in the
profit or loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Other post-employment obligations
Some group companies provide other post-employment benefits to former employees. The entitlement to
these benefits is usually conditional on the employee remaining in service up to retirement age and the
completion of a minimum service period. The expected costs of these benefits are accrued over the period
of employment using an accounting methodology similar to that for defined benefit pension plans.
1.18 Income recognition
Interest
Interest income and expense are recognised in the statement of profit or loss using the effective interest
method. The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability and of allocating the interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through
the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying
amount of the financial asset or financial liability. When calculating the effective interest rate, ING Bank
estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment
options) but does not consider future credit losses.
The calculation includes all fees and points paid or received between parties to the contract that are an
integral part of the effective interest rate, transaction costs and all other premiums or discounts. Once a
financial asset or a group of similar financial assets has been written down as a result of an impairment loss,
interest income is recognised using the rate of interest used to discount the future cash flows for the
purpose of measuring the impairment loss.
Interest results on instruments classified at Amortised Cost, assets measured at FVOCI and derivatives in a
formal hedge accounting relationship is presented in ‘Interest income (expense) using effective interest rate
method’. Interest result on financial assets and liabilities voluntarily designated as at FVPL and derivatives in
so called economic hedges and instruments designated at fair value are presented in ‘Other interest income
(expense)’. Interest result on all other financial assets and liabilities at FVTPL is recognised in ‘Valuation
results and net trading income’.
Fees and commissions
Fees and commissions are generally recognised as the service is provided. Loan commitment fees for loans
that are likely to be drawn down are deferred (together with related direct costs) and recognised as an
adjustment to the effective interest rate on the loan. Loan syndication fees are recognised as income when
the performance obligation has been satisfied based on the particular contract and ING Bank has retained

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 143
no part of the loan package for itself or has retained a part at the same effective interest rate as the other
participants. Commission and fees arising from negotiating, or participating in the negotiation of, a
transaction for a third party – such as the arrangement of the acquisition of shares or other securities or the
purchase or sale of businesses – are recognised on completion of the underlying transaction. Portfolio and
other management advisory and service fees are recognised based on the applicable service contracts as
the service is provided. Asset management fees related to investment funds and investment contract fees
are recognised on a pro-rata basis over the period the service is provided. The same principle is applied for
wealth management, financial planning and custody services that are continuously provided over an
extended period of time. Fees received and paid between banks for payment services are classified as
commission income and expenses.
Lease income
The proceeds from leasing out assets under operating leases are recognised on a straight-line basis over the
life of the lease agreement. Lease payments received in respect of finance leases when ING Bank is the
lessor are divided into an interest component (recognised as interest income) and a repayment component
based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.
1.19 Expense recognition
Expenses are recognised in the statement of profit or loss as incurred or when a decrease in future
economic benefits related to a decrease in an asset or an increase in a liability has arisen that can be
measured reliably. Fee and commission expenses are generally a result from a contract with ING service
providers in order to perform the service for ING Bank’s customers. Costs are generally presented as
‘Commission expenses’ if they are specific, incremental, directly attributable and identifiable to generate
commission income.
Share-based payments
ING Bank only engages in share-based payment transactions with its staff and directors. Share-based
payment expenses are recognised as a staff expense over the vesting period. A corresponding increase in
equity is recognised for equity-settled share-based payment transactions. A liability is recognised for cash-
settled share-based payment transactions. The fair value of equity-settled share-based payment
transactions are measured at the grant date, and the fair value of cash-settled share-based payment
transactions are measured at each balance sheet date. Rights granted will remain valid until the expiry
date, even if the share based payment scheme is discontinued. The rights are subject to certain conditions,
including a pre-determined continuous period of service.
1.20 Statement of cash flows
The statement of cash flows is prepared in accordance with the indirect method, distinguishing cash flows
from operating, investing and financing activities. In the net cash flow from operating activities, the result
before tax is adjusted for those items in the statement of profit or loss and changes in items per the
statement of financial position, which do not result in actual cash flows during the year.
For the purposes of the statement of cash flows, Cash and cash equivalents include deposits from banks and
loans and advances to banks that are on demand. Furthermore, it includes treasury bills and other eligible
bills shorter than three months. Investments qualify as a cash equivalent if they are readily convertible to a
known amount of cash and are subject to an insignificant risk of changes in value.
Cash flows arising from foreign currency transactions are translated into the functional currency using the
exchange rates at the date of the cash flows.
The net cash flow shown in respect of Loans and advances to customers relates only to transactions
involving actual payments or receipts. The Addition to loan loss provision which is deducted from the item
Loans and advances to customers in the statement of financial position has been adjusted accordingly from
the result before tax and is shown separately in the statement of cash flows.
The difference between the Net cash flow in accordance with the statement of cash flows and the change
between the opening and closing balance of Cash and cash equivalents in the statement of financial
position is due to exchange rate differences and is presented separately in the cash flow statement.
Liabilities arising from financing activities are debt securities, lease liabilities and subordinated loans.
1.21 Parent company accounts
The parent company accounts of ING Bank N.V. are prepared in accordance with the financial reporting
requirements included in Part 9 of Book 2 of the Dutch Civil Code. In accordance with subsection 8 of section
362, Book 2 of the Dutch Civil Code, the recognition and measurement principles applied in the Parent
company accounts are the same as those applied in the Consolidated financial statements.

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> 1 Basis of preparation and material accounting policy information
ING Bank Annual Report 2023 144
Notes to the Consolidated statement of financial position
2 Cash and balances with central banks

Cash and balances with central banks
in EUR million | 2023 | 2022
Amounts held at central banks 1 | 88,627 | 85,934
Cash and bank balances | 1,587 | 1,681
| 90,214 | 87,614

1 Amounts held at central banks include an amount of EUR -5 million (2022: EUR -12 million) of Loan loss provisions.
Amounts held at central banks reflect on demand balances. The movement reflects ING’s active liquidity
management.
Reference is made to Note 36 'Transfer of financial assets, assets pledged and received as collateral' for
restrictions on amounts held at central banks.
3 Loans and advances to banks

Loans and advances to banks
| Netherlands | Rest of the world | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Loans and advances to banks | 9,452 | 23,462 | 7,286 | 11,679 | 16,738 | 35,140
Loan loss provisions | -11 | -12 | -18 | -26 | -30 | -37
| 9,440 | 23,450 | 7,268 | 11,653 | 16,708 | 35,103

Loans and advances mainly include balances of reverse repurchase transactions, term loans and cash
collateral transactions. For more information on the balance of reverse repurchase transactions refer to
Note 4 'Financial assets at fair value through profit or loss'. Reference is made to Note 7 'Loans and
advances to customers' for information on finance lease receivables included in Loans and advances to
banks.
As at 31 December 2023 and at 31 December 2022, all loans and advances to banks are non-subordinated.
4 Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss
in EUR million | 2023 | 2022
Trading assets | 60,240 | 56,875
Non-trading derivatives | 2,028 | 3,893
Designated at fair value through profit or loss | 5,775 | 6,159
Mandatorily measured at fair value through profit or loss | 54,983 | 46,844
| 123,026 | 113,770

(Reverse) repurchase transactions
Financial assets at fair value through profit or loss includes securities lending and sales and repurchase
transactions with securities. At ING, these types of transactions are recognised in several lines in the
statement of financial position depending on business model assessment and counterparty. Furthermore,
for repurchase agreements the gross amount of assets must be considered together with the gross amount
of related liabilities, which are presented separately on the statement of financial position since IFRS does
not always allow netting of these positions in the statement of financial position.
Securities purchased under agreements to resell (reverse repos), securities borrowings and similar
agreements are not recognised in the consolidated statement of financial position as the counterparty
continues to be exposed to substantially all risks and rewards of the transferred security. Based on the
business model assessment and counterparty, the consideration paid to purchase securities is recognised as
Loans and advances to customers, Loans and advances to banks, financial assets mandatorily at FVPL or
Trading assets.
Securities sold subject to repurchase agreements (repos), securities lending and similar agreements
continue to be recognised in the consolidated statement of financial position as ING Bank continues to be
exposed to substantially all risks and rewards of the transferred financial asset. The counterparty liability is
designated and measured at FVPL if the asset is measured at FVPL. Otherwise, the counterparty liability is
included in Deposits from banks, Customer deposits or Trading.

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> 2 Cash and balances with central banks
ING Bank Annual Report 2023 145
Reference is made to Note 39 'Transfer of financial assets, assets pledged and received as collateral' for
information on transferred assets which were not derecognised.
ING Bank’s exposure to (reverse) repurchase transactions is included in the following lines in the statement
of financial position:

Exposure to (reverse) repurchase agreements
in EUR million | 2023 | 2022
Reverse repurchase transactions |  |
Loans and advances to banks | 5,251 | 19,395
Loans and advances to customers | 499 | 1,306
Trading assets, loans and receivables | 12,121 | 9,732
Loans and receivables mandatorily measured at fair value through profit or loss | 51,536 | 43,153
| 69,407 | 73,587
Repurchase transactions |  |
Deposits from banks | 2,064 | 3,809
Customer deposits | 97 | 1
Trading liabilities, funds on deposit | 10,337 | 5,715
Funds entrusted designated and measured at fair value through profit or loss | 45,729 | 43,131
| 58,227 | 52,655

Trading assets

Trading assets by type
in EUR million | 2023 | 2022
Equity securities | 15,423 | 11,741
Debt securities | 6,907 | 4,189
Derivatives | 25,680 | 30,841
Loans and receivables | 12,231 | 10,103
| 60,240 | 56,875

Trading assets include assets that are closely related to servicing the needs of the clients of ING Bank. ING
offers institutional clients, corporate clients, and governments, products that are traded on the financial
markets. A significant part of the derivatives in the trading portfolio is related to servicing corporate clients
in their risk management to hedge for example currency or interest rate exposures. In addition, ING provides
its customers access to equity and debt markets for issuing their own equity or debt securities (securities
underwriting).
Reference is made to Note 14 'Financial liabilities at fair value through profit or loss' for information on
trading liabilities.
Non-trading derivatives

Non-trading derivatives by type
in EUR million | 2023 | 2022
Derivatives used in |  |
- fair value hedges | 716 | 836
- cash flow hedges | 440 | 814
- hedges of net investments in foreign operations | 100 | 119
Other non-trading derivatives | 771 | 2,124
| 2,028 | 3,893

Reference is made to Note 33 'Derivatives and hedge accounting' for information on derivatives designated
in hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign exchange currency swaps for
which no hedge accounting is applied.
Designated at fair value through profit or loss

Designated at fair value through profit or loss by type
in EUR million | 2023 | 2022
Debt securities | 4,470 | 5,437
Loans and receivables | 1,306 | 722
| 5,775 | 6,159

‘Financial assets designated at fair value through profit or loss’ is partly economically hedged by credit
derivatives. The hedges do not meet the criteria for hedge accounting and the loans and debt securities are
recorded at fair value to avoid an accounting mismatch. The maximum credit exposure of the loans and
receivables and debt securities included in ‘Financial assets designated at fair value through profit or loss’
approximates its carrying value and amounts to EUR 5,775 million (2022: EUR 6,159 million). In 2023, the
change in fair value of these loans and debt securities amounts EUR -48 million (2022: EUR 357 million).

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> 4 Financial assets at fair value through profit or loss
ING Bank Annual Report 2023 146
ING has mitigated the credit risk exposure on some of the portfolio. The cost at initial recognition of the
financial assets designated at fair value through profit or loss that are economically hedged by credit
derivatives is EUR 3,181 million (31 December 2022: EUR 3,051 million and the cumulative change in fair
value attributable to changes in credit risk is EUR 150 million (31 December 2022: EUR 150 million).
The notional value of the related credit derivatives is EUR 3,679 million (2022: EUR 3,370 million).The
cumulative change in fair value of the credit derivatives since the financial assets were first designated,
amounts to EUR -119 million (2022: EUR 3 million) and the change for the current year is EUR -122 million
(2022: EUR 72 million).
The changes in fair value attributable to changes in credit risk have been calculated by determining the
changes in credit spread implicit in the fair value of loans and bonds issued by entities with similar credit
characteristics.
Mandatorily at fair value through profit or loss

Mandatorily at fair value through profit or loss by type
in EUR million | 2023 | 2022
Equity securities | 179 | 203
Debt securities | 894 | 821
Loans and receivables | 53,911 | 45,820
| 54,983 | 46,844

Equity securities are individually insignificant for ING Bank. For debt securities total exposure reference is
made to Note 6 'Debt securities'. Loans and receivables include mainly reverse repurchase agreements.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss (31 December 2023: EUR 538 million). For further information
on the change in accounting policies, reference is made to Note 1 'Basis of preparation and material
accounting policy information'.
5 Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income by type
in EUR million | 2023 | 2022
Equity securities | 1,885 | 1,887
Debt securities 1 | 38,281 | 29,095
Loans and advances 1 | 951 | 643
| 41,116 | 31,625

1 Debt securities include an amount of EUR -13 million (2022: EUR -21 million) and the Loans and advances includes EUR -8 million
( 2022: EUR -1 million) of Loan loss provisions.
Exposure to equity securities

Equity securities designated as at fair value through other comprehensive income |
| Carrying value | Carrying value | Dividend income | Dividend income
in EUR million | 2023 | 2022 | 2023 | 2022
Investment in Bank of Beijing | 1,590 | 1,614 | 98 | 111
Other Investments | 295 | 273 | 7 | 38
| 1,885 | 1,887 | 105 | 149

As at 31 December 2023 ING holds approximately 13% (2022 : 13%) of the shares of Bank of Beijing, a bank
listed on the stock exchange of Shanghai. Bank of Beijing stake is part of the Corporate Line segment. As per
regulatory requirements set by China Banking and Insurance Regulatory Commission, ING, as a shareholder
holding more than 5% or more of the shares, is required to supply additional capital when necessary. No
request for additional capital was received in 2023 (2022: nil).
Changes in fair value through other comprehensive income
The following table presents changes in financial assets at fair value through other comprehensive income.

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> 4 Financial assets at fair value through profit or loss
ING Bank Annual Report 2023 147

Changes in fair value through other comprehensive income financial assets
| FVOCI equity securities | FVOCI debt instruments 1 | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 1,887 | 2,457 | 29,739 | 28,178 | 31,625 | 30,635
Additions | 28 | 17 | 19,967 | 18,789 | 19,995 | 18,806
Amortisation |  |  | 31 | -18 | 31 | -18
Transfers and reclassifications | 5 | 10 |  |  | 5 | 10
Changes in unrealised revaluations 2 | 68 | -65 | 657 | -3,230 | 725 | -3,295
Impairments |  |  | -1 |  | -1 |
Reversals of impairments |  |  | 6 | 3 | 6 | 3
Disposals and redemptions | -2 | -492 | -11,912 | -14,034 | -11,913 | -14,526
Exchange rate differences | -100 | -39 | 751 | 49 | 651 | 10
Changes in the composition of the group and other changes |  |  | -6 | 1 | -6 | 1
Closing balance | 1,885 | 1,887 | 39,231 | 29,739 | 41,116 | 31,625

1 Fair value through other comprehensive income debt instruments includes both debt securities and loans and advances.
2 Changes in unrealised revaluations of FVOCI debt instruments include changes on hedged items which are recognized in the
statement of profit or loss. Reference is made to Note 19 'Equity' for details on the changes in revaluation reserve.
FVOCI equity securities
Exchange rate differences of EUR -100 million (31 December 2022: EUR -39 million) are mainly related to the
stake in Bank of Beijing following the depreciation of CNY versus EUR. Furthermore in 2023, changes in
unrealised revaluations of equity securities are mainly related to the revaluation of the stake in Bank of
Beijing of EUR 77 million following changes in share price (31 December 2022: EUR -49 million).
In 2022, disposals of EUR 492 million mainly relate to the sale in the second quarter of HQLA eligible equity
instruments triggered by the changing interest rate environment and deteriorating market sentiment. This
portfolio was built up in early 2021 (additions in 2021: EUR 499 million) and was a relatively small part of the
HQLA portfolio. This was a diversified buy-and-hold portfolio aimed at generating stable dividend income
stream.
FVOCI debt instruments
In 2022, interest rates in both short and longer tenors increased significantly which resulted in changes in
unrealised revaluations of debt securities of EUR -3,230 million. During 2023 interest rates decreased
resulting in unrealised revaluations of EUR 657 million.
Reference is made to Note 6 'Debt securities' for details on ING Bank’s total exposure to debt securities.
6 Debt securities
ING Bank’s exposure to debt securities is included in the following lines in the statement of financial position:

Exposure to debt securities
in EUR million | 2023 | 2022
Debt securities at fair value through other comprehensive income | 38,281 | 29,095
Debt securities at amortised cost | 48,313 | 48,160
Debt securities at fair value through other comprehensive income and amortised cost | 86,594 | 77,255
Trading assets | 6,907 | 4,189
Debt securities at fair value through profit or loss | 5,363 | 6,258
Total debt securities at fair value through profit or loss | 12,270 | 10,447
| 98,864 | 87,703

ING Bank’s total exposure to debt securities (excluding debt securities held in the trading portfolio) of EUR
91,957 million (31 December 2022: EUR 83,513 million) is specified as follows:

Debt securities by type of exposure
| Debt Securities at FVPL | Debt Securities at FVOCI | Debt Securities at AC | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Government bonds | 362 | 63 | 20,988 | 16,016 | 24,050 | 24,629 | 45,400 | 40,708
Central bank bonds 1 | 446 | 307 |  |  | 2,043 | 2,331 | 2,489 | 2,638
Sub-sovereign, Supranationals and Agencies | 1,354 | 2,343 | 11,587 | 8,529 | 14,639 | 14,210 | 27,580 | 25,082
Covered bonds |  |  | 4,084 | 2,663 | 5,231 | 5,543 | 9,315 | 8,206
Corporate bonds | 799 | 857 | 127 | 108 | 109 | 26 | 1,035 | 991
Financial institutions' bonds | 1,645 | 1,931 | 483 | 772 | 186 | 220 | 2,314 | 2,923
ABS portfolio | 758 | 758 | 1,025 | 1,028 | 2,077 | 1,217 | 3,860 | 3,003
| 5,363 | 6,258 | 38,293 | 29,116 | 48,335 | 48,177 | 91,991 | 83,551
Loan loss provisions |  |  | -13 | -21 | -22 | -17 | -34 | -39
Debt securities portfolio | 5,363 | 6,258 | 38,281 | 29,095 | 48,313 | 48,160 | 91,957 | 83,513

1 In 2023 Central bank bonds have been included as a separate type of exposure. These bonds were previously included in Financial
Institutions bonds. The prior period has been updated for consistency and comparability.

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> 5 Financial assets at fair value through other comprehensive income
ING Bank Annual Report 2023 148
7 Loans and advances to customers

Loans and advances to customers by type
| Netherlands | Rest of the world | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Loans and advances to public authorities | 1,070 | 837 | 13,314 | 11,840 | 14,384 | 12,677
Residential mortgages | 110,475 | 107,952 | 214,120 | 205,511 | 324,596 | 313,463
Other personal lending | 5,036 | 5,835 | 31,535 | 30,345 | 36,571 | 36,180
Corporate Lending | 62,728 | 68,128 | 209,795 | 211,092 | 272,523 | 279,220
| 179,309 | 182,752 | 468,764 | 458,789 | 648,074 | 641,541
Loan loss provisions | -830 | -993 | -4,791 | -4,990 | -5,621 | -5,984
| 178,480 | 181,759 | 463,973 | 453,798 | 642,453 | 635,557

For details on credit quality and loan loss provisioning, refer to ‘Risk management – Credit risk’ paragraphs
‘Credit quality’ and 'Loan loss provisioning'.
As at 31 December 2023 EUR 642,260 million (2022: EUR 635,361 million) of loans and advances to
customers are non-subordinated.
Loans and advances to customers and to banks include finance lease receivables and are detailed as
follows:

Finance lease receivables 1
in EUR million | 2023 | 2022
Maturities of gross investment in finance lease receivables |  |
- within 1 year | 3,827 | 3,452
- between 1-2 years | 2,742 | 2,463
- between 2-3 years | 2,133 | 1,870
- between 3-4 years | 1,475 | 1,294
- between 4-5 years | 875 | 747
- more than 5 years | 1,451 | 1,423
| 12,503 | 11,251
Unearned future finance income on finance leases | -1,040 | -792
Net investment in finance leases | 11,463 | 10,459
Included in Loans and advances to banks | 5 | 6
Included in Loans and advances to customers | 11,459 | 10,453
| 11,463 | 10,459

1 The total loan loss provision of EUR 160 million (2022: EUR 160 million) for finance lease receivables is classified into the following loan
loss provision stages: Stage 1: EUR 6 million (2022: EUR 9 million), Stage 2: EUR 14 million (2022: EUR 28 million) and Stage 3: EUR 139
million (2022: EUR 123 million).
The finance lease receivables mainly relate to the financing of equipment and real estate and are mainly
part of corporate lending. To a lesser extent, the finance lease receivables relate to real estate for third
parties, where ING is the lessor. Interest income in 2023 on finance lease receivables amounts to EUR 429
million (2022: EUR 292 million).

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> 7 Loans and advances to customers
ING Bank Annual Report 2023 149
8 Investment in associates and joint ventures

Investments in associates and joint ventures
in EUR million 2023 | Interest held (%) | Fair value of listed invest- ments | Balance sheet value | Total assets | Total liabilities | Total income | Total expenses
TMBThanachart Bank Public Company Limited | 23% | 976 | 1,128 | 46,666 | 40,776 | 1,386 | 943
Other investments in associates and joint ventures |  |  | 381 |  |  |  |
|  |  | 1,509 |  |  |  |

Investments in associates and joint ventures
in EUR million 2022 | Interest held (%) | Fair value of listed invest- ments | Balance sheet value | Total assets | Total liabilities | Total income | Total expenses
TMBThanachart Bank Public Company Limited | 23% | 849 | 1,109 | 49,506 | 43,677 | 1,303 | 957
Other investments in associates and joint ventures |  |  | 391 |  |  |  |
|  |  | 1,500 |  |  |  |

TMBThanachart Bank Public Company Limited
ING Bank has a 23%investment in TMBThanachart Bank Public Company Limited (hereafter: TTB), a bank
listed on the Stock Exchange of Thailand. TTB is providing products and services to Wholesale, Small and
Medium Enterprise (SME), and Retail customers. TTB is accounted for as an investment in associate based on
the size of ING shareholding and representation on the Board. TTB is part of the Corporate Line segment.
Other investments in associates and joint ventures
Included in Other investments in associates and joint ventures are mainly financial services and (non)
financial technology funds or vehicles operating predominantly in Europe, and represents a number of
associates and joint ventures that are individually not significant to ING Bank.
Significant influence for associates in which the interest held is below 20%, is based on the combination of
ING Bank’s financial interest and other arrangements, such as participation in the Board of Directors.
The associates and joint ventures of ING are subject to legal and regulatory restrictions regarding the
amount of dividends they can pay to ING. These restrictions are for example dependent on the laws in the
country of incorporation for declaring dividends or as a result of minimum capital requirements that are
imposed by industry regulators in the countries in which the associates and joint ventures operate.
In addition, the associates and joint ventures also consider other factors in determining the appropriate
levels of equity needed. These factors and limitations include, but are not limited to, rating agency and
regulatory views, which can change over time.

Changes in Investments in associates and joint ventures
in EUR million | 2023 | 2022
Opening balance as at 1 January | 1,500 | 1,587
Additions | 55 | 48
Revaluations | 4 | -8
Share of results | 149 | 92
Dividends received | -74 | -48
Disposals | -89 | -10
Impairments | -5 | -192
Exchange rate differences | -32 | 27
Other |  | 4
Closing balance | 1,509 | 1,500

Share of results from associates and joint ventures of EUR 149 million (2022: EUR 92 million) as included in
the table above is mainly attributable to results of TTB of EUR 107 million (2022: EUR 81 million).
Impairments and reversal thereof
Out of EUR 192 million total impairment losses in 2022, EUR 165 million related to TTB. As per 31 December
2023 there were no triggers for additional impairment of TTB. Equally, indicators that would support a
potential reversal of previous impairment losses on TTB were not yet consistently observed during 2023.
Accumulated impairments of EUR 395 million (2022: EUR 395 million) have been recognised.

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> 8 Investment in associates and joint ventures
ING Bank Annual Report 2023 150
9 Property and equipment

Property and equipment by type |  |
in EUR million | 2023 | 2022
Property in own use | 616 | 681
Equipment: |  |
- Data processing equipment | 213 | 213
- Other equipment | 492 | 476
Right- of- use assets: |  |
- ROU property | 972 | 1,000
- ROU cars | 97 | 64
- ROU other leases | 9 | 12
| 2,399 | 2,446

Changes in property and equipment |  |  |  |  |
| Property in own use | Equipment | Right-of-use assets | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 681 | 702 | 688 | 699 | 1,076 | 1,113 | 2,446 | 2,515
Additions | 4 | 2 | 241 | 229 | 279 | 173 | 525 | 404
Transfers | -1 | -1 | -4 | -1 | -4 | -4 | -9 | -5
Depreciation | -12 | -13 | -204 | -220 | -246 | -252 | -461 | -485
Impairments 1 | -19 | -9 | -10 | -16 | -12 | -9 | -41 | -35
Reversals of impairments 1 | 10 | 16 |  |  |  |  | 10 | 16
Remeasurements | 4 | 15 |  |  | 9 | 67 | 13 | 81
Disposals | -47 | -67 | -10 | -15 | -20 | -15 | -78 | -98
Exchange rate differences | -4 | 36 | 4 | 13 | -4 | 3 | -5 | 52
Closing balance | 616 | 681 | 705 | 688 | 1,078 | 1,076 | 2,399 | 2,446
Costprice | 753 | 847 | 3,140 | 3,554 | 1,851 | 1,680 | 5,744 | 6,081
Accumulated depreciation | -305 | -362 | -2,430 | -2,853 | -904 | -714 | -3,639 | -3,929
Accumulated impairments | -99 | -107 | -6 | -12 | -32 | -21 | -136 | -140
Accumulated revaluation surplus | 267 | 304 |  |  |  |  | 267 | 304
Accumulated remeasurement |  |  |  |  | 163 | 130 | 163 | 130
Net carrying value | 616 | 681 | 705 | 688 | 1,078 | 1,076 | 2,399 | 2,446

1 (Reversals of) impairments of property and equipment are presented as Other operating expenses in the statement of Profit or Loss.
ING considers valuations from third-party experts in determining the fair values of property in own use. The
vast majority of the land and buildings are appraised during 2023. Property in own use purchase costs
amounted to EUR 753 million (2022: EUR 847 million). Cost or the purchase price less accumulated
depreciation and impairments would have been EUR 350 million (2022: EUR 368 million ) had property in
own use been valued at cost instead of at fair value.
The reported impairment losses of EUR -41 million (2022: EUR -35 million) mainly result from changes in the
post-pandemic way of working through downscaling of physical office spaces and closure of branches for
commercial reasons.
10 Intangible assets

Changes in intangible assets
| Goodwill | Software | Other | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 464 | 472 | 636 | 682 | 2 | 2 | 1,102 | 1,156
Opening balance adjustment 1 |  | 25 |  |  |  |  |  | 25
Additions |  |  | 64 | 54 |  |  | 64 | 54
Capitalised expenses |  |  | 246 | 144 |  |  | 246 | 144
Amortisation |  |  | -213 | -226 |  |  | -213 | -226
Impairments 1 2 |  | -32 | -5 | -22 |  |  | -5 | -54
Exchange rate differences | 5 | -1 | 2 | 4 |  |  | 7 | 2
Disposals |  |  | -10 | -3 |  |  | -10 | -3
Changes in the composition of the group and other changes |  |  | 8 | 3 | 1 |  | 8 | 3
Closing balance | 469 | 464 | 727 | 636 | 2 | 2 | 1,198 | 1,102
Gross carrying amount | 469 | 464 | 2,646 | 2,491 | 8 | 8 | 3,123 | 2,962
Accumulated amortisation |  |  | -1,876 | -1,787 | -4 | -4 | -1,879 | -1,790
Accumulated impairments |  |  | -43 | -69 | -2 | -2 | -45 | -70
Net carrying value | 469 | 464 | 727 | 636 | 2 | 2 | 1,198 | 1,102

1 In 2022, the allocated goodwill to Türkiye cash generating unit after first being adjusted for hyperinflation accounting for EUR 25
million, was fully impaired for the amount of EUR 32 million (based on discount rate 24.04% and terminal growth rate 10.40% as per
1 January 2022). Türkiye is part of the Retail Other segment.
2 Impairments of intangible assets are presented within Other operating expenses in the statement of Profit or Loss.

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> 9 Property and equipment
ING Bank Annual Report 2023 151
Goodwill
Goodwill is allocated to groups of cash generating units (CGUs) as follows:

Goodwill allocation to group of CGUs
in EUR million | Method used for recoverable amount | Discount rate | Terminal growth rate | Goodwill | Goodwill
Group of CGU’s |  |  |  | 2023 | 2022
Retail Netherlands | Value in use | 8.80% | 2.20% | 30 | 30
Retail Germany | Value in use | 8.68% | 2.00% | 349 | 349
Retail Poland | Value in use | 10.44% | 2.40% | 75 | 69
Retail Romania | Value in use | 12.72% | 2.60% | 15 | 15
|  |  |  | 469 | 464

Impairment testing
Goodwill is tested for impairment annually in the fourth quarter by comparing the recoverable amount of
each goodwill-carrying CGU with its carrying amount. The key assumptions used in the calculation of the
recoverable amounts are included in the table above. Furthermore, ING Bank tests goodwill whenever a
triggering event is identified.
At the annual impairment test in the fourth quarter, the recoverable amount exceeds the carrying value of
the CGUs as at 31 December 2023 and therefore no impairment is required (31 December 2022: EUR 32
million for Türkiye CGU).
Methodology
In line with IFRS, the recoverable amount is determined as the higher of the fair value less costs of disposal
and Value in Use (VIU). The VIU calculation is based on a Dividend Discount model using three year
management approved plans, updated for expected changes in the macroeconomic environment. When
estimating the VIU of a CGU, local conditions and requirements determine the capital requirements,
discount rates, and terminal growth rates. These local conditions and requirements determine the ability to
upstream excess capital and profits to ING Bank. 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 is based on the long term inflation rate obtained
from market sources. The impacts of climate risk are included to the extent that they are observable in
discount rates and assets prices.
Sensitivity of key assumptions
Key assumptions in the goodwill impairment test model are the projected locally available cash flows (based
on local capital requirements and projected profits), discount rates (cost of equity), and long-term growth
rates.
The recoverable amounts of the CGUs are sensitive to the above key assumptions. A decrease in the
available cash flows of 10%, an increase in the discount rate of 1 percent point or a reduction of future
growth rate to zero are considered reasonably possible changes in key assumptions. If the aforementioned
changes occur to one of the above key assumptions holding the other key assumptions constant, goodwill
of the remaining CGUs will continue to be recoverable.
Software
Software includes internally developed software amounting to EUR 628 million (2022: EUR 540 million).
Software is reviewed for indicators of impairment. Irrespective of whether there is an indication of
impairment, software under development is tested annually for impairment. In 2023, individually
immaterial items were impaired for an amount of EUR 5 million (31 December 2022: 22 million).
11 Other assets

Other assets by type
in EUR million | 2023 | 2022
Net defined benefit assets | 554 | 617
Investment properties | 14 | 18
Property development and obtained from foreclosures | 32 | 34
Prepayments | 436 | 364
Accrued assets | 521 | 549
Amounts to be settled | 3,869 | 5,190
Other | 1,683 | 2,067
| 7,109 | 8,839

Disclosures in respect of Net defined benefit assets are provided in Note 30 'Pensions and other post-
employment benefits'.
Amounts to be settled include primarily transactions not settled at the balance sheet date. The nature of
these transaction is short term and they are expected to settle shortly after the closing date of the balance
sheet.
Other relates to various receivables in the normal course of business, amongst others, short term
receivables relating to mortgage issuance and other amounts receivable from customers.

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> 10 Intangible assets
ING Bank Annual Report 2023 152
12 Deposits from banks

Deposits from banks by type
| Netherlands | Rest of the world | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Non-interest bearing | 3 | 86 | 174 | 315 | 177 | 400
Interest bearing | 7,803 | 32,858 | 15,277 | 23,374 | 23,080 | 56,232
| 7,806 | 32,943 | 15,451 | 23,689 | 23,257 | 56,632

Deposits from banks includes non-subordinated deposits and reverse repurchase transactions, for more
information on reverse repurchase transaction refer to Note 4 'Financial assets at fair value through profit or
loss'.
Deposits from banks includes ING’s participation in the Targeted Longer-Term Refinancing Operations
(TLTRO) of EUR 6.0 billion (2022: EUR 36.0 billion). In 2023, EUR 30.0 billion of ING's TLTRO III participation was
repaid.
For the details of the applicable rates and impact on net interest income reference is made to Note 20 'Net
interest income'.
13 Customer deposits

Customer deposits 1
in EUR million | 2023 | 2022
Current accounts / Overnight deposits | 222,478 | 260,819
Savings accounts | 334,287 | 329,501
Time deposits | 103,186 | 55,820
Other | 42,265 | 40,201
| 702,217 | 686,341

1 ING changed the presentation of customer deposits as of 2023. The comparative figure for 2022 has been updated accordingly.
Current accounts / Overnight deposits, Saving accounts and Time deposits include balances with individuals,
respectively EUR 107,711 million (2022: EUR 124,067 million), EUR 305,734 million (2022: EUR
304,276 million) and EUR 46,762 million (2022: EUR 16,729 million).

Customer deposits by type
| Netherlands | Rest of the world | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Non-interest bearing | 239 | 2,332 | 25,316 | 24,307 | 25,556 | 26,639
Interest bearing 1 | 284,406 | 277,379 | 392,255 | 382,324 | 676,661 | 659,703
| 284,646 | 279,711 | 417,571 | 406,630 | 702,217 | 686,341

1 Interest bearing includes current accounts which are not remunerated however ING holds the contractual right to revise.
In 2023 Customer deposits includes EUR 53,116 million (2022: EUR 48,410 million) of d eposits received from
ING Group of which EUR 11,032 million(2022: EUR 7,296 million) is included in Time deposits and EUR 42,084
million (2022: EUR 41,113 million) in Other.
14 Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
in EUR million | 2023 | 2022
Trading liabilities | 37,220 | 39,088
Non-trading derivatives | 2,019 | 3,048
Designated at fair value through profit or loss | 55,399 | 50,883
| 94,637 | 93,019

Trading liabilities

Trading liabilities by type
in EUR million | 2023 | 2022
Equity securities | 1,156 | 935
Debt securities | 2,492 | 1,291
Funds on deposit | 10,443 | 5,993
Derivatives | 23,129 | 30,869
| 37,220 | 39,088

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> 12 Deposits from banks
ING Bank Annual Report 2023 153
Non-trading derivatives

Non-trading derivatives by type
in EUR million | 2023 | 2022
Derivatives used in: |  |
- fair value hedges | 113 | 244
- cash flow hedges | 458 | 1,275
- hedges of net investments in foreign operations | 92 | 83
Other non-trading derivatives | 1,356 | 1,446
| 2,019 | 3,048

Reference is made to Note 33 'Derivatives and hedge accounting' for information on derivatives used for
hedge accounting.
Other non-trading derivatives mainly includes interest rate swaps and foreign currency swaps for hedging
purposes, but for which no hedge accounting is applied.
Designated at fair value through profit or loss

Designated at fair value through profit or loss by type
in EUR million | 2023 | 2022
Debt securities | 8,219 | 6,069
Funds entrusted | 47,085 | 44,731
Subordinated liabilities | 95 | 82
| 55,399 | 50,883

As at 31 December 2023 , the change in the fair value of financial liabilities designated at fair value through
profit or loss attributable to changes in credit risk is EUR -34 million (2022: EUR -75 million) on a cumulative
basis. This change has been determined as the amount of change in fair value of the financial liability that is
not attributable to changes in market conditions that gave rise to market risk (i.e. mainly interest rate risk
based on yield curves).
The amount that ING Bank is contractually required to pay at maturity to the holders of financial liabilities
designated at fair value through profit or loss excluding repurchase agreements (part of funds entrusted) is
EUR 9,958 million (2022: EUR 8,408 million).
Funds entrusted include mainly repurchase agreements. For more information on repurchase transactions
refer to Note 4 'Financial assets at fair value through profit or loss'.
15 Provisions

Provisions by type 1
in EUR million | 2023 | 2022
Reorganisation provisions | 231 | 418
Litigation provisions | 193 | 150
Other provisions | 334 | 433
| 758 | 1,001
Loan loss provisions for guarantees | 142 | 29
| 899 | 1,030

1 In 2023, the table was updated to present the IFRS 9 loan loss provisions for guarantees separately. The comparatives for 2022
have been updated accordingly.

Changes in provisions
| Reorganisation | Litigation | Other provisions 2 | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 418 | 421 | 150 | 132 | 433 | 386 | 1,001 | 940
Additions 1 | 207 | 217 | 78 | 59 | 39 | 230 | 325 | 506
Interest |  |  |  |  |  | -2 |  | -2
Releases 1 | -34 | -46 | -26 | -8 | -22 | -166 | -82 | -221
Utilised | -356 | -170 | -23 | -33 | -11 | -15 | -389 | -218
Exchange rate differences | -1 |  | 1 |  | -3 |  | -4 | -1
Other changes | -3 | -4 | 13 |  | -104 |  | -94 | -3
Closing balance | 231 | 418 | 193 | 150 | 334 | 433 | 758 | 1,001

1 Additions to provisions and unused amounts released are presented in Note 26 'Other operating expenses' in the Statement of Profit
or Loss.
2 In 2023, the table was updated to exclude the IFRS 9 loan loss provisions for guarantees. The comparatives for 2022 have been
updated accordingly.
As at 31 December 2023, amounts expected to be settled within 12 months in provisions amount to EUR
699 million (2022: EUR 815 million). The amounts included are based on best estimates with regard to
amounts and timing of cash flows required to settle the obligation.
Reorganisation provisions
In 2023, the additions to the reorganisation provisions mainly relate to restructuring activities in Belgium,
Poland and the Netherlands. The additions in 2022 mainly relate to the discontinuation of retail banking
activities in France and the restructuring of the branch network and retail advice organisation in the
Netherlands, as well as to restructuring activities in Belgium.

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> 14 Financial liabilities at fair value through profit or loss
ING Bank Annual Report 2023 154
These initiatives are implemented over a period of several years and the estimate of the reorganisation
provisions is inherently uncertain.
Litigation provisions
Reference is made to Note 39 'Legal proceedings' for developments in litigation provisions.
Other provisions
In 2023 ING Bank voluntarily changed its accounting policy for non-financial guarantees that are subject to
contractual indemnification rights from IAS 37 principles to loan commitment accounting under IFRS 9. The
change from IAS 37 to IFRS 9 resulted in derecognition of the existing IAS 37 provision of EUR 109 million as
per 1 January 2023 and recognition of a provision for Expected credit losses of EUR 151 million for non-
financial guarantees as per 1 January 2023 (EUR 42 million pre-tax impact on Equity at the beginning of
2023). This change is included in Other changes in the movement table.
For details and changes on loan loss provisioning, refer to ‘Risk management – Credit risk’ paragraph 'Loan
loss provisioning'. For details on the IFRS change, refer to Note 1.3.1 'Changes in IFRS effective in 2023'.
In 2022, the additions and releases include EUR 138 million and EUR 141 million respectively related to IAS
37 off balance facilities that in 2023 are included in IFRS 9 loan loss provisions.
The additions to the Other provisions in 2022 include EUR 75 million which relates to the provision for the
compensation of Dutch retail customers for past interest charges that did not sufficiently track market rates
and largely reflects the impact of interest-on-interest compensation. This is in addition to the provision of
EUR 180 million recognised in 2021.
16 Other liabilities

Other liabilities by type
In EUR million | 2023 | 2022
Net defined benefit liability | 164 | 139
Other post-employment benefits | 30 | 29
Other staff-related liabilities | 719 | 633
Other taxation and social security contributions | 641 | 365
Rents received in advance | 14 | 30
Costs payable | 2,170 | 2,014
Amounts to be settled | 6,509 | 6,714
Lease liabilities | 1,162 | 1,174
Other | 1,721 | 2,247
| 13,130 | 13,344

Disclosures in respect of Net defined benefit liabilities are provided in Note 30 'Pensions and other post-
employment benefits'.
Other staff-related liabilities includes vacation leave provisions, jubilee provisions, disability/illness provisions
and liabilities related with variable compensations.
As of 2023, ING decided to no longer issue shares in order to fund obligations arising from share-based
employee incentive programmes but buy back shares from the market. Reference is made to Note 19
'Equity' for further information.
Amounts to be settled includes primarily transactions not settled at the balance sheet date. The nature of
these transactions is short term and have settled after the closing date of the balance sheet.
Lease liabilities relate to right-of-use assets. Disclosures in respect to right-of-use assets are provided in
Note 9 'Property and equipment'. The total cash outflow for leases in 2023 was EUR 291 million ( 2022 : EUR
296 million).
The line Other relates mainly to amounts payable to customers.

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> 15 Provisions
ING Bank Annual Report 2023 155
17 Debt securities in issue
Debt securities in issue relates to debentures and other issued debt securities with either fixed interest rates
or interest rates based on floating interest rate levels, such as certificates of deposit and accepted bills
issued by ING Bank, except for subordinated items. Debt securities in issue does not include debt securities
presented as Financial liabilities at fair value through profit or loss. ING Bank does not have debt securities
that are issued on terms other than those available in the normal course of business.

Debt securities in issue – maturities
In EUR million | 2023 | 2022
Fixed rate debt securities |  |
Within 1 year | 29,790 | 18,044
More than 1 year but less than 2 years | 4,660 | 1,217
More than 2 years but less than 3 years | 6,279 | 4,702
More than 3 years but less than 4 years | 4,068 | 2,903
More than 4 years but less than 5 years | 4,722 | 2,880
More than 5 years | 13,139 | 13,221
Total fixed rate debt securities | 62,658 | 42,969
Floating rate debt securities |  |
Within 1 year | 17,871 | 13,856
More than 1 year but less than 2 years | 226 | 307
More than 2 years but less than 3 years | 2,176 | 256
More than 3 years but less than 4 years | 75 | 494
More than 4 years but less than 5 years | 0 | 97
More than 5 years | 1,417 | 96
Total floating rate debt securities | 21,765 | 15,106
Total debt securities | 84,423 | 58,075

Reference is made to Note 29 'Changes in liabilities arising from financing activities' for further information
on issuances, redemptions and non-cash movements.
18 Subordinated loans

Subordinated loans
In EUR million | 2023 | 2022
Subordinated loans | 15,404 | 15,789
| 15,404 | 15,789

Subordinated loans relate to subordinated capital debentures and private loans which may be included in
the calculation of the capital ratio.
Subordinated loans include loans that qualify as Tier 1 and Tier 2 (CRD IV eligible) capital. Subordinated loans
of EUR 16,240 million (2022: EUR 16,364 million) have been placed with ING Bank N.V. by ING Groep N.V.
Reference is made to Note 36 'Derivatives and hedge accounting' for details on fair value hedge accounting.
In 2023 ING Groep N.V. issued in February EUR 500 million 5.00% Fixed Rate Subordinated Tier 2 Notes, GBP
750 million 6.25% Fixed Rate Subordinated Tier 2 Notes and USD 1 billion 7.50% Perpetual AT1 Contingent
Convertible Capital Securities.
In 2023 ING Bank N.V. redeemed with I NG Groep N.V. in March USD 1,250 million 4.70% Fixed Subordinated
Tier 2 notes, in April EUR 1 billion 3.00% Fixed Subordinated Tier 2 notes on the first call dates and in
September USD 810 million 5.80% Fixed Rate Subordinated Tier 2 notes.
Reference is made to Note 29 'Changes in liabilities arising from financing activities' for further information
on issuances and redemptions.
The average interest rate on subordinated loans is 4.44% (2022: 4.00%). The interest expense during the
year 2023 was EUR 708 million (2022: EUR 646 million).

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> 17 Debt securities in issue
ING Bank Annual Report 2023 156
19 Equity

Total equity
In EUR million | 2023 | 2022 | 2021
Share capital and share premium |  |  |
- Share capital | 525 | 525 | 525
- Share premium | 16,542 | 16,542 | 16,542
| 17,067 | 17,067 | 17,067
Other reserves |  |  |
- Revaluation reserve: Equity securities at FVOCI | 1,152 | 1,187 | 1,282
- Revaluation reserve: Debt instruments at FVOCI | -277 | -339 | 92
- Revaluation reserve: Cash flow hedge | -2,058 | -3,055 | -153
- Revaluation reserve: Credit liability | 31 | 70 | -80
- Revaluation reserve: Property in own use | 178 | 176 | 208
- Net defined benefit asset/liability remeasurement reserve | -317 | -232 | -212
- Currency translation reserve | -2,527 | -2,395 | -3,483
- Share of associates and joint ventures and other reserves | 3,048 | 3,604 | 3,416
| -769 | -984 | 1,069
Retained earnings | 23,893 | 26,462 | 29,778
Shareholders’ equity (parent) | 40,191 | 42,546 | 47,914
Non-controlling interests | 944 | 504 | 736
Total equity | 41,135 | 43,050 | 48,650

Adjustments for hyperinflation
ING applies IAS 29 ‘Hyperinflation’ on its investment in Türkiye since 2022. The IAS 29 indexation impact on
equity was EUR 54 million (2022: EUR 100 million including a one-off impact of EUR 64 million) of which EUR
284 million (2022: EUR 1,011 million) in the currency translation reserve, EUR 0 million (2022: EUR -563
million) in retained earnings, EUR 3 million (2022: EUR -17 million) in revaluation reserves and EUR -234
million (2022: EUR -331 million) in profit or loss.
Share capital and share premium

Share capital
| Ordinary shares (par value EUR 1.13)
| Number x 1,000 | Amount
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Authorised share capital | 1,600,000 | 1,600,000 | 1,600,000 | 1,808 | 1,808 | 1,808
Unissued share capital | 1,134,965 | 1,134,965 | 1,134,965 | 1,283 | 1,283 | 1,283
Issued share capital | 465,035 | 465,035 | 465,035 | 525 | 525 | 525

No change occurred in the issued share capital and share premium in 2023, 2022 and 2021.
All ordinary shares are in registered form. No share certificates have been issued. Ordinary shares may be
transferred by means of a deed of transfer, subject to the approval of the general meeting of ING Bank. The
par value of ordinary shares is EUR 1.13.
The authorised ordinary share capital of ING Bank N.V. consists of 1,600 million shares of which as at
31 December 2023, 465 million ordinary shares were issued and fully paid.
ING Bank has 50 authorised preference shares with par value of EUR 1.13 per preference share. As at
31 December 2023, 7 preference shares were issued and fully paid (2022: 7 preference shares; 2021: 7
preference shares) amounting to EUR 8 (2022: EUR 8 and 2021: EUR 8).
Dividend restrictions
ING Bank N.V. and its Dutch group companies are subject to legal restrictions regarding the amount of
dividends they can pay to their shareholders. The Dutch Civil Code contains the restriction that dividends
can only be paid up to an amount equal to the excess of the company’s own funds over the sum of the
paid-up capital and reserves required by law. Additionally, certain Bank companies are subject to restrictions
on the amount of funds they may transfer in the form of dividends or otherwise to the parent company.
Furthermore, in addition to the restrictions in respect of minimum capital requirements that are imposed by
industry regulators in the countries in which subsidiaries operate, other limitations exist in certain countries.

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> 19 Equity
ING Bank Annual Report 2023 157
Other reserves
Revaluation reserves

Changes in revaluation reserve: Equity securities and Debt instruments at FVOCI
| Equity securities at FVOCI | Debt instruments at FVOCI
In EUR million | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Opening balance | 1,187 | 1,282 | 1,181 | -339 | 92 | 296
Unrealised revaluations | -35 | -118 | 94 | 53 | -406 | -164
Realised gains/losses transferred to the statement of profit or loss |  |  |  | 9 | -25 | -40
Realised revaluations transferred to retained earnings | 1 | 23 | 6 |  |  |
Closing balance | 1,152 | 1,187 | 1,282 | -277 | -339 | 92

Equity securities at FVOCI
In 2023, the unrealised revaluation of EUR -35 million (2022: EUR -118 million and 2021: EUR 94 million)
includes revaluation of shares in Bank of Beijing for EUR -24 million (2022: EUR -86 million and 2021: EUR 38
million).

Changes in cash flow hedge and credit liability reserve
| Cash flow hedge | Credit liability
In EUR million | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Opening balance | -3,055 | -153 | 1,450 | 70 | -80 | -117
Changes in credit liability reserve |  |  |  | -39 | 165 | 37
Unrealised revaluations | 997 | -2,901 | -1,603 |  |  |
Realised revaluations transferred to retained earnings |  |  |  |  | -15 |
Closing balance | -2,058 | -3,055 | -153 | 31 | 70 | -80

Cash flow hedge
ING mainly hedges floating rate lending with interest rate swaps. Due to a decrease in forward interest rates
in 2023 the interest rate swaps had a positive revaluation of EUR 997 million which is recognised in the cash
flow hedge reserve.

Changes in Property in own use reserve |  |
In EUR million | 2023 | 2022 | 2021
Opening balance | 176 | 208 | 221
Impact IAS 29 on opening balance 1 |  | -20 |
Unrealised revaluations | 10 | 15 | -2
Realised revaluations transferred to retained earnings | -8 | -26 | -11
Other changes |  |  |
Closing balance | 178 | 176 | 208

1 Impact of application of hyperinflation accounting under IAS 29.
Net defined benefit asset/liability remeasurement reserve
Reference is made to Note 30 'Pensions and other post-employment benefits'.
Currency translation reserve

Changes in currency translation reserve
In EUR million | 2023 | 2022 | 2021
Opening balance | -2,395 | -3,483 | -3,636
Impact IAS 29 on opening balance 1 |  | 647 |
Unrealised revaluations | 183 | -7 | -61
Realised gains/losses transferred to the statement of profit or loss |  | 4 |
Exchange rate differences | -316 | 444 | 214
Closing balance | -2,527 | -2,395 | -3,483

1 Impact of application of hyperinflation accounting under IAS 29.
Unrealised revaluations relates to changes in the value of hedging instruments that are designated as net
investment hedges. The hedging strategy is to protect the CET1 ratio against adverse impact from exchange
rate fluctuations. The net decrease of unrealized revaluations and Exchange rate differences of EUR -132
million is related to several currencies including USD (EUR -238 million), TRY (EUR 11 million including EUR
284 million IAS 29 indexation effect), GBP (EUR 18 million), PLN (EUR 169 million), CHF (EUR 37 million), AUD
(EUR -42 million), RUB (EUR -70 million), THB (EUR -13 million), CNY (EUR -16 million) and other currencies
(EUR 11 million).

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> 19 Equity
ING Bank Annual Report 2023 158
Share of associates and joint ventures and other reserves

Changes in share of associates, joint ventures and other reserves
In EUR million | 2023 | 2022 | 2021
Opening balance | 3,604 | 3,416 | 3,246
Result for the year | 336 | 161 | 191
Transfer to/from retained earnings | -892 | 26 | -21
Closing balance | 3,048 | 3,604 | 3,416

The Share of associates, joint ventures and other reserves includes non-distributable profits from associates
and joint ventures of EUR 815 million (2022: EUR 797 million and 2021: EUR 738 million). Other reserves
includes a statutory reserve of EUR 1,602 million (2022: EUR 2,264 million and 2021: EUR 2,103 million)
related to the former Stichting Regio Bank and the former Stichting Vakbondsspaarbank SPN and a legal
reserve of EUR 628 million (2022: EUR 540 million and 2021: EUR 573 million) related to internally developed
software. The transfer to retained earnings of EUR -892 million includes the release of the Regio bank and
Vakbondsspaarbank SPN reserve of EUR -998 million against regulatory expenses which are recognised in
the statement of profit or loss.
Retained earnings

Changes in retained earnings
In EUR million | 2023 | 2022 | 2021
Opening balance | 26,462 | 29,778 | 28,273
Impact on opening balance 1 | -45 | -563 |
Transfer to/from other reserves | 899 | -8 | 26
Result for the year | 6,821 | 3,506 | 4,579
Dividend and other distributions | -10,269 | -6,277 | -3,125
Employee share plans | 30 | 27 | 28
Changes in composition of the group and other changes | -5 | -1 | -3
Closing balance | 23,893 | 26,462 | 29,778

1 2023: Changes in policy following the adoption of IFRS 17 and change in policy for non-financial guarantees. 2022: impact of
application of hyperinflation accounting under IAS 29.
Dividend
In 2023, a cash dividend a nd other cash distributio n of EUR 10,269 million in total (2022: EUR 6,277 million
and 2021: EUR 3,125 million) was paid to the shareholder of ING Bank.
Restrictions with respect to dividend and repayment of capital
The following equity components cannot be freely distributed: Revaluation reserves, Net defined benefit
asset/liability remeasurement reserve, Currency translation reserve, Share of associates and joint ventures
reserve and Other reserves including the part related to the former Stichting Regio Bank and the former
Stichting Vakbondsspaarbank SPN.
As at 31 December 2023, an amount of EUR 1,602 million (2022: EUR 2,264 million) related to the former
Stichting Regio Bank and the former Stichting Vakbondsspaarbank SPN is included.
ING Bank N.V. is subject to legal restrictions regarding the amount of dividends it can pay to its shareholder.
Pursuant to the Dutch Civil Code, dividends can only be paid up to an amount equal to the excess of the
company’s own funds over the sum of the paid-up capital and reserves required by law. Moreover, ING Bank
N.V.’s ability to pay dividends is dependent on the dividend payment ability of its subsidiaries, associates
and joint ventures. ING Bank N.V. is legally required to create a non-distributable reserve insofar as profits of
its subsidiaries, associates and joint ventures are subject to dividend payment restrictions which apply to
those subsidiaries, associates and joint ventures themselves.
Non distributable reserves, determined in accordance with the financial reporting requirements included in
Part 9 of Book 2 of the Dutch Civil Code, from ING Bank’s subsidiaries, associates and joint amounts to EUR
6,727 million (2022: EUR 8,408 million).
Furthermore there are restrictions to the ability of subsidiaries, associates and joint ventures to distribute
reserves to ING Bank N.V. as a result of minimum capital requirements that are imposed by industry
regulators in the countries in which the subsidiaries operate.
In addition to the legal and regulatory restrictions on distributing dividends from subsidiaries, associates and
joint ventures to ING Bank N.V. there are various other considerations and limitations that are taken into
account in determining the appropriate levels of equity in the Bank’s subsidiaries, associates and joint
ventures. These considerations and limitations include, but are not restricted to, minimum capital
requirements that are imposed by industry regulators in the countries in which the subsidiaries, associates
and joint ventures operate, or other limitations which may exist in certain countries and may or may not be
temporary in nature. It is not possible to disclose a reliable quantification of these limitations. Refer to Note
44 'Capital management' for an overview of the minimal capital requirements of ING Bank.
Without prejudice to the authority of the Executive Board to allocate profits to reserves and to the fact that
the shares are the most junior securities issued by ING Bank N.V., no specific dividend payment restrictions
with respect to the shares exist.
Furthermore, ING Bank N.V. is subject to legal restrictions with respect to repayment of capital to Its
shareholder. Pursuant to the Dutch Civil Code, capital may only be repaid if none of ING Bank N.V.’s creditors
opposes such a repayment within two months following the announcement of a resolution to that effect.

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> 19 Equity
ING Bank Annual Report 2023 159
Notes to the Consolidated statement of profit or loss
20 Net interest income

Net interest income
in EUR million | 2023 | 2022 | 2021 |  |  | 2023 | 2022 | 2021
Interest income on loans | 31,831 | 18,537 | 13,979 |  | Interest expense on deposits from banks | 1,556 | 903 | 109
Interest income on financial assets at fair value through OCI | 1,078 | 510 | 346 |  | Interest expense on customer deposits | 11,726 | 4,133 | 1,999
Interest income on debt securities at amortised cost | 877 | 591 | 468 |  | Interest expense on debt securities in issue | 2,856 | 859 | 597
Interest income on non-trading derivatives (hedge accounting) | 10,682 | 4,011 | 2,361 |  | Interest expense on subordinated loans | 707 | 646 | 573
Negative interest on liabilities | 19 | 892 | 1,502 |  | Negative interest on assets | — | 285 | 572
Total interest income using effective interest rate method | 44,486 | 24,541 | 18,657 |  | Interest expense on non-trading derivatives (hedge accounting) | 11,849 | 4,144 | 1,700
|  |  |  |  | Total interest expense using effective interest rate method | 28,693 | 10,969 | 5,550
Interest income on financial assets at fair value through profit or loss | 4,934 | 1,444 | 435 |  |  |  |  |
Interest income on non-trading derivatives (no hedge accounting) | 2,637 | 2,390 | 2,025 |  | Interest expense on financial liabilities at fair value through profit or loss | 4,410 | 1,237 | 304
Interest income other | 171 | 101 | 14 |  | Interest expense on non-trading derivatives (no hedge accounting) | 3,131 | 2,411 | 1,605
Total other interest income | 7,741 | 3,935 | 2,474 |  | Interest expense on lease liabilities | 28 | 15 | 14
Total interest income | 52,228 | 28,476 | 21,131 |  | Interest expense other | 157 | 98 | 43
|  |  |  |  | Total other interest expense | 7,726 | 3,761 | 1,966
|  |  |  |  | Total interest expense | 36,419 | 14,730 | 7,516
|  |  |  |  | Net interest income | 15,809 | 13,745 | 13,615

Total net interest income amounts to EUR 15,809 million (2022: EUR 13,745 million; 2021: EUR 13,615
million). The increasing net interest income for 2023 and 2022 is a reflection of the interest rates during the
period which repriced faster on the asset side compared to the liability side of the balance sheet. In 2022 an
one-off adjustment was recorded in interest income on loans regarding the credit moratoria in Poland (EUR
-343 million).
Due to prevalent rates during the comparative years, Negative interest on liabilities includes the ECB funding
rate benefit from the TLTRO III programme of EUR 314 million in 2022 (2021: EUR 808 million), while for 2023
Interest expense on deposits from banks includes interest paid under the TLTRO III programme of EUR
557 million.
This was driven by the following applicable TLTRO III rates applicable for ING Bank: -100 bps throughout the
entire 2021 and the first half of 2022 until 23 June 2022; -37 bps, -36 bps, -29 bps between 23 June 2022
and 22 November 2022 for ING's participation in series 3,4 and 7 of TLTRO III, respectively; 150 bps between
22 November 2022 and 21 December 2022; 200 bps from 21 December 2022 until 8 February 2023; 250 bps
between 8 February 2023 and 22 March 2023; 300 bps between 22 March 2023 and May 2023 and
increased to 400 bps during the period May to December 2023.
Furthermore, the before mentioned change in terms in 2022 caused the discontinuation of the fair value
hedge accounting relationship on TLTRO III, impacting net interest income of 2022 for an amount of EUR
-483 million (refer to Note 36 'Derivatives and hedge accounting' for more details).

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> 20 Net interest income
ING Bank Annual Report 2023 160
21 Net fee and commission income

Net fee and commission income
in EUR million | 2023 | 2022 | 2021
Fee and commission income |  |  |
Payment Services | 2,062 | 1,888 | 1,661
Securities business | 584 | 632 | 853
Insurance and other broking | 529 | 682 | 734
Portfolio management | 625 | 600 | 617
Lending business | 602 | 556 | 477
Financial guarantees and other commitments | 459 | 496 | 458
Other | 239 | 232 | 204
Total fee and commission income | 5,100 | 5,085 | 5,004
Fee and commission expenses |  |  |
Payment Services | 704 | 600 | 563
Securities business | 129 | 160 | 164
Distribution of products | 480 | 555 | 591
Other | 202 | 184 | 169
Total fee and commission expenses | 1,514 | 1,499 | 1,487
Net fee and commission income | 3,586 | 3,586 | 3,517

Payment services fees are earned for providing services for deposit accounts and cards, cash management
and transaction processing including interchange. Securities fees and commissions are fees for securities
brokerage and securities underwriting. Portfolio management fees include fees earned for asset
management activities, fiduciary and related activities in which ING holds or invests assets on behalf of its
customers. Fees and commissions from Lending (syndication) business include income earned for lending
advisory, origination, underwriting and loan commitments which are not part of the effective interest rate.
Financial guarantees and other commitments fees and commissions are earned from bank guarantees,
letters of credit and other trade finance related products, factoring and leasing. Fees paid for distribution of
products are all fees paid for the distribution of ING’s products and services through external providers.
Reference is made to Note 27 'Segments' which includes net fee and commission income, as reported to the
the Management Board Banking, disaggregated by line of business and by geographical segment.
22 Valuation results and net trading income

Valuation results and net trading income
in EUR million | 2023 | 2022 | 2021
Securities trading results | 873 | -356 | 787
Derivatives trading results | 116 | 11 | -554
Other trading results | 273 | 71 | 84
Change in fair value of derivatives relating to |  |  |
– fair value hedges | -3,028 | 5,265 | -85
– cash flow hedges (ineffective portion) | 48 | 20 | 1
– other non-trading derivatives | 563 | 1,164 | -53
Change in fair value of assets and liabilities (hedged items) | 2,962 | -5,150 | 113
Valuation results on assets and liabilities designated at FVPL (excluding trading) | -127 | 444 | -12
Foreign exchange transactions results | 1,230 | 33 | 566
| 2,910 | 1,503 | 847

In general, the fair value movements are influenced by changes in the market conditions, such as stock
prices, credit spreads, interest rates and currency exchange rates. In 2023, the financial markets were
characterised by elevated levels of volatility. In the first quarter of the year, the markets worldwide were
shaken by the demise of SVB bank and the stress surrounding Credit Suisse, fuelling uncertainty around
possible additional defaults. Furthermore, the ongoing interest-rate hikes by the central banks in Europe and
the US led to a fast increase in rates worldwide. Toward the end of the year, the probability increased for
interest rates going down, which has been reflected in the forward interest rates. In 2022, the market was
affected by a significant increase in interest-rates volatility, interest-rate hikes across EU and US, and a
steady fall of the EUR value and appreciation of USD, while in 2021 the market recovered from the Covid-19
pandemic, stabilised and returned to pre-pandemic levels.
Securities trading results includes the results of market making in instruments such as government
securities, equity securities, corporate debt securities, money-market instruments. Derivatives trading
results includes the results of derivatives such as interest rate swaps, options, futures, and forward
contracts. Trading gains and losses relating to trading securities still held as at 31 December 2023 amount
to EUR 160 million (2022: EUR -157 million; 2021 : EUR -268 million). The majority of the risks involved in
security and currency trading are economically hedged with derivatives. The securities trading results are
partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading
results.
Other trading results include the results of trading loans and funds entrusted.

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> 22 Net fee and commission income
ING Bank Annual Report 2023 161
Foreign exchange transactions results include gains and losses from spot and forward contracts, options,
futures, and translated foreign currency assets and liabilities. The result on currency trading is included in
foreign exchange transactions results.
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that
are classified under IFRS as Trading but are closely related to servicing the needs of the clients of ING. ING
offers products that are traded on the financial markets to institutional clients, corporate clients, and
governments. ING’s trading books are managed based on internal limits and comprise a mix of products
with results which could be offset. A significant part of the derivatives in the trading portfolio are related to
servicing corporate clients in their risk management to hedge for example currency or interest rate
exposures. From a risk perspective, the gross amount of trading assets must be considered together with
the gross amount of trading liabilities, which are presented separately on the statement of financial
position. However, IFRS does not always allow netting of these positions in the statement of financial
position. Reference is made to Note 4 'Financial assets at fair value through profit or loss' and Note 14
'Financial liabilities at fair value through profit or loss' for information on trading assets and trading liabilities
respectively.
‘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 relationships as hedged items. During 2023, the interest-rate movements
significantly affected the fair value changes of other non-trading derivatives as well as the fair value
changes of both the derivatives and the hedged items designated in fair value hedges. Reference is made to
Note 33 'Derivatives and hedge accounting' for information on derivatives used for hedge accounting.
Furthermore, derivatives trading results is also impacted by fair value movements arising from changes in
credit spreads (CVA and DVA), bid offer spreads, model risk and incremental cost of funding on derivatives
(FVA and CollVA). Refer to Note 32 'Fair value of assets and liabilities' for information on these valuation
adjustments.
Valuation results on assets and liabilities designated at fair value through profit or loss (excluding trading)’
include fair value changes on financial assets and financial liabilities driven by changed market conditions.
Refer to Note 4 'Financial assets at fair value through profit or loss' and to Note 14 'Financial liabilities at fair
value through profit or loss' .
In addition, ‘Valuation results on assets and liabilities designated at fair value through profit or loss
(excluding trading)’ include fair value adjustments on own issued notes amounting to EUR -216 million
(2022 : EUR 709 million ; 2021: EUR 56 million).
23 Investment income

Investment income
in EUR million | 2023 | 2022 | 2021
Dividend income | 105 | 149 | 122
Realised gains/losses on disposal of debt instruments measured at FVOCI | -11 | 32 | 45
Income from and fair value gains/losses on investment properties |  | -1 |
| 95 | 181 | 167

In 2023, 2022 and 2021 dividend income mainly consists of dividend received from ING’s equity stake in
Bank of Beijing.
24 Other net income
In 2023, Other net income of EUR -146 million (2022: EUR -369 million; 2021 : EUR 230 million) includes EUR
-244 million (2022: EUR -333 million) net monetary loss reflecting the IAS 29 hyperinflation impact in Türkiye
related to the indexation of Türkiye's statement of financial position and statement of profit or loss with an
offsetting effect in the currency translation reserve. Furthermore, it includes the positive recovery of
defaulted receivables of EUR 25 million (2022 EUR 32 million; 2021 EUR 25 million).
Other net income as per 31 December 2022 also includes an amount of EUR -307 million loss recognised to
unwind a macro fair value hedge of deposits, which led to a timing difference with expected fair
value.Furthermore, it includes the proceeds of the agreement with Boursorama after our exit from the retail
banking market in France of EUR 125 million and a gain of EUR 67 million from a legacy entity in Retail
Belgium.
In 2021, other net income included the recognition of EUR 72 million relating to a better than expected
recovery of the insolvency of a financial institution in the Netherlands and EUR 34 million proceeds of the
agreement with Raiffeisenbank due to the withdrawal from the retail banking market in the Czech Republic.

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> 22 Net fee and commission income
ING Bank Annual Report 2023 162
25 Staff expenses

Staff expenses
in EUR million | 2023 | 2022 | 2021
Salaries | 4,559 | 4,145 | 4,011
Pension costs and other staff-related benefit costs | 418 | 390 | 408
Social security costs | 635 | 584 | 563
Share-based compensation arrangements | 30 | 27 | 28
External employees | 776 | 738 | 699
Education | 50 | 47 | 47
Other staff costs | 256 | 222 | 182
| 6,725 | 6,152 | 5,938

Share-based compensation arrangements include EUR 30 million (2022: EUR 26 million; 2021: EUR 26
million) relating to equity-settled share-based payment arrangements and EUR 0 million (2022: EUR 1
million ; 2021: EUR 2 million) relating to cash-settled share-based payment arrangements.

Number of employees
| Netherlands | Rest of the world | Total
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Total average number of internal employees at full time equivalent basis | 14,449 | 14,488 | 15,138 | 44,985 | 42,523 | 40,701 | 59,434 | 57,569 | 57,660

Remuneration of senior management, Management Board Banking and Supervisory
Board
Reference is made to Note 43 'Related parties'.
Share plans
ING grants various types of share awards, namely deferred shares, performance shares and upfront shares,
which form part of the variable remuneration offering via the Long-term Sustainable Performance Plan
(LSPP). The entitlement to the LSPP share awards is granted conditionally. If the participant remains in
employment for an uninterrupted period between the grant date and the vesting date, the entitlement
becomes unconditional, with the exception of the upfront shares which are immediately vested upon grant.
Upfront and deferred shares awarded to the Management Board members of ING Bank as well as identified
staff, have a retention obligation that must be adhered to upon vesting, typically a minimum retention of 12
months applies. ING has the authority to apply a holdback to awarded but unvested shares and a clawback
to vested shares
The share awards granted in 2023 relate to the performance year 2022. In 2023, 224,796 share awards
(2022: 193,157; 2021: 123,750) were granted to the members of the Management Board Banking (including
Executive Board members). To senior management and other employees 3,244,951 share awards (2022 :
2,913,926; 2021: 3,267,372) were granted.

Changes in share awards
| Share awards (in numbers) | Weighted average grant date fair values (in euros)
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Opening balance as at 1 January | 3,697,542 | 3,672,659 | 3,876,206 | 7.97 | 7.60 | 7.25
Granted | 3,469,747 | 3,107,083 | 3,391,122 | 9.71 | 8.99 | 9.69
Vested | -3,113,115 | -2,962,698 | -3,459,163 | 8.83 | 8.60 | 9.25
Forfeited | -158,387 | -119,502 | -135,506 | 8.54 | 7.63 | 7.61
Closing balance | 3,895,787 | 3,697,542 | 3,672,659 | 8.81 | 7.97 | 7.60

The fair value of share awards granted is recognised as an expense under Staff expenses and is allocated
over the vesting period of the share awards. The fair value calculation takes into account the current share
prices, expected volatilities and the dividend yield of ING shares.
As at 31 December 2023, total unrecognised compensation costs related to share awards amount to EUR 15
million (2022: EUR 13 million; 2021: EUR 13 million). These costs are expected to be recognised over a
weighted average period of 2.0 years (2022: 1.9 years; 2021: 1.7 years).

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> 25 Staff expenses
ING Bank Annual Report 2023 163
26 Other operating expenses

Other operating expenses
in EUR million | 2023 | 2022 | 2021
Regulatory costs | 1,042 | 1,250 | 1,265
Audit and non-audit services | 36 | 31 | 34
IT related expenses | 948 | 818 | 781
Advertising and public relations | 369 | 331 | 305
External advisory fees | 294 | 306 | 297
Office expenses | 289 | 273 | 280
Travel and accommodation expenses | 125 | 91 | 52
Contributions and subscriptions | 122 | 109 | 112
Postal charges | 36 | 31 | 38
Depreciation of property and equipment | 461 | 485 | 573
Amortisation of intangible assets | 213 | 226 | 261
(Reversals of) impairments of property and equipment | 32 | 19 | 26
(Reversals of) impairments of intangible assets | 6 | 60 | 95
Addition to / (unused amounts reversed of) provision for reorganisations | 173 | 170 | 214
Addition to / (unused amounts reversed of) other provisions | 70 | 117 | 254
Other | 622 | 723 | 669
| 4,838 | 5,040 | 5,257

Reference is made to Note 9 'Property and equipment' for (reversals of) impairments of property and
equipment and Note 10 'Intangible assets' for (reversals of) impairments of intangible assets.
For further information on addition to (unused amounts reversed of) provision for reorganisations refer to
Note 15 'Provisions' and for further information on addition to (unused amounts reversed of) other
provisions refer to Note 15 'Provisions' and Note 39 'Legal proceedings' .
Regulatory costs
Regulatory costs represent contributions to the Deposit Guarantee Schemes (DGS), the Single Resolution
Fund (SRF), local bank taxes and local resolution funds. Included in Regulatory costs for 2023, are
contributions to DGS of EUR 320 million ( 2022: EUR 425 million; 2021: EUR 435 million) mainly related to the
Netherlands, Germany, Belgium and Poland and contributions to the SRF and local resolution funds of EUR
251 million (2022: EUR 354 million; 2021: EUR 308 million). In 2023 local bank taxes increased by EUR 1
million from EUR 470 million in 2022 to EUR 472 million (2021: EUR 522 million).
In 2022, ING Bank Slaski, together with seven other Polish banks, established an Institutional Protection
Scheme (IPS). The fund can be used to ensure the liquidity and solvency of each of its participants, and to
assist in the resolution of participating and non-participating banks. The contribution by ING amounts to EUR
nil for 2023 (2022: EUR 99 million and is recognized as regulatory costs (DGS).
Audit and non-audit services
Audit and non-audit services include fees for services provided by the Bank’s auditors and remained stable
for 2023.
Segment reporting
27 Segments
ING Bank’s segments are based on the internal reporting structure by lines of business.
The Management Board Banking of ING Bank (Chief Operating Decision Maker (CODM)) set the performance
targets, approve and monitor the budgets prepared by the business lines. Business lines formulate strategic,
commercial, and financial plans in conformity with the strategy and performance targets set by the CODM.
Recognition and measurement of segment results are in line with the accounting policies as described in
Note 1 'Basis of preparation and material accounting policy information'. The results for the period for each
reportable segment are after intercompany and intersegment eliminations and are those reviewed by the
CODM to assess performance of the segments. Corporate expenses are allocated to business lines based on
time spent by head office personnel, the relative number of staff, or on the basis of income, expenses and/or
assets of the segment.
The following table specifies the segments by line of business and main sources of income of each of the
segments:

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> 26 Other operating expenses
ING Bank Annual Report 2023 164

Specification of the main sources of income of each of the segments by line of business
Segments by line of business | Main source of income
Retail Netherlands (Market Leaders) | Income from retail and private banking activities in the Netherlands, including the Business Banking segments. The main products offered are current and savings accounts, business lending, mortgages and other consumer lending.
Retail Belgium (Market Leaders) | Income from retail and private banking activities in Belgium and Luxembourg, including the Business Banking segments. The main products offered are similar to those in the Netherlands.
Retail Germany (Challengers and Growth Markets) | Income from retail and private banking activities in Germany, including the Business Banking segments. The main products offered are similar to those in the Netherlands.
Retail Other (Challengers and Growth Markets) | Income from retail banking activities in the rest of the world, including the Business Banking segments in specific geographies. The main products offered are similar to those in the Netherlands.
Wholesale Banking | Income from wholesale banking activities. The main products are: lending, payments & cash management, working capital solutions, trade finance, financial markets, corporate finance and treasury.

Specification of geographical split of the segments
Geographical split of the segments | Main countries
The Netherlands |
Belgium | Including Luxembourg
Germany 1,4 |
Other Challengers 1,2,4 | Australia, Italy, Spain and Portugal
Growth Markets 2,3,4 | Poland, Romania and Türkiye
Wholesale Banking Rest of World 4 | UK, Ireland & Middle East, Americas, Asia and other countries in Europe
Other 3 | Corporate Line

1 Retail Banking Austria (included in Germany) and Retail Banking Czech Republic (included in Other Challengers) up to and including
2021, after which ING left the retail markets
2 In 2022, ING discontinued its retail activities in France and the Philippines.
3 In 2023, there was a change in the governance over the Asian stakes, which resulted in their transfer from Retail Banking Growth
Markets to Other (Corporate Line). Comparatives have been adjusted.
4 As from 2023, Wholesale Banking in France as well as Wholesale Banking in the Philippines are recorded in Wholesale Banking Rest of
World. Previously these financials were reported in Other Challengers and Growth Markets respectively. Comparatives have been
adjusted. As from 2022, Wholesale Banking Austria as well as Wholesale Banking Czech Republic are recorded in Wholesale Banking
Rest of World. Previously these financials were reported in Germany and Other Challengers respectively.
ING Bank monitors and evaluates the performance of ING Bank at a consolidated level and by segment. The
Management Board Banking consider this to be relevant to an understanding of the Bank’s financial
performance, because it allows investors to understand the primary method used by management to
evaluate the Bank’s operating performance and make decisions about allocating resources.
I NG Bank reconciles the total segment results to the total result using Corporate Line. The Corporate Line
reflects capital management activities, as ING Bank 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.
As from 2022, results in the Corporate Line have been impacted by the application of hyperinflation
accounting in the consolidation of our subsidiary in Türkiye (IAS 29).
Following a change in governance, the Asian stakes (our investments in Bank of Beijing and TMBThanachart
Bank (TTB)) are reported in Corporate Line as of 2023 (with a profit before tax of €185 million), whereas
previously they were reported in Retail Other. Comparable data have been adjusted accordingly.
Furthermore, Corporate Line includes certain other income and expenses that are not allocated to the
banking businesses.
Total income for Corporate Line in 2023 amounted to EUR 450 million compared with EUR 84 million in 2022.
This included a hyperinflation accounting impact of EUR -179 million in 2023 versus EUR -279 million in
2022. Excluding hyperinflation accounting impact, total income rose by EUR 266 million, mainly attributable
to higher income from Treasury activities and because 2022 had included EUR -165 million impact for
impairments on our stake in TTB.
Operating expenses for Corporate Line were EUR 542 million, 1.3% up from EUR 535 million in 2022.
Expenses in 2023 included a hyperinflation impact of EUR 48 million and EUR 51 million that was
provisioned, while 2022 had included a hyperinflation impact of EUR 30 million and a EUR 32 million
impairment loss related to the goodwill allocated to Türkiye.
The information presented in this note is in line with the information presented to the Management Board
Banking of ING Bank.
This note does not provide information on the types of products and services from which each reportable
segment derives its revenues, as this is not reported internally and is therefore not readily available.

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> 27 Segments
ING Bank Annual Report 2023 165

Segments by line of business
12 month period | 2023 |  |  |  |  |  |  | 2022 |  |  |  |  |  |  | 2021 |  |  |  |  |  |
in EUR million | Retail Nether- lands | Retail Belgium | Retail Germany | Retail Other | Wholesale Banking | Corporate Line | Total | Retail Nether- lands | Retail Belgium | Retail Germany | Retail Other 1,2 | Wholesale Banking | Corporate Line 1 | Total | Retail Nether- lands | Retail Belgium | Retail Germany 3 | Retail Other 1,2,3 | Wholesale Banking | Corporate Line 1 | Total
Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– Net interest income | 3,096 | 2,063 | 2,862 | 3,437 | 4,028 | 323 | 15,809 | 2,888 | 1,668 | 1,666 | 2,725 | 4,260 | 539 | 13,745 | 3,290 | 1,747 | 1,447 | 2,709 | 4,151 | 271 | 13,615
– Net fee and commission income | 959 | 502 | 357 | 519 | 1,259 | -10 | 3,586 | 892 | 511 | 437 | 535 | 1,217 | -6 | 3,586 | 771 | 519 | 497 | 530 | 1,197 | 3 | 3,517
– Total investment and other income | 945 | 117 | -67 | 277 | 1,771 | -37 | 3,006 | 417 | -32 | 69 | 377 | 849 | -464 | 1,215 | 201 | 209 | 65 | 202 | 568 | 108 | 1,354
Total income | 5,001 | 2,683 | 3,152 | 4,233 | 7,057 | 275 | 22,401 | 4,196 | 2,147 | 2,172 | 3,637 | 6,325 | 69 | 18,546 | 4,262 | 2,475 | 2,009 | 3,441 | 5,916 | 382 | 18,485
Expenditure |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– Operating expenses | 2,135 | 1,852 | 1,243 | 2,479 | 3,313 | 541 | 11,563 | 2,115 | 1,786 | 1,140 | 2,509 | 3,114 | 529 | 11,193 | 2,403 | 1,667 | 1,174 | 2,442 | 2,926 | 583 | 11,195
– Addition to loan loss provisions | 5 | 169 | 119 | 313 | -92 | 5 | 520 | 67 | 139 | 131 | 302 | 1,220 | 2 | 1,861 | -76 | 225 | 49 | 202 | 117 |  | 516
Total expenses | 2,140 | 2,022 | 1,362 | 2,792 | 3,222 | 546 | 12,083 | 2,182 | 1,924 | 1,271 | 2,812 | 4,334 | 531 | 13,053 | 2,326 | 1,892 | 1,223 | 2,644 | 3,042 | 583 | 11,711
Result before taxation | 2,861 | 661 | 1,790 | 1,441 | 3,836 | -270 | 10,318 | 2,014 | 223 | 901 | 825 | 1,991 | -462 | 5,493 | 1,936 | 583 | 786 | 797 | 2,874 | -201 | 6,774
Taxation | 740 | 182 | 631 | 359 | 900 | 114 | 2,926 | 540 | 72 | 202 | 254 | 581 | 74 | 1,723 | 499 | 146 | 252 | 209 | 703 | 67 | 1,876
Non-controlling interests |  |  |  | 174 | 61 |  | 235 |  |  | 3 | 47 | 52 | 1 | 102 |  |  | 4 | 98 | 26 |  | 128
Net result IFRS | 2,121 | 479 | 1,159 | 908 | 2,875 | -385 | 7,157 | 1,474 | 151 | 696 | 525 | 1,358 | -537 | 3,667 | 1,437 | 437 | 529 | 490 | 2,144 | -268 | 4,770

1 In 2023, there was a change in the governance over the Asian stakes, which resulted in their transfer from Retail Other to Corporate Line. Historical figures have been adjusted.
2 In 2022, ING discontinued its retail activities in France and the Philippines.
3 In 2021, ING exited from the retail banking markets in Austria and the Czech Republic.

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> 27 Segments
ING Bank Annual Report 2023 166

Geographical split of the segments
12 month period | 2023 |  |  |  |  |  |  |  | 2022 |  |  |  |  |  |  |  | 2021 |  |  |  |  |  |  |
in EUR million | Nether- lands | Belgium | Ger- many | Other Challen gers | Growth markets | Wholes ale Banking Rest of World | Other | Total | Nether- lands | Belgium | Ger- many | Other Challen gers 1,3 | Growth markets 1,2,3 | Wholes ale Banking Rest of World 1 | Other 2 | Total | Nether- lands | Belgium | Ger- many 4 | Other Challen gers 1,3,4 | Growth markets 1,2,3 | Wholes ale Banking Rest of World 1 | Other 2 | Total
Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– Net interest income | 3,773 | 2,712 | 3,375 | 2,121 | 1,961 | 1,548 | 320 | 15,809 | 3,782 | 2,065 | 2,126 | 1,842 | 1,462 | 1,933 | 534 | 13,745 | 4,068 | 2,109 | 1,938 | 1,679 | 1,528 | 2,021 | 271 | 13,615
– Net fee and commission income | 1,239 | 715 | 400 | 285 | 384 | 573 | -10 | 3,586 | 1,171 | 714 | 494 | 290 | 375 | 548 | -6 | 3,586 | 1,070 | 717 | 523 | 300 | 351 | 553 | 3 | 3,517
– Total investment and other income | 1,627 | 145 | -81 | 21 | 487 | 829 | -24 | 3,006 | 577 | -14 | 94 | 182 | 386 | 449 | -460 | 1,215 | 314 | 265 | 118 | 64 | 289 | 196 | 108 | 1,354
Total income | 6,639 | 3,573 | 3,694 | 2,427 | 2,833 | 2,950 | 286 | 22,401 | 5,531 | 2,765 | 2,714 | 2,314 | 2,223 | 2,930 | 69 | 18,546 | 5,452 | 3,092 | 2,578 | 2,043 | 2,168 | 2,770 | 382 | 18,485
Expenditure |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– Operating expenses | 3,065 | 2,195 | 1,437 | 1,320 | 1,495 | 1,509 | 543 | 11,563 | 3,001 | 2,120 | 1,318 | 1,380 | 1,426 | 1,418 | 529 | 11,193 | 3,279 | 1,960 | 1,339 | 1,449 | 1,254 | 1,332 | 583 | 11,195
– Addition to loan loss provisions | -111 | 139 | 35 | 166 | 189 | 96 | 5 | 520 | 181 | 230 | 460 | 140 | 230 | 618 | 2 | 1,861 | 28 | 184 | 118 | 84 | 110 | -8 |  | 516
Total expenses | 2,954 | 2,334 | 1,472 | 1,486 | 1,683 | 1,605 | 548 | 12,083 | 3,182 | 2,350 | 1,778 | 1,519 | 1,657 | 2,036 | 531 | 13,053 | 3,307 | 2,143 | 1,457 | 1,533 | 1,363 | 1,324 | 583 | 11,711
Result before taxation | 3,685 | 1,239 | 2,222 | 941 | 1,149 | 1,345 | -263 | 10,318 | 2,349 | 415 | 936 | 795 | 567 | 894 | -463 | 5,493 | 2,145 | 948 | 1,121 | 511 | 804 | 1,446 | -201 | 6,774
Retail Banking | 2,861 | 661 | 1,790 | 649 | 792 |  |  | 6,753 | 2,014 | 223 | 901 | 547 | 278 |  |  | 3,964 | 1,936 | 583 | 786 | 206 | 590 |  |  | 4,101
Wholesale Banking | 824 | 577 | 432 | 292 | 357 | 1,345 | 8 | 3,836 | 335 | 192 | 34 | 248 | 288 | 894 |  | 1,991 | 209 | 365 | 336 | 304 | 214 | 1,446 |  | 2,874
Corporate Line |  |  |  |  |  |  | -270 | -270 |  |  |  |  |  |  | -462 | -462 |  |  |  |  |  |  | -201 | -201
Result before taxation | 3,685 | 1,239 | 2,222 | 941 | 1,149 | 1,345 | -263 | 10,318 | 2,349 | 415 | 936 | 795 | 567 | 894 | -463 | 5,493 | 2,145 | 948 | 1,121 | 511 | 804 | 1,446 | -201 | 6,774
Taxation | 909 | 349 | 723 | 282 | 225 | 335 | 104 | 2,926 | 658 | 114 | 297 | 258 | 153 | 186 | 58 | 1,723 | 556 | 240 | 358 | 156 | 174 | 326 | 66 | 1,876
Non-controlling interests |  |  |  |  | 234 |  |  | 235 |  |  | 3 |  | 98 |  | 1 | 102 |  |  | 4 |  | 124 |  |  | 128
Net result IFRS | 2,776 | 889 | 1,499 | 659 | 690 | 1,011 | -367 | 7,157 | 1,691 | 301 | 636 | 537 | 316 | 708 | -522 | 3,667 | 1,589 | 708 | 759 | 355 | 506 | 1,120 | -267 | 4,770

1 As from 2023, Wholesale Banking in France as well as Wholesale Banking in the Philippines are recorded in Wholesale Banking Rest of World. Previously the financials of Wholesale Banking in France and Wholesale Banking in the Philippines were reported in Other Challengers
and Growth Markets respectively. Historical figures have been adjusted.
2 In 2023, there was a change in the governance over the Asian stakes, which resulted in their transfer form Growth Markets to Other (Corporate Line). Historical figures have been adjusted.
3 In 2022, ING discontinued its retail activities in France and the Philippines.
4 In 2021, ING exited from the retail banking markets in Austria (included in Germany) and the Czech Republic (included in Other Challengers).

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> 27 Segments
ING Bank Annual Report 2023 167
28 Information on geographical areas
ING Bank’s business lines operate in different geographical areas: the Netherlands, Belgium, Germany, Rest
of Europe and Rest of the World. The geographical analyses are based on the location of the office from
which the transactions are originated and do not include countries where ING only has representation
offices. The Netherlands is ING Bank’s country of domicile.
In order to increase ING Bank’s tax transparency, additional financial information on a per country basis has
been included in this disclosure: Tax paid represents all income tax paid to and/or received from tax
authorities in the current year, irrespective of the fiscal year to which these payments or refunds relate.
Total assets by country does not include intercompany balances and reconciles to the total assets in the
consolidated statement of financial position of ING Bank. At the date when these financial statements were
authorized for issue, the Netherlands has implemented new legislation, based on an OECD legislative
framework, to ensure that large multinational groups with their head office in the Netherlands pay income
tax at a minimum effective tax rate of 15% in all the countries they are present in, applicable from 2024 and
onwards. Countries in which ING operates that have an effective tax rate below 15% will be subject to an
additional top-up tax.
ING Bank expects to be subject to top-up tax in relation to its operations in Switzerland, Ireland, Bulgaria and
United Arab Emirates in which countries the statutory tax rate is below 15%, and in Singapore which
country applies a special tax rate for certain profit components that reduces its effective tax rate to below
15%.
ING Bank has applied a temporary mandatory relief from deferred tax accounting for the impacts of the
top-up tax and accounts for it as a current tax when it is incurred. If the top-up tax had been applied in
2023, the total top up tax that had to be paid by ING Bank would have amounted to approximately EUR 4
million.
The table below provide additional information, for the years 2023, 2022 and 2021 respectively, on names
of principal subsidiaries and branches, nature of main activities and average number of employees on a full
time equivalent basis by country/tax jurisdiction.

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> 28 Information on geographical areas
ING Bank Annual Report 2023 168

Additional information by country
Geographical area | Country/Tax jurisdiction | Name of principal subsidiary | Main (banking) activity | Average number of employees at full time equivalent basis | Total income | Total assets | Result before tax | Taxation | Tax paid
|  |  |  | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Netherlands | Netherlands | ING Bank N.V. | Wholesale / Retail | 14,449 | 14,488 | 15,138 | 5,370 | 5,017 | 5,671 | 292,868 | 308,931 | 301,446 | 1,651 | 1,069 | 1,442 | 514 | 418 | 506 | 601 | 392 | 428
Belgium | Belgium | ING België N.V. | Wholesale / Retail | 6,392 | 6,582 | 6,965 | 3,246 | 2,353 | 2,719 | 128,437 | 127,085 | 130,687 | 1,209 | 286 | 808 | 339 | 81 | 204 | 169 | 152 | 174
| Luxembourg | ING Luxembourg S.A. | Wholesale / Retail | 939 | 927 | 856 | 608 | 422 | 338 | 14,392 | 18,351 | 20,452 | 349 | 180 | 161 | 89 | 45 | 41 | 40 | 37 | 20
Germany | Germany | ING DiBa A.G. | Wholesale / Retail | 5,499 | 5,573 | 5,521 | 3,931 | 2,815 | 2,387 | 168,991 | 161,997 | 159,805 | 2,467 | 1,039 | 1,012 | 807 | 328 | 338 | 904 | 189 | 493
Rest of Europe | Poland 1 | ING Bank Slaski S.A | Wholesale / Retail | 11,677 | 11,130 | 10,674 | 2,350 | 1,652 | 1,509 | 52,134 | 45,598 | 43,888 | 1,236 | 544 | 660 | 286 | 143 | 154 | 136 | -23 | 235
| Spain | Branch of ING Bank N.V. | Wholesale / Retail | 1,576 | 1,439 | 1,380 | 1,165 | 877 | 743 | 33,083 | 32,262 | 32,559 | 541 | 299 | 212 | 128 | 98 | 57 | 114 | 101 | 59
| Italy | Branch of ING Bank N.V. | Wholesale / Retail | 1,190 | 1,118 | 1,099 | 438 | 345 | 335 | 14,836 | 14,152 | 13,983 | 133 | 63 | 73 | 55 | 22 | 25 | 19 | 2 | 2
| Romania 1 | Branch of ING Bank N.V. | Wholesale / Retail | 3,971 | 3,580 | 3,319 | 690 | 584 | 495 | 11,496 | 10,555 | 9,635 | 396 | 324 | 273 | 61 | 51 | 41 | 55 | 67 | 21
| Türkiye | ING Bank A.S. | Wholesale / Retail | 2,973 | 3,076 | 3,338 | 14 | 64 | 335 | 4,770 | 5,400 | 5,818 | -232 | -143 | 144 | -20 | 65 | 35 | 29 | 79 | 33
| UK | Branch of ING Bank N.V. | Wholesale | 722 | 692 | 698 | 758 | 693 | 636 | 50,572 | 46,066 | 50,734 | 510 | 286 | 277 | 131 | 81 | 73 | 101 | 58 | 50
| Switzerland | Branch of ING Bank N.V. | Wholesale | 292 | 277 | 259 | 248 | 290 | 241 | 8,501 | 9,513 | 11,081 | 137 | 182 | 148 | 19 | 25 | 21 | 52 | 45 | 67
| France 2,4 | Branch of ING Bank N.V. | Wholesale | 194 | 600 | 764 | 252 | 372 | 271 | 8,322 | 8,934 | 12,381 | 122 | 44 | -107 | 33 | 12 | -27 | 7 | 22 | -7
| Ireland | Branch of ING Bank N.V. | Wholesale | 82 | 72 | 64 | 83 | 66 | 70 | 3,907 | 2,771 | 1,831 | 65 | 26 | 65 | 8 | 3 | 8 | 8 | 6 | 8
| Czech Republic 3 | Branch of ING Bank N.V. | Wholesale | 134 | 137 | 285 | 76 | 78 | 121 | 3,191 | 3,192 | 2,894 | 33 | 38 | 54 | 6 | 6 | 12 | 10 | 13 | -2
| Hungary | Branch of ING Bank N.V. | Wholesale | 127 | 120 | 119 | 85 | 82 | 44 | 1,893 | 1,993 | 1,148 | 35 | 38 | 12 | 7 | 5 | 3 | 9 | 2 | 2
| Russia | ING Bank (Eurasia) Z.A.O. | Wholesale | 259 | 272 | 281 | 136 | 246 | 38 | 925 | 2,783 | 898 | 151 | 128 | 3 | 31 | 9 | 0 | 20 | 21 | -7
| Slovakia 1 | Branch of ING Bank N.V. | Wholesale | 1,347 | 1,129 | 983 | 20 | 15 | 15 | 618 | 391 | 352 | 11 | -1 | 3 | 2 | 1 | 0 | 2 | 0 | 2
| Portugal | Branch of ING Bank N.V. | Wholesale | 10 | 11 | 11 | 17 | 15 | 15 | 620 | 689 | 675 | 12 | 9 | 9 | 3 | 3 | 3 | 2 | 2 | 3
| Ukraine | PJSC ING Bank Ukraine | Wholesale | 91 | 91 | 96 | 53 | 45 | 22 | 590 | 385 | 409 | 44 | 9 | 11 | 22 | 2 | 2 | 7 | 2 | 2
| Bulgaria | Branch of ING Bank N.V. | Wholesale | 61 | 60 | 61 | 23 | 15 | 14 | 530 | 436 | 420 | 11 | 1 | 2 | 1 | 0 | 0 | 1 | 0 | 0
| Austria 3 | Branch of ING Bank N.V. | Wholesale | 17 | 17 | 292 | 9 | 19 | 175 | 383 | 261 | 419 | -4 | 9 | 101 | -1 | 2 | 16 | 1 | 3 | 6

1 Includes significant number of FTEs in relation to global services provided.
2 Public subsidies received, as defined in article 89 of the CRD IV, amounts to EUR 0.2 million (2022: EUR 0.1 million; 2021: EUR 0.0 million).
3 In 2021, ING exited from the retail banking markets in Austria and the Czech Republic.
4 In 2022, ING exited from the retail banking markets in France and the Philippines.

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> 28 Information on geographical areas
ING Bank Annual Report 2023 169

Additional information by country (continued) |  |  |  |  |
Geographical area | Country/Tax jurisdiction | Name of principal subsidiary | Main (banking) activity | Average number of employees at full time equivalent basis | Total income | Total assets | Result before tax | Taxation | Tax paid
|  |  |  | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Rest of the World | Australia | ING Bank (Australia) Ltd. | Wholesale / Retail | 1,820 | 1,556 | 1,503 | 1,033 | 948 | 782 | 52,734 | 52,728 | 49,826 | 572 | 557 | 500 | 174 | 172 | 149 | 185 | 135 | 121
| USA | ING Financial Holdings Corp. | Wholesale | 603 | 586 | 563 | 1,123 | 892 | 936 | 66,143 | 65,024 | 55,582 | 654 | 413 | 779 | 185 | 115 | 182 | 183 | 135 | 148
| Singapore | Branch of ING Bank N.V. | Wholesale | 576 | 565 | 573 | 354 | 354 | 331 | 26,816 | 25,701 | 24,163 | 172 | 105 | 133 | 24 | 14 | 19 | 13 | 21 | 9
| Japan | Branch of ING Bank N.V. | Wholesale | 32 | 31 | 30 | 40 | 30 | 25 | 14,267 | 5,128 | 2,256 | 17 | 20 | 4 | 7 | 7 | 2 | 10 | -1 | 3
| South Korea | Branch of ING Bank N.V. | Wholesale | 86 | 78 | 75 | 92 | 86 | 65 | 6,167 | 7,989 | 5,800 | 39 | 47 | 26 | 9 | 12 | 6 | 24 | 7 | -2
| Hong Kong | Branch of ING Bank N.V. | Wholesale | 104 | 103 | 105 | 101 | 82 | 79 | 4,378 | 4,343 | 6,691 | -18 | -33 | 5 | -2 | -5 | 1 | 0 | 0 | -7
| Taiwan | Branch of ING Bank N.V. | Wholesale | 37 | 35 | 33 | 39 | 33 | 26 | 2,597 | 3,578 | 2,963 | 0 | -16 | -3 | 1 | -5 | -1 | 0 | 4 | 0
| China | Branch of ING Bank N.V. | Wholesale | 78 | 76 | 79 | 18 | 30 | 26 | 998 | 1,181 | 1,654 | -12 | 4 | 0 | 2 | 5 | 6 | -9 | 13 | -1
| Philippines 1,4 | Branch of ING Bank N.V. | Wholesale | 4,079 | 3,098 | 2,414 | 10 | 10 | 6 | 403 | 381 | 567 | 1 | -39 | -33 | 2 | 8 | -5 | 2 | 2 | 1
| United Arab Emirates | Branch of ING Bank N.V. | Wholesale | 11 | 10 | 10 | -2 | -1 | 0 | 1 | 1 | 1 | -3 | -1 | -1 | 0 | 0 | 0 | 0 | 0 | 0
| Sri Lanka | Branch of ING Hubs B.V. | Global services | 4 | 4 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
| Brazil | ING ADMINISTRAÇÃO LTDA. | In run-off / liquidation | 2 | 30 | 63 | 18 | 17 | 13 | 73 | 57 | 288 | 17 | 9 | 1 | 0 | 1 | 5 | 4 | 5 | 8
| Mexico | ING Consulting, S.A. de C.V. | In run-off / liquidation |  | 6 | 6 |  | 0 | 1 |  | 1 | 3 |  | -2 | -1 |  | 0 | 0 |  | 0 | 0
| Canada | Payvision Canada Services Ltd. | Dissolved in 2023 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0
| Macau | Payvision Macau Ltd. | Liquidated in 2022 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0
| Indonesia | PT ING Securities Indonesia | Liquidated in 2022 |  | 0 | 0 |  | 0 | 0 |  | 0 | 5 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0
| Malaysia | Branch of ING Bank N.V. | Closed in 2022 |  | 0 | 4 |  | 0 | 0 |  | 1 | 1 |  | 0 | -1 |  | 0 | 0 | 0 | 0 | 0
| Mauritius | ING Mauritius Investment I | Liquidated in 2022 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0 |  | 0 | 0
| Colombia | ING Capital Colombia S.A.S. | Dissolved in 2021 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0
Total |  |  |  | 59,434 | 57,569 | 57,660 | 22,401 | 18,546 | 18,485 | 975,636 | 967,861 | 951,317 | 10,318 | 5,493 | 6,774 | 2,926 | 1,723 | 1,876 | 2,700 | 1,489 | 1,871

1 Includes significant number of FTEs in relation to global services provided.
4 In 2022, ING exited from the retail banking markets in France and the Philippines.

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> 28 Information on geographical areas
ING Bank Annual Report 2023 170
2023
The higher tax charge of 31% in the Netherlands (compared to the statutory rate of 25.8%) is mainly caused
by the non-deductible Dutch bank tax (EUR 189 million) and other non-deductible expenses.
The lower tax charge in Spain is caused by a tax refund (EUR 43 million) regarding previous years.
ING continued reducing Russian-related exposure during 2023. In 2023, the local results on a stand-alone
basis were positively impacted by releases of loan loss provisions following improved macroeconomic
indicators and decrease in exposures following sales and repayments. For further information, reference is
made to Risk management.
The lower negative tax charge reported for ING Türkiye with respect to its loss is mainly caused by the non
deductibility for tax purposes of the accounting loss based on hyperinflation accounting.
2022
The higher tax charge of 39% in the Netherlands (compared to the statutory rate of 25.8%) is mainly caused
by the non-deductible Dutch bank tax (EUR 179 million) and the non-deductible impairments regarding
goodwill ING Türkiye (EUR 32 million) and TTB (EUR 165 million).
The higher positive tax charge of Türkiye combined with its accounting loss based on hyperinflation
accounting is mainly caused by the non deductibility of this loss for tax purposes.
Since the Russian invasion of Ukraine, our strategy is no new business with Russian clients, including
Russian-owned entities outside of Russia, and to get existing Russia-related credit exposures repaid as
quickly as possible. These exposures are booked in various countries and totalled EUR 6.7 billion, published
on 4 March 2022. Remaining at risk for ING Bank at year-end 2022 is EUR 0.3 billion local equity and EUR 2.5
billion credit exposures booked outside of Russia. In 2022, ING's results in connection with Russia-related
credit exposures declined significantly, as we have recognized EUR 0.5 billion risk costs related to these
exposures. The local results on a stand-alone basis were higher compared to 2021.
This was driven by the high local interest rate environment and increased rouble inflow from existing,
predominantly non-Russian, clients. Under local law and banking regulations, ING Russia must accept these
rouble inflows. Furthermore, the local result before tax expressed in EUR (EUR 128 million) was positively
impacted by the appreciation of the rouble against the euro for an amount of EUR 80 million throughout
2022. Going forward, we will continue to actively reduce our Russia-related credit exposure.
The higher tax charge in Poland is mainly caused by non-deductible regulatory and other costs.
2021
The higher tax charge of 35% in the Netherlands (compared to the statutory rate of 25%) is mainly caused
by the non-deductible Dutch bank tax (EUR 260 million) and the impairments on deferred tax assets
regarding Payvision and Yolt (EUR 26 million tax).
The lower tax charge in Austria is caused by previously not recognised tax losses (EUR -10 million tax).
The higher tax charge in Poland is mainly caused by non-deductible regulatory- and other costs.
Additional notes to the Consolidated financial statements
29 Changes in liabilities arising from financing activities

Changes in liabilities arising from financing activities
| Debt securities in issue | Subordinated Loans | Lease liabilities | Total Liabilities from financing activities
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance | 58,075 | 57,443 | 15,789 | 16,719 | 1,174 | 1,220 | 75,038 | 75,382
Cashflows: |  |  |  |  |  |  |  |
Additions | 110,477 | 81,636 | 2,225 | 983 |  |  | 112,702 | 82,620
Redemptions / Disposals | -86,061 | -78,609 | -2,894 | -1,090 | -291 | -296 | -89,246 | -79,995
Non cash changes: |  |  |  |  |  |  |  |
Amortisation | 730 | 281 | 34 | 31 | 28 | 15 | 792 | 328
Other | 403 | -66 | 12 | 8 | 256 | 239 | 670 | 180
Changes in unrealised revaluations | 1,279 | -3,746 | 473 | -1,470 |  |  | 1,752 | -5,216
Foreign exchange movement | -479 | 1,135 | -236 | 608 | -4 | -4 | -720 | 1,739
Closing balance | 84,423 | 58,075 | 15,404 | 15,789 | 1,162 | 1,174 | 100,989 | 75,038

Part of Debt securities in issue and subordinated loans are subject to fair value hedge accounting. Hence,
changes in unrealised revaluations represent fair value adjustments to the hedged item attributable to the
hedged interest rate risk. Reference is made to the paragraph 'fair value hedge accounting' in Note 33
'Derivatives and hedge accounting'.

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> 28 Information on geographical areas
ING Bank Annual Report 2023 171
30 Pensions and other post-employment benefits
Most group companies sponsor defined contribution pension plans. The assets of all ING Bank’s defined
contribution plans are held in independently administered funds. Contributions, including the defined
contribution plan in the Netherlands, are principally determined as a percentage of remuneration. These
plans do not give rise to provisions in the statement of financial position, other than relating to short-term
timing differences included in other assets and in other liabilities.
ING Bank maintains defined benefit retirement plans in some countries. These plans provide benefits that
are related to the remuneration and service of employees upon retirement. The benefits in some of these
plans are subject to various forms of indexation. The indexation is, in some cases, at the discretion of
management; in other cases it is dependent upon the sufficiency of plan assets.
Annual contributions are paid to the funds at a rate necessary to adequately finance the accrued liabilities
of the plans calculated in accordance with local legal requirements. Plans in all countries are designed to
comply with applicable local regulations governing investments and funding levels.
ING Bank provides other post-employment benefits to certain former employees. These post-employment
benefits are primarily discounts on ING products.
Defined contribution plans
ING, as part of the labour agreements with its employees, sponsors a number of defined contribution plans.
ING’s obligation is limited to contributions which are agreed in advance and also includes employee
contributions. The most significant plans are in the Netherlands and Belgium. The employer's contribution is
recognised as an expense which amounted for 2023 EUR 391 million (2022: EUR 364 million ).
Defined benefit retirement plans
Statement of financial position - Net defined benefit asset/liability

Plan assets and defined benefit obligation per country
| Plan assets | Defined benefit obligation | Funded Status
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
The Netherlands | 331 | 310 | 426 | 400 | -95 | -90
United States | 257 | 248 | 245 | 230 | 12 | 18
United Kingdom | 1,257 | 1,277 | 790 | 750 | 467 | 527
Belgium | 516 | 507 | 473 | 475 | 43 | 32
Other countries | 317 | 295 | 353 | 305 | -37 | -10
Funded status (Net defined benefit asset/liability) | 2,678 | 2,637 | 2,288 | 2,159 | 390 | 478
Presented as: |  |  |  |  |  |
- Other assets |  |  |  |  | 554 | 617
- Other liabilities |  |  |  |  | -164 | -139
|  |  |  |  | 390 | 478

The most recent (actuarial) valuations of the plan assets and the present value of the defined benefit
obligation were carried out as at 31 December 2023. The present value of the defined benefit obligation, and
the related current service cost and past service cost, were determined using the projected unit credit
method.

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> 30 Pensions and other post-employment benefits
ING Bank Annual Report 2023 172
Changes in the fair value of plan assets for the period were as follows:

Changes in fair value of plan assets
in EUR million | 2023 | 2022
Opening balance as at 1 January | 2,637 | 3,671
Interest income | 115 | 54
Remeasurements: Return on plan assets excluding amounts included in interest income | -8 | -947
Employer's contribution | 28 | 34
Participants contributions | 4 | 3
Benefits paid | -119 | -126
Exchange rate differences | 22 | -53
Closing balance | 2,678 | 2,637
Actual return on the plan assets | 107 | -894

As at 31 December 2023 the defined benefit plans did not hold any direct investments in ING Groep N.V.
(2022: nil). During 2023 and 2022 there were no purchases or sales of assets between ING and the pension
funds.
ING does not manage the pension funds and thus receives no compensation for fund management. The
pension funds have not engaged ING in any swap or derivative transactions to manage the risk of the
pension funds.
No plan assets are expected to be returned to ING Bank during 2024.
Changes in the present value of the defined benefit obligation and other post-employment benefits for the
period were as follows:

Changes in defined benefit obligation and other post-employment benefits
| Defined benefit obligation | Other post- employment benefits
in EUR million | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 2,159 | 3,115 | 29 | 72
Current service cost | 27 | 33 | 1 | 1
Interest cost | 92 | 46 | 2 | 1
Remeasurements: Actuarial gains and losses arising from changes in demographic assumptions | -9 |  |  |
Remeasurements: Actuarial gains and losses arising from changes in financial assumptions | 127 | -882 | 1 | -45
Participants’ contributions | 3 | 3 |  |
Benefits paid | -123 | -129 | -1 | -1
Past service cost | 1 |  |  | -1
Effect of curtailment or settlement |  |  |  |
Exchange rate differences | 14 | -26 | -3 | 5
Closing balance | 2,288 | 2,159 | 30 | 29

Amounts recognised directly in Other comprehensive income were as follows:

Changes in the net defined benefit assets/liability remeasurement reserve
in EUR million | 2023 | 2022
Opening balance as at 1 January | -232 | -212
Remeasurement of plan assets | -8 | -947
Actuarial gains and losses arising from changes in demographic assumptions | 9 |
Actuarial gains and losses arising from changes in financial assumptions | -127 | 882
Taxation and Exchange rate differences | 40 | 46
Total Other comprehensive income movement for the year | -85 | -19
Closing balance | -317 | -232

In 2023 EUR -8 million (2022: EUR -947 million) remeasurements of plan assets, that is recognised as a loss
in other comprehensive income, is driven by yield changes on investments. The EUR 127 million (2022: EUR
882 million) actuarial gains arising from changes in financial assumptions in the calculation of the defined
benefit obligation are mainly due to an increase in interest yield curves.

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> 30 Pensions and other post-employment benefits
ING Bank Annual Report 2023 173
The accumulated amount of remeasurements recognised directly in Other comprehensive income is EUR
-397 million(EUR -317 million after tax) as at 31 December 2023 (2022: EUR -289 million; EUR -232 million
after tax).
Amounts recognised in the statement of profit or loss related to pension and other staff-related benefits are
as follows:

Pension and other staff-related benefit costs
| Net defined benefit asset/liability | Other post-employment benefits | Total
in EUR million | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Current service cost | 27 | 33 | 33 | 1 | 1 | 1 | 28 | 34 | 34
Past service cost | 1 |  |  |  | -1 |  | 1 |  |
Net Interest cost | -23 | -8 | -6 | 2 | 1 | 2 | -21 | -6 | -4
Effect of curtailment or settlement |  |  |  |  |  | -2 |  |  | -2
Defined benefit plans | 5 | 26 | 27 | 3 | 2 | 1 | 8 | 27 | 28
Defined contribution plans |  |  |  |  |  |  | 391 | 364 | 369
Pension and other post employment benefits |  |  |  |  |  |  | 399 | 392 | 397
Other staff related benefits |  |  |  |  |  |  | 19 | -2 | 11
Pension and other staff-related benefits |  |  |  |  |  |  | 418 | 390 | 408

Determination of the net defined benefit asset/liability
The net defined benefit asset/liability is reviewed and adjusted annually. The assumptions used in the
determination of the net defined benefit asset/liability and the Other post-employment benefits include
discount rates, mortality rates, expected rates of salary increases (excluding promotion increases), and
indexation. The rates used for salary developments, interest discount factors, and other adjustments reflect
country-specific conditions.
The key assumption in the determination of the net defined benefit asset/liability is the discount rate. The
discount rate is the weighted average of the discount rates that are applied in different regions where ING
Bank has defined benefit pension plans (weighted by the defined benefit obligation). The discount rate is
based on a methodology that uses market yields on high quality corporate bonds of the specific regions
with durations matching the pension liabilities as key input. Market yields of high quality corporate bonds
reflect the yield on corporate bonds with an AA rating for durations where such yields are available. An
extrapolation is applied in order to determine the yield to the longer durations for which no AA-rated
corporate bonds are available. As a result of the limited availability of long-duration AA-rated corporate
bonds, extrapolation is an important element of the determination of the discount rate. The weighted
average discount rate applied for net defined benefit asset/liability for 2023 was 4.0% (2022: 4.3%) based on
the pension plan in the Netherlands, Germany, Belgium, the United States of America, and the United
Kingdom. The average discount rate applied for Other post-employment benefits in 2023 was 5.2% (2022:
5.5%)
Sensitivity analysis of key assumptions
ING performs sensitivity analyses on the most significant assumptions: discount rates, mortality, expected
rate of salary increase, and indexation. The sensitivity analysis has been carried out under the assumption
that the changes occurred at the end of the reporting period.
The sensitivity analysis calculates the financial impact on the defined benefit obligation of an increase or
decrease of the weighted averages of each significant actuarial assumption, all other assumptions held
constant. In practice, this is unlikely to occur, and some changes of the assumptions may be correlated.
Changes to mortality, expected rate of salary increase, and indexation would have no material impact on
the defined benefit obligation. The most significant impact would be from a change in the discount rate. An
increase or decrease in the discount rate of 1.0% creates an impact on the defined benefit obligation of EUR
238 million (decrease) and EUR 282 million (increase), respectively.
Expected cash flows
ING Bank’s subsidiaries should fund the cost of the entitlements expected to be earned on a yearly basis.
For 2024, the expected contributions to defined benefit pension plans are EUR 58 million.
The benefit payments for defined benefit and other post-employment benefits expected to be made by the
plan between 2024-2028 are estimated to be between EUR 133 million and EUR 150 million per year. From
2028 to 2032 the total payments made by the plan are expected to be EUR 738 million.

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> 30 Pensions and other post-employment benefits
ING Bank Annual Report 2023 174
31 Taxation
Statement of financial position – Deferred tax
Deferred taxes are recognised on all temporary differences under the liability method using tax rates
applicable in the jurisdictions in which ING Bank is subject to taxation.

Changes in deferred tax
in EUR million 2023 | Net liability (-) Net asset (+) opening balance | Change through equity | Change through net result | Exchange rate differences | Changes in the composition of the group and other changes | Net liability (-) Net asset (+) ending balance
Financial assets at FVOCI | 80 | -10 | -3 | -4 |  | 63
Financial assets and liabilities at FVPL | 28 |  | -44 | 13 |  | -3
Depreciation | -13 |  | -6 | 3 | 4 | -13
Cash flow hedges | 752 | -251 |  | 1 |  | 502
Pension and post-employment benefits | -54 | 31 | -7 | -4 |  | -33
Other provisions | 59 |  | -12 | -3 | 4 | 48
Loans and advances | 612 | 8 | -140 | -6 | 2 | 475
Unused tax losses carried forward | 327 |  | -128 | 11 | -1 | 209
Other | -251 | 13 | 90 | -2 | -4 | -154
| 1,539 | -209 | -249 | 10 | 5 | 1,096
Presented in the statement of financial position as: |  |  |  |  |  |
– Deferred tax liabilities | -257 |  |  |  |  | -184
– Deferred tax assets | 1,796 |  |  |  |  | 1,280
| 1,539 |  |  |  |  | 1,096

The above table shows netted deferred tax amounts related to right-of-use assets and lease liabilities
included in the row ‘Other’, and includes a deferred tax amount for right-of-use assets of EUR 195 million
(2022: EUR 205 million and 2021: EUR 220 million) and a deferred tax amount for lease liabilities of EUR 217
million (2022: EUR 231 million and 2021: EUR 252 million).
Financial assets and liabilities at FVPL changes through net result in 2023 (EUR -44 million) and 2022 (EUR
-88 million) relates to the decrease in fair value of derivatives due to increased interest yield curves.
The deferred tax on cash flow hedges relate to floating rate lending with interest rate swaps. Due to
decreased (longer-term) interest rate yield curve in 2023 there was a positive revaluation of the cash flow
hedge through other comprehensive income. This resulted in a decline in the deferred tax asset by EUR -251
million compared to the increase in deferred tax assets in 2022 by EUR 875 million due to the increase in the
interest yield curve. The deferred tax asset in cash flow hedges decreased from EUR 752 million in 2022 to
EUR 502 million in 2023.
The deferred tax on Loans and advances changes through net result in 2023 EUR -140 million (2022: EUR
177 million ) relates mainly to valuation changes of collectively assessed expected credit losses.
The deferred tax changes through equity - Other in 2023 of EUR 13 million (2022: EUR -123 million) is due to
FX developments following the USD depreciation and the application of IAS 29 Hyperinflation in Türkiye and
also due to the decline in the Credit Liability Reserve due to credit spread tightening.

Changes in deferred tax
in EUR million 2022 | Net liability (-) Net asset (+) opening balance | Change through equity | Change through net result | Exchange rate differences | Changes in the composition of the group and other changes | Net liability (-) Net asset (+) ending balance
Financial assets at FVOCI | -70 | 148 | 5 | -3 |  | 80
Financial assets and liabilities at FVPL | 107 |  | -88 | 9 |  | 28
Depreciation | -7 |  | -5 | -2 |  | -13
Cash flow hedges | -126 | 875 |  | 2 |  | 752
Pension and post-employment benefits | -49 | 6 | -13 | 8 | -7 | -54
Other provisions | 19 |  | 44 | -4 |  | 59
Loans and advances | 430 |  | 177 | -3 | 7 | 612
Unused tax losses carried forward | 199 |  | 137 | -8 |  | 327
Other | -148 | -123 | 26 | -6 |  | -251
Total | 354 | 907 | 283 | -5 |  | 1,539
Presented in the statement of financial position as: |  |  |  |  |  |
– deferred tax liabilities | -603 |  |  |  |  | -257
– deferred tax assets | 957 |  |  |  |  | 1,796
| 354 |  |  |  |  | 1,539

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> 31 Taxation
ING Bank Annual Report 2023 175

Deferred tax in connection with unused tax losses carried forward
in EUR million | 2023 | 2022
Total unused tax losses carried forward | 1,870 | 2,668
Unused tax losses carried forward not recognised as a deferred tax asset | 815 | 937
Unused tax losses carried forward recognised as a deferred tax asset | 1,055 | 1,731
Average tax rate | 19.9% | 21.1%
Deferred tax asset | 209 | 365

Total unused tax losses carried forward analysed by expiry terms
| No deferred tax asset recognised | Deferred tax asset recognised
in EUR million | 2023 | 2022 | 2023 | 2022
Within 1 year |  |  |  | 591
More than 1 year but less than 5 years | 126 | 120 | 633 | 587
More than 5 years but less than 10 years | 9 | 9 | 2 | 2
More than 10 years but less than 20 years |  |  |  |
Unlimited | 681 | 808 | 421 | 550
| 815 | 937 | 1,055 | 1,731

The above-mentioned deferred tax asset of EUR 209 million ( 2022: EUR 365 million) and the related unused
tax losses carried forward exclude t he recapture of tax losses originated in th e United Kingdom previously
deducted in the Netherlands for the amount of EUR 0 million (2022 EUR 37 million).
Deferred tax assets are recognised for temporary deductible differences, for tax losses carried forward and
unused tax credits only to the extent that realisation of the related tax benefit is probable.

Breakdown of certain net deferred tax asset positions by jurisdiction
in EUR million | 2023 | 2022
Poland | 244 | 391
France | 0 | 70
Slovakia | 1 | 0
China | 2 | 0
Australia | 1 | 0
Hong Kong | 8 | 6
United States of America |  | 1
Türkiye | 41 | 7
Taiwan | 11 | 8
| 308 | 483

The table above includes a breakdown of certain net deferred tax asset positions by jurisdiction for which
the utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits arising
from the reversal of existing taxable temporary differences whilst the related entities have incurred losses in
either the current or the preceding year.
In 2023, ING Bank Slaski (Poland) realised a tax profit following the value changes of the cash flow hedge
derivatives which are settled net via a central clearing party, whereas in 2022 and 2021 ING Bank Slaski
incurred a tax loss following the large value changes of the cash flow hedge derivatives. This tax loss can be
carried forward for five years. Based on a taxable profit forecast, ING considers it probable that the future
taxable profits will compensate for this tax loss carry forward position. Based on this a remaining deferred
tax asset on unused tax losses carried forward, as per 31 December 2023: EUR 120 million (2022: EUR 224
million is recognised. The remaining net deferred tax asset in Poland of EUR 124 million (2022: EUR 167
million) relates to temporary tax differences on loans and advances and financial assets at fair value
through profit and loss.
Recognition is based on the fact that it is probable that the entity will have taxable profits and/or can utilise
tax planning opportunities before expiration of the deferred tax assets. Changes in circumstances in future
periods may adversely impact the assessment of the recoverability. The uncertainty of the recoverability is
taken into account in establishing the deferred tax assets.
At 31 December 2022 and 2023, ING Bank had no significant temporary differences associated with the
parent company’s investments in subsidiaries and associates as any economic benefit from those
investments will not be taxable at parent company level.

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> 31 Taxation
ING Bank Annual Report 2023 176
Statement of profit or loss – Taxation

Taxation by type
| Netherlands | Rest of the world | Total
in EUR million | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Current taxation | 558 | 496 | 459 | 2,120 | 1,510 | 1,447 | 2,677 | 2,006 | 1,906
Deferred taxation | -45 | -79 | 47 | 293 | -204 | -78 | 249 | -283 | -30
| 513 | 417 | 507 | 2,413 | 1,306 | 1,369 | 2,926 | 1,723 | 1,876

Reconciliation of the weighted average statutory income tax rate to ING Bank’s effective income tax rate
in EUR million | 2023 | 2022 | 2021
Result before tax from continuing operations | 10,318 | 5,493 | 6,774
Weighted average statutory tax rate | 25.5% | 24.8% | 24.3%
Weighted average statutory tax amount | 2,634 | 1,363 | 1,645
Permanent differences affecting current tax |  |  |
Participation exemption | -43 | -64 | -68
Other income not subject to tax | -68 | -40 | -32
Expenses not deductible for tax purposes | 398 | 403 | 201
Current tax from previously unrecognised amounts | 1 | 10 | 51
State and local taxes | 99 | 68 | 64
Adjustments to prior periods | -72 | -29 | -12
Differences affecting deferred tax |  |  |
Impact on deferred tax from change in tax rates | 2 | 5 | 9
Deferred tax benefit from previously unrecognised amounts | -30 | -3 | -18
Write-off/reversal of deferred tax assets | 4 | 10 | 37
Effective tax amount | 2,926 | 1,723 | 1,876
Effective tax rate | 28.4% | 31.4% | 27.7%

The weighted average statutory tax rate in 2023 ( 25.5%) increased compared to that of 2022 (24.8%).
The effective tax rate of 28.4% in 2023 is higher than the weighted average statutory tax rate. This is mainly
caused by the impact in 2023 of the following non-deductible items for income tax purposes: hyperinflation
accounting loss in Türkiye, Thincap rules on grossing or netting of interest flows for the cash pool
agreements and non deductible expenses in various countries.
The weighted average statutory tax rate in 2022 (24.8%) was higher than the rate of 24.3% in 2021.
The effective tax rate of 31.4% in 2022 was higher than the weighted average statutory tax rate. This is
mainly caused by the impact in 2022 of the following non-deductible items income tax purposes:
hyperinflation accounting loss in Türkiye, impairments on TTB and interest expenses in various countries.
Equity – Other comprehensive income

Income tax related to components of other comprehensive income
in EUR million | 2023 | 2022 | 2021
Unrealised revaluations financial assets at fair value through other comprehensive income and other revaluations | -7 | 140 | 14
Realised gains/losses transferred to the statement of profit or loss (reclassifications from equity to profit or loss) | -3 | 8 | 12
Changes in cash flow hedge reserve | -251 | 875 | 233
Remeasurement of the net defined benefit asset/liability | 31 | 6 | -54
Changes in fair value of own credit risk of financial liabilities at fair value through profit or loss | 2 | 19 | -8
Exchange rate differences and other | 19 | -141 | -77
Total income tax related to components of other comprehensive income | -209 | 907 | 120

32 Fair value of assets and liabilities
a) Valuation Methods
The estimated fair values represent the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. It is a market-
based measurement, which is based on assumptions that market participants would use and takes into
account the characteristics of the asset or liability that market participants would take into account when
pricing the asset or liability.
Fair values of financial assets and liabilities are based on quoted prices in active market where available.
When such quoted prices are not available, the fair value is determined by using valuation techniques.
In 2023, the financial markets were characterised by elevated levels of volatility. In the first quarter of the
year, the markets worldwide were shaken by the demise of SVB bank and the stress surrounding Credit
Suisse, fuelling uncertainty around possible additional defaults. Furthermore, the ongoing interest rate hikes
by the central banks in Europe and the US led to a fast increase in rates worldwide. Towards the end of the

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ING Bank Annual Report 2023 177
year, the probability increased for interest rates to go down, which has been reflected in the forward
interest rates. Additionally, geopolitical risk increased with the Israel-Gaza conflict adding to the risk arising
from the ongoing Russia-Ukraine war.
Financial assets and liabilities, including Level 3, are valued using agreed methodologies, targeting the most
appropriate estimate of fair value.
b) Valuation control framework
The valuation control framework covers the product approval process (PARP), pricing, market data
assessment and independent price verification (IPV), valuation adjustments, model use, fair value hierarchy
and day one profit or loss. Valuation processes are governed by various governance bodies, including Local
Parameter Committees, Global Valuation and Impairment Committee, Market Data Committee and
Valuation Model Committee. All relevant committees meet on a regular basis (monthly/quarterly), where
agenda covers the aforementioned valuation controls.
The Global Valuation and Impairment Committee is responsible for the oversight and the approval of the
outcome of impairments (other than loan loss provisions) and valuation processes. It oversees the quality
and coherence of valuation methodologies and performance. The Valuation Model Committee is responsible
for the approval of all valuation models used for the Fair valuation (IFRS) and Prudent Valuation (CRR) of
positions measured at fair value. The Local Parameter Committee discusses the valuation results and
monitors the performance of the valuation activities carried out on local or regional level. The Global
Financial Markets Parameter Committee reviews the consolidated valuation outcome and resulting P&L for
Financial Market products, targeting a globally consistent treatment across Financial Market. The Market
Data Committee is responsible for the approval of the market data used in valuation.
c) Valuation Adjustments
Valuation adjustments are an integral part of the fair value. They are the adjustments to the output from a
valuation technique in order to appropriately determine a fair value in accordance with IFRS13. ING
considers various fair value adjustments including Bid-Offer adjustments, Model Risk adjustments, Bilateral
Valuation Adjustments (BVA, consisting of Credit Valuation Adjustments or CVA, and Debit valuation
Adjustments or DVA), Collateral Valuation Adjustment (CollVA) and Funding Valuation Adjustment (FVA).
For financial instruments where the fair value at initial recognition is based on one or more significant
unobservable inputs, a difference between the transaction price and the fair value resulting from the
internal valuation process can occur. Such difference is referred to as Day One Profit or Day One Loss
(hereafter: DOP). ING defers material Day One Profit or Loss of instruments with significant unobservable
valuation inputs, which are the financial instruments classified as Level 3 and financial instruments with
material unobservable inputs into CVA which are not necessarily classified as Level 3. The DOP is amortised
over the life of the instrument, or until the significant unobservable inputs become observable, or until the
significant unobservable inputs become non-significant. Both the impact on the profit and loss in 2023 and
the DOP reserve is disclosed in the below table.
Deferred Day One Profit or Loss Reserve
The table below summarizes the movement in the aggregate DOP not recognised when financial
instruments were initially recognised, because of the use of valuation techniques for which not all the inputs
were market observable data.

Deferred day one profit or loss reserve 1
in EUR million | 2023 | 2022
Opening balance at 1 January | -108 | -7
DOP deferred on new transactions during the period | -83 | -107
DOP recognised in the statement of profit or loss during the period: |  |
• of which release | 85 | 6
• of which amortisation and exchange differences | 15 | 0
Closing balance at 31 December | -90 | -108

The following table presents the models reserves for financial assets and liabilities.

Valuation adjustment reserves on financial assets and liabilities
in EUR million | 2023 | 2022
Deferred Day One Profit or Loss | -90 | -108
Own credit adjustments | 34 | 75
Bid/Offer | -154 | -216
Model Risk | -26 | -13
CVA | -131 | -192
DVA | 55 | 99
CollVA | -4 | -8
FVA | -68 | -78
Total Valuation Adjustments | -385 | -441

Own Credit Adjustment
Own issued debt and structured notes that are designated at fair value through profit or loss are adjusted
for ING`s own credit risk by means of DVA.
Bid-Offer Adjustment
For positions priced based upon mid-market input parameters, Bid-Offer adjustments are required in order

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 178
to reflect the valuation of that position based on bid price or offer price. In practice this adjustment accounts
for the difference in valuation from ‘mid to bid’ and ‘mid to offer’ for long and short exposures respectively.
In principle assets are valued at the bid prices and liabilities are valued at the offer price. For certain assets
or liabilities, where a market quoted price is not available, the price used is the fair value that is most
representative within the bid-offer spread.
Model Risk Adjustment
Financial instruments that are valued using a valuation model can be subject to model risk. Model risk is the
risk of possible financial loss resulting from pricing model or model-based parameter deficiencies and/or
uncertainties.
Bilateral Valuation Adjustments (Credit and Debit Valuation Adjustments)
Bilateral Valuation Adjustment is the valuation adjustment reflecting the counterparty credit risk of
derivative contracts. It has a bilateral nature, where both the counterparty’s credit risk (i.e. Credit Valuation
Adjustment or CVA) and ING’s own credit risk (Debit Valuation Adjustment or DVA) are taken into account:
• CVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
the counterparty defaults (i.e. it is the market value of the counterparty’s credit risk).
• DVA is the fair value adjustment applicable to derivative instruments to account for the possibility that
ING defaults (i.e. it is the market value of ING’s credit risk).
The calculation of CVA and DVA on derivatives is based on their expected exposures, the counterparties’ and
ING’s risk of default, taking into account the collateral agreements as well as netting agreements. The
counterparties’ risk of default is measured by probability of default and expected loss given default, which is
based on market information including credit default swap (CDS) spreads. Where counterparty CDS spreads
are not available, relevant proxy spreads are used. Additionally, wrong-way risk (which occurs when the
probability of default by the counterparty increases (decreases) when ING’s exposure to the counterparty
increases (decreases)) and right-way risk (which occurs when the probability of default by the counterparty
increases (decreases) when ING’s exposure to the counterparty decreases (increases)) are included in the
adjustment.
Collateral Valuation Adjustment (CollVA)
Collateral Valuation Adjustment is a fair valuation adjustment applied on derivative instruments to capture
specific features of CSA (Credit Support Annex) with a counterparty that the regular OIS discounting
framework does not capture. Non-standard CSA features may include deviations in relation to the
currencies in which ING posts or receives collateral, deviations in remuneration rate on collateral which may
pay lower or higher rate than overnight rate or even no interest at all; other deviations can be posting
securities rather than cash as collateral, etc.
Funding Valuation Adjustment (FVA)
Funding Valuation Adjustment (FVA) is a fair valuation adjustment applied on derivative instruments to
address the asymmetry in funding costs or funding benefits between collateralized and uncollateralized
derivatives portfolios. This adjustment is based on the expected exposure profiles of the uncollateralized or
partially collateralized OTC derivatives and market-based funding spreads.
d) Fair value hierarchy
ING Bank has categorised its financial instruments that are either measured in the statement of financial
position at fair value or of which the fair value is disclosed, into a three level hierarchy based on the
observability of the valuation inputs. Highest priority is retained to unadjusted quoted prices in active
markets for identical assets or liabilities and the lowest priority to valuation techniques supported by
unobservable inputs.
Transfers into and transfers out of fair value hierarchy levels are made on a quarterly basis at the end of the
reporting period.
Level 1 – (Unadjusted) quoted prices in active markets
This category includes financial instruments whose fair value is determined directly by reference to
(unadjusted) quoted prices in an active market. A financial instrument is regarded as quoted in an active
market if quoted prices are readily and regularly available from an exchange, dealer markets, brokered
markets, or principal to principal markets. Those prices represent actual and regularly occurring market
transactions with sufficient frequency and volume to provide pricing information on an ongoing basis.
Transfers out of Level 1 into Level 2 or Level 3 occur when ING Bank establishes that markets are no longer
active and therefore (unadjusted) quoted prices no longer provide reliable pricing information.
Level 2 – Valuation technique supported by observable inputs
This category includes financial instruments whose fair value is based on market observable inputs, either
directly or indirectly, other than quoted prices included within Level 1. The fair value for financial
instruments in this category can be determined by reference to quoted prices for similar instruments in
active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other
than quoted prices that are observable or market-corroborated inputs. ING analyses how the prices are
derived and determines whether the prices are liquid tradable prices or model-based consensus prices
taking various data as inputs.
For financial instruments that do not have a reference price available, fair value is determined using a
valuation technique (e.g., a model), where inputs in the model are taken from an active market or are
observable, such as interest rates and yield curves observable at commonly quoted intervals, implied
volatilities, and credit spreads.
Instruments, where inputs are unobservable are classified in this category, provided that the impact of
those unobservable inputs on the overall valuation is insignificant. The notion of significant is particularly

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 179
relevant for the distinction between Level 2 and Level 3 assets and liabilities, as the significance assessment
of the valuation input on the entire fair value measurement will determine whether the instrument should
be classified as Level 2 or Level 3. Expert judgement is required on the significance assessment approach.
Level 3 – Valuation technique supported by unobservable inputs
This category includes financial instruments whose fair value is determined using a valuation technique for
which a significant part of the overall valuation is driven by unobservable valuation inputs. Where valuation
inputs are unobservable, the Group must use the best information available to value the instruments. This
may require internally derived inputs taking into account market participants assumptions that are
reasonably available, including assumptions on the risk inherent in a particular valuation technique used to
measure fair value and the risk inherent in the inputs to the valuation technique. Unobservable inputs may
include, among others, volatility, correlation, spreads to discount rates, default rates, recovery rates,
prepayment rates, and certain credit spreads.
Financial instruments at fair value
The fair values of the financial instruments were determined as follows:

Methods applied in determining fair values of financial assets and liabilities (carried at fair value)
| Level 1 | Level 2 | Level 3 | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Financial Assets |  |  |  |  |  |  |  |
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |
- Equity securities | 15,449 | 11,787 | 3 | 2 | 150 | 156 | 15,602 | 11,945
- Debt securities | 4,825 | 1,636 | 4,081 | 5,361 | 3,364 | 3,450 | 12,270 | 10,447
- Derivatives | 39 | 22 | 27,134 | 34,229 | 535 | 483 | 27,708 | 34,734
- Loans and receivables |  |  | 63,316 | 54,097 | 4,131 | 2,547 | 67,446 | 56,644
| 20,314 | 13,445 | 94,533 | 93,690 | 8,179 | 6,635 | 123,026 | 113,770
Financial assets at fair value through other comprehensive income |  |  |  |  |  |  |  |
- Equity securities | 1,622 | 1,639 |  |  | 263 | 247 | 1,885 | 1,887
- Debt securities | 35,848 | 25,644 | 2,433 | 3,451 |  |  | 38,281 | 29,095
- Loans and receivables |  |  | 275 |  | 676 | 643 | 951 | 643
| 37,470 | 27,284 | 2,707 | 3,451 | 938 | 891 | 41,116 | 31,625
Financial liabilities |  |  |  |  |  |  |  |
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |
– Debt securities | 575 | 444 | 7,603 | 5,574 | 47 | 53 | 8,224 | 6,072
– Deposits |  |  | 57,607 | 50,803 | 13 |  | 57,620 | 50,803
– Trading securities | 3,604 | 1,952 | 41 | 273 |  | 1 | 3,645 | 2,226
– Derivatives | 41 | 40 | 24,437 | 33,200 | 670 | 678 | 25,148 | 33,917
| 4,220 | 2,436 | 89,687 | 89,851 | 729 | 732 | 94,637 | 93,019

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 180
The following methods and assumptions were used by ING Bank to estimate the fair value of the financial
instruments:
Equity securities
Instrument description: Equity securities include stocks and shares, corporate investments and private
equity investments.
Valuation: If available, the fair values of publicly traded equity securities and private equity securities are
based on quoted market prices. In absence of active markets, fair values are estimated by analysing the
investee’s financial position, result, risk profile, prospect, price, earnings comparisons and revenue multiples.
Additionally, reference is made to valuations of peer entities where quoted prices in active markets are
available. For equity securities best market practice will be applied using the most relevant valuation
method. All non-listed equity investments, including investments in private equity funds, are subject to a
standard review framework which ensures that valuations reflect the fair values.
Fair value hierarchy: The majority of equity securities are publicly traded and quoted prices are readily and
regularly available. Hence, these securities are classified as Level 1. Equity securities which are not traded in
active markets mainly include corporate investments, fund investments and other equity securities and are
classified as Level 3.
Debt securities
Instrument description: Debt securities include government bonds, financial institutions bonds and Asset-
backed securities (ABS).
Valuation: Where available, fair values for debt securities are generally based on quoted market prices.
Quoted market prices are obtained from an exchange market, dealer, broker, industry group, pricing service,
or regulatory service. The quoted prices from non-exchange sources are reviewed on their tradability of
market prices. If quoted prices in an active market are not available, fair value is based on an analysis of
available market inputs, which includes consensus prices obtained from one or more pricing services.
Furthermore, fair values are determined by valuation techniques discounting expected future cash flows
using market interest rate curves, referenced credit spreads, maturity of the investment, and estimated
prepayment rates where applicable.
Fair value hierarchy: Government bonds and financial institutions bonds are generally traded in active
markets, where quoted prices are readily and regularly available and are hence, classified as Level 1. The
remaining positions are classified as Level 2 or Level 3. Asset backed securities for which no active market is
available and a wide discrepancy in quoted prices exists, are classified as Level 3.
Derivatives
Instrument description: Derivatives contracts can either be exchange-traded or over the counter (OTC).
Derivatives include interest rate derivatives, FX derivatives, Credit derivatives, Equity derivatives and
commodity derivatives.
Valuation: The fair value of exchange-traded derivatives is determined using quoted market prices in an
active market and are classified as Level 1 of the fair value hierarchy. For instruments that are not actively
traded, fair values are estimated based on valuation techniques. OTC derivatives and derivatives trading in
an inactive market are valued using valuation techniques. The valuation techniques and inputs depend on
the type of derivatives and the nature of the underlying instruments. The principal techniques used to value
these instruments are based on (amongst others) discounted cash flows, option pricing models and Monte
Carlo simulations. These valuation models calculate the present value of expected future cash flows, based
on ‘no-arbitrage’ principles. The models are commonly used in the financial industry and inputs to the
validation models are determined from observable market data where possible. Certain inputs may not be
observable in the market, but can be determined from observable prices via valuation model calibration
procedures. These inputs include prices available from exchanges, dealers, brokers or providers of pricing,
yield curves, credit spreads, default rates, recovery rates, dividend rates, volatility of underlying interest
rates, equity prices, and foreign currency exchange rates and reference is made to quoted prices, recently
executed trades, independent market quotes and consensus data, where available.
For uncollateralised OTC derivatives, ING applies Credit Valuation Adjustment to correctly reflect the
counterparty credit risk in the valuation and Debit Valuation Adjustments to reflect the credit risk of ING for
its counterparty. In addition, for these derivatives ING applies Funding Valuation Adjustment. See sections
CVA/DVA and FVA in section c) Valuation Adjustments for more details regarding the calculation.
Fair value hierarchy: The majority of the derivatives are priced using observable inputs and are classified as
Level 2. Derivatives for which the input cannot be implied from observable market data are classified as
Level 3.
Loans and receivables
Instrument description: Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables carried at fair value includes
trading loans, being securities lending and similar agreement comparable to collateralised lending,
syndicated loans, loans expected to be sold and receivables with regards to reverse repurchase
transactions.
Valuation: The fair value of loans and receivables is generally estimated by discounting expected future cash
flows using a discount rate that reflects credit risk, liquidity, and other current market conditions. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour.
Fair value hierarchy: Loans and receivables are predominantly classified as Level 2. Loans and receivables
for which current market information about similar assets to use as observable, corroborated data for all
significant inputs into a valuation model is not available, are classified as Level 3.
Financial liabilities at fair value through profit and loss
Instrument description: Financial liabilities at fair value through profit and loss include debt securities, debt
instruments, primarily comprised of structured notes, which are held at fair value under the fair value
option. Besides that, it includes derivative contracts and repurchase agreements.
Valuation: The fair values of securities in the trading portfolio and other liabilities at fair value through profit
or loss are based on quoted market prices, where available. For those securities not actively traded, fair
values are estimated based on internal discounted cash flow valuation techniques using interest rates and

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 181
credit spreads that apply to similar instruments.
Fair value hierarchy: The majority of the derivatives and debt instruments are classified as Level 2.
Derivatives and debt instruments for which the input cannot be derived from observable market data are
classified as Level 3.
e) Transfers between Level 1 and 2
As a consequence of change in observable inputs, ING recorded an EUR 2.4 billion transfer from Level 2 to
Level 1 in debt securities measured at fair value through other comprehensive income. Furthermore, EUR
1.7 billion transfers from Level 1 to Level 2 were recorded in the reporting period 2023.
f) Level 3: Valuation techniques and inputs used
Financial assets and liabilities in Level 3 include both assets and liabilities for which the fair value was
determined using (i) valuation techniques that incorporate unobservable inputs as well as (ii) quoted prices
which have been adjusted to reflect that the market was not actively trading at or around the balance sheet
date. Unobservable inputs are inputs which are based on ING’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 31 December 2023 of EUR 9.1 billion
( 31 December 2022: EUR 7.5 billion), an amount of EUR 7.0 billion (76.7%) (31 December 2022: EUR 2.2
billion, being 29.2%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING’s own unobservable inputs.
Furthermore, Level 3 financial assets includes approximately EUR 0.3 billion (31 December 2022: EUR 4.2
billion) which relates to financial assets that are part of structures that are designed to be fully neutral in
terms of market risk. Such structures include various financial assets and liabilities for which the overall
sensitivity to market risk is insignificant. Whereas the fair value of individual components of these structures
may be determined using different techniques and the fair value of each of the components of these
structures may be sensitive to unobservable inputs, the overall sensitivity is by design not significant.
The remaining EUR 1.8 billion (31 December 2022: EUR 1.1 billion of the fair value classified in Level 3
financial assets is established using valuation techniques that incorporates certain inputs that are
unobservable.
Of the total amount of financial liabilities classified as Level 3 as at 31 December 2023 of EUR 0.7 billion
(31 December 2022: EUR 0.7 billion), an amount of EUR 0.4 billion (50.0%) (31 December 2022: EUR 0.02
billion, being 2.5%) is based on unadjusted quoted prices in inactive markets. As ING does not generally
adjust quoted prices using its own inputs, there is no significant sensitivity to ING’s own unobservable inputs.
Furthermore, Level 3 financial liabilities includes approximately EUR 0.3 billion (31 December 2022: EUR 0.6
billion) which relates to financial liabilities that are part of structures that are designed to be fully neutral in
terms of market risk. As explained above, the fair value of each of the components of these structures may
be sensitive to unobservable inputs, but the overall sensitivity is by design not significant.
The remaining EUR 0.1 billion (31 December 2022: EUR 0.1 billion of the fair value classified in Level 3
financial liabilities is established using valuation techniques that incorporates certain inputs that are
unobservable.
The table below provides a summary of the valuation techniques, key unobservable inputs and the lower
and upper range of such unobservable inputs, by type of Level 3 asset/liability. The lower and upper range
mentioned in the overview represent the lowest and highest variance of the respective valuation input as
actually used in the valuation of the different financial instruments. Amounts and percentages stated are
unweighted. The range can vary from period to period subject to market movements and change in Level 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 analysis of unobservable inputs (Level 3).

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 182

Valuation techniques and range of unobservable inputs (Level 3)
| Assets | Liabilities | Valuation techniques | Significant unobservable inputs | Lower range | Upper range
In EUR million | 2023 | 2022 | 2023 | 2022 |  |  | 2023 | 2022 | 2023 | 2022
At fair value through profit or loss |  |  |  |  |  |  |  |  |  |
Debt securities | 3,364 | 3,447 | 0 | 1 | Price based | Price (%) | 0% | 0% | 122% | 125%
|  |  |  |  |  | Price (price per share) | 97 | 208 | 236 | 208
|  |  |  |  | Present value techniques | Credit spread (bps) | 94 | 60 | 94 | 100
|  |  |  |  |  | Price (%) | n.a. | 97% | n.a. | 100%
Equity securities | 150 | 156 |  |  | Price based | Price (price per share) | 0 | 0 | 5,457 | 5,457
Loans and advances | 2,298 | 1,485 | 13 |  | Price based | Price (%) | 0% | 0% | 117% | 100%
|  |  |  |  | Present value techniques | Credit spread (bps) | 1 | 2 | 12 | 12
(Reverse) repo's | 1,832 | 1,062 |  |  | Present value techniques | Interest rate (%) | n.a. | 3% | n.a. | 5%
Structured notes |  | 3 | 47 | 53 | Price based | Price (%) | 88% | 84% | 96% | 107%
|  |  |  |  | Option pricing model | Equity volatility (%) | 9% | 13% | 23% | 42%
|  |  |  |  |  | Equity/Equity correlation | 0.8 | 0.5 | 0.9 | 1.0
|  |  |  |  |  | Equity/FX correlation | -0.2 | -0.4 | 0.6 | 0.6
|  |  |  |  |  | Dividend yield (%) | 0% | 0% | 4% | 8%
|  |  |  |  | Present value techniques | Credit spreads (bps) | 100 | 96 | 101 | 96
Derivatives |  |  |  |  |  |  |  |  |  |
– Rates | 283 | 431 | 301 | 476 | Option pricing model | Interest rate volatility (bps) | 1 | 49 | 3 | 148
|  |  |  |  | Present value techniques | Reset spread (%) | n.a. | 0% | n.a. | 1%
|  |  |  |  |  | Interest rate (%) | n.a. | 2% | n.a. | 2%
|  |  |  |  |  | Prepayment rate (%) | 0% | 5% | 0% | 13%
– FX | 2 | 5 | 3 | 4 | Option pricing model | Implied volatility (%) | 3% | 6% | 18% | 20%
– Credit | 216 | 13 | 343 | 175 | Present value techniques | Credit spread (bps) | 3 | 5 | 149 | 623
|  |  |  |  | Price based | Price (%) | 0% | 0% | 100% | 100%
– Equity | 20 | 33 | 17 | 22 | Option pricing model | Equity volatility (%) | 12% | 0% | 75% | 77%
|  |  |  |  |  | Equity/Equity correlation | 0.2 | 0.5 | 1.0 | 0.9
|  |  |  |  |  | Equity/FX correlation | -0.5 | -0.5 | 1.0 | 0.1
|  |  |  |  |  | Dividend yield (%) | 0% | 1% | 14% | 14%
|  |  |  |  | Price based | Price (%) | 0% | n.a | 21% | n.a
– Other | 14 | 1 | 7 |  | Option pricing model | Commodity volatility (%) | 11% | 0% | 94% | 63%
At fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |
– Loans and advances | 676 | 643 |  |  | Present value techniques | Prepayment rate (%) | n.a. | 6% | n.a. | 6%
|  |  |  |  | Price based | Price (%) | 85% | 67% | 96% | 99%
– Equity | 263 | 247 |  |  | Present value techniques | Credit spread (bps) | 5.2 | 6.7 | 5.2 | 6.7
|  |  |  |  |  | Interest rate (%) | 4% | 4% | 4% | 4%
|  |  |  |  | Price based | Price (%) | 122% | n.a | 122% | n.a
|  |  |  |  | Price based | Other (EUR) | n.a | 70 | n.a | 90
Total | 9,117 | 7,526 | 729 | 732 |  |  |  |  |  |

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 183
Price
For securities where market prices are not available, fair value is measured by comparison with observable
pricing data from similar instruments. Prices of 0% are distressed to the point that no recovery is expected,
while prices significantly in excess of 100% or par are expected to pay a yield above current market rates.
Credit spreads
Credit spread is the premium above a benchmark interest rate required by the market participant to accept
a lower credit quality. Higher credit spreads indicate lower credit quality and a lower value of an asset.
Volatility
Volatility is a measure for variation of the price of a financial instrument or other valuation input over time.
Volatility is one of the key inputs in option pricing models. Typically, the higher the volatility, the higher
value of the option. Volatility varies by the underlying reference (equity, commodity, foreign currency and
interest rates), by strike, and maturity of the option. The minimum level of volatility is 0% and there is no
theoretical maximum.
Correlation
Correlation is a measure of dependence between two underlying references which is relevant for valuing
derivatives and other instruments having more than one underlying reference. High positive correlation
(close to 1) indicates strong positive (statistical) relationship, where underliers move, everything else equal,
into the same direction. The same holds for a high negative correlation.
Interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or
borrowed.
Reset spread
Reset spreads are key inputs to mortgage linked prepayment swaps valuation. Reset spread is the future
spread at which mortgages will re-price at interest rate reset dates.
Dividend yield
Dividend yield is an important input for equity option pricing models showing how much dividends a
company is expected to pay out each year relative to its share price. Dividend yields are generally expressed
as an annualised percentage of share price.
Prepayment rate
Prepayment rate is a key input to mortgage and loan valuation. Prepayment rate is the estimated rate at
which mortgage borrowers will repay their mortgages early, e.g. 5% per year. Prepayment rate and reset
spread are key inputs to mortgage linked prepayment swaps valuation.

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 184
Level 3: Changes during the period

Changes in Level 3 Financial assets
| Trading assets | Non-trading derivatives | Financial assets mandatorily at FVPL | Financial assets designated at FVPL | Financial assets at FVOCI | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 873 | 822 | 421 | 1 | 1,849 | 1,862 | 3,492 | 2,480 | 891 | 1,063 | 7,526 | 6,228
Realised gain/loss recognised in the statement of profit or loss during the period 1 | 235 | 53 | -142 | 52 | -33 | -57 | -383 | 122 |  | 8 | -322 | 178
Revaluation recognised in other comprehensive income during the period 2 |  |  |  |  |  |  |  |  | -6 | -84 | -6 | -84
Purchase of assets | 1,246 | 694 | 76 | 15 | 2,208 | 1,586 | 873 | 772 | 331 | 221 | 4,735 | 3,288
Sale of assets | -889 | -49 | -55 | -4 | -1,109 | -669 | -138 | -191 | -243 | -275 | -2,433 | -1,187
Maturity/settlement | -1,005 | -511 | -15 | -2 | -576 | -617 | -292 |  | -22 | -59 | -1,910 | -1,188
Reclassifications |  |  |  |  | 723 | -18 |  |  | 5 | 10 | 728 | -8
Transfers into Level 3 | 879 | 288 |  | 474 | 981 | 605 | 1 | 322 |  | -43 | 1,860 | 1,646
Transfers out of Level 3 | -459 | -442 |  | -115 | -534 | -856 |  |  |  |  | -994 | -1,414
Exchange rate differences | -31 | 18 |  |  | -9 | 14 | -9 | -12 | -10 | 49 | -59 | 68
Changes in the composition of the group and other changes |  |  |  |  |  |  | 2 |  | -8 |  | -6 |
Closing balance | 848 | 873 | 286 | 421 | 3,499 | 1,849 | 3,547 | 3,492 | 938 | 891 | 9,118 | 7,526

1 Net gains/losses were recorded as ‘Valuation results and net trading income’ in the statement of profit or loss. The total amounts includes EUR 316 million (2022: EUR -171 million) of unrealised gains and losses recognised in the statement of profit or loss.
2 Revaluation recognised in other comprehensive income is included on the line ‘Net change in fair value of debt instruments at fair value through other comprehensive income’.
In 2023, transfers into and out of Level 3 of financial assets mandatorily at fair value mainly relate to (long
term) reverse repurchase transactions for which the valuation being significantly impacted by unobservable
inputs and no longer significantly impacted by unobservable inputs, respectively.
In 2023, the transfer into Level 3 trading assets is mainly driven by debt securities that are part of a
structure transferred into level 3 due to market illiquidity which decreased observability for an input.
In 2022, the transfers into Level 3 mainly consisted of (non) trading derivatives that were transferred to
Level 3 as a result of the valuation being significantly impacted by unobservable inputs. Furthermore, it
relates to debt obligations of which the valuation is being significantly impacted by unobservable inputs.
Following the implementation of IFRS 17 on 1 January 2023, a portfolio of loans with death waivers has
been reclassified from financial assets measured at amortised cost to financial assets mandatorily
measured at fair value through profit or loss as shown in reclassifications. For further information on the
change in accounting policies, reference is made to Note 1 'Basis of preparation and material accounting
policy information'.
In 2022, following the enhancement of the significance assessment, transfers into and out of Level 3 of
financial assets mandatorily at fair value mainly relate to a portfolio of securitization loans. Furthermore,
transfers out of Level 3 relate to two syndicated deals due to the unobservable parameters were
insignificant.
In 2022, transfers into level 3 financial assets designated at fair value relate to government bonds of which
the valuation being significantly impacted by unobservable inputs.

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 185

Changes in Level 3 Financial liabilities
| Trading liabilities | Non-trading derivatives | Financial liabilities designated as at fair value through profit or loss | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance as at 1 January | 229 | 160 | 449 | 35 | 54 | 135 | 732 | 330
Realised gain/loss recognised in the statement of profit or loss during the period 1 | 224 | 131 | -151 | 59 | -2 | -10 | 72 | 179
Additions | 53 | 124 | 72 | 16 | 18 | 13 | 142 | 153
Redemptions | -102 | -38 | -53 | 0 | -2 | -13 | -156 | -51
Maturity/settlement | -13 | -282 | -16 | -7 | -1 | -71 | -30 | -360
Transfers into Level 3 | 40 | 254 | 0 | 368 | 32 | 88 | 72 | 710
Transfers out of Level 3 | -49 | -117 | 0 | -21 | -54 | -88 | -102 | -226
Exchange rate differences | 0 | -3 | 0 | 0 | 0 | 0 | 0 | -3
Closing balance | 382 | 229 | 301 | 449 | 47 | 54 | 729 | 732

1 Net gains/losses were recorded as ‘Valuation results and net trading income’ in the statement of profit or loss. The total amount
includes EUR 72 million (2022: EUR 179 million) of unrealised gains and losses recognised in the statement of profit or loss.
In 2023, financial liabilities transfers into and out of Level 3 mainly consisted of structured notes, measured
as designated at fair value through profit or loss. The structured notes were transferred out of Level 3 as the
valuation was no longer impacted by significantly unobservable inputs.
In 2022, the transfers into Level 3 mainly consisted of non-trading derivatives that were transferred to Level
3 as a result of the valuation being significantly impacted by unobservable inputs.
g) Recognition of unrealised gains and losses in Level 3
Amounts recognised in the statement of profit or loss relating to unrealised gains and losses during the year
that relates to Level 3 assets and liabilities are included in the line item ‘Valuation results and net trading
income’ in the statement of profit or loss.
h) Level 3: Sensitivity analysis of unobservable inputs
Where the fair value of a financial instrument is determined using inputs which are unobservable and which
have a more than insignificant impact on the fair value of the instrument, the actual value of those inputs at
the balance date may be drawn from a range of reasonably possible alternatives. In line with market
practice the upper and lower bounds of the range of alternative input values reflect a level of valuation
certainty. The actual levels chosen for the unobservable inputs in preparing the financial statements are
consistent with the valuation methodology used for fair valued financial instruments.
In practice valuation uncertainty is measured and managed per exposure to individual valuation inputs (i.e.
risk factors) at portfolio level across different product categories. Where the disclosure looks at individual
Level 3 inputs, the actual valuation adjustments may also reflect the benefits of portfolio offsets.
This disclosure does not attempt to indicate or predict future fair value movement. The numbers in isolation
give limited information as in most cases these Level 3 assets and liabilities should be seen in combination
with other instruments (for example as a hedge) that are classified as Level 2.
The valuation uncertainty in the table below is broken down by related risk class rather than by product. The
possible impact of a change of unobservable inputs in the fair value of financial instruments where
unobservable inputs are significant to the valuation is as follows:

Sensitivity analysis of Level 3 instruments
| Positive fair value movements from using reasonable possible alternatives | Negative fair value movements from using reasonable possible alternatives
in EUR million | 2023 | 2022 | 2023 | 2022
Equity (equity derivatives, structured notes) | 18 | 12 | -9 | -6
Interest rates (Rates derivatives, FX derivatives) | 3 | 22 | 0 | -14
Credit (Debt securities, Loans, structured notes, credit derivatives) | 45 | 32 | -54 | -28
Loans and advances | 3 |  | -17 | -32
| 69 | 65 | -80 | -80

i) Financial instruments not measured at fair value
The following table presents the estimated fair values of the financial instruments not measured at fair
value in the statement of financial position.

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 186

Methods applied in determining fair values of financial assets and liabilities (carried at amortised cost)
| Carrying Amount | Carrying amount presented as fair value 1 | Level 1 | Level 2 | Level 3 | Total fair value
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |
Loans and advances to banks | 16,708 | 35,103 | 2,721 | 2,858 |  |  | 11,430 | 29,459 | 2,511 | 2,786 | 16,662 | 35,103
Loans and advances to customers | 642,453 | 635,557 | 15,686 | 19,101 |  |  | 14,602 | 15,264 | 593,098 | 575,805 | 623,386 | 610,170
Securities at amortised cost | 48,313 | 48,160 |  |  | 40,041 | 39,787 | 4,277 | 3,160 | 1,693 | 1,406 | 46,010 | 44,353
| 707,474 | 718,820 | 18,407 | 21,959 | 40,041 | 39,788 | 30,308 | 47,883 | 597,302 | 579,996 | 686,058 | 689,626
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deposits from banks | 23,257 | 56,632 | 3,764 | 3,696 |  |  | 15,066 | 48,524 | 3,968 | 3,954 | 22,799 | 56,174
Customer deposits | 702,217 | 686,341 | 556,766 | 590,321 |  |  | 103,955 | 80,305 | 41,250 | 15,511 | 701,971 | 686,136
Debt securities in issue | 84,423 | 58,075 |  |  | 25,898 | 20,308 | 38,301 | 20,501 | 20,225 | 17,577 | 84,424 | 58,385
Subordinated loans | 15,404 | 15,789 |  |  |  |  | 15,361 | 15,548 |  |  | 15,361 | 15,548
| 825,300 | 816,838 | 560,530 | 594,016 | 25,898 | 20,308 | 172,684 | 164,878 | 65,443 | 37,041 | 824,555 | 816,243

1 In accordance with IFRS and for the purpose of this disclosure, the carrying amount of financial instruments with an immediate on demand feature is presented as fair value
The aggregation of the fair values presented above does not represent, and should not be construed as
representing, the underlying value of ING Bank. These fair values were calculated for disclosure purposes
only. The carrying amount of financial instruments presented in the above table includes, when applicable,
the fair value hedge adjustment, this explains why (for these cases) the carrying amount approximates fair
value.
Loans and advances to banks
For short term receivables from banks carrying amounts represent a reasonable estimate of the fair value.
The fair value of long term receivables from banks is estimated by discounting expected future cash flows
using a discount rate based on specific available market data, such as interest rates and appropriate
spreads that reflects current credit risk or quoted bonds.
Loans and advances to customers
For short term loans carrying amounts represent a reasonable estimate of the fair value. The fair value of
long term loans is estimated by discounting expected future cash flows using a discount rate that reflects
current credit risk, current interest rates, and other current market conditions where applicable. The fair
value of mortgage loans is estimated by taking into account prepayment behaviour. Loans with similar
characteristics are aggregated for calculation purposes.
Securities at amortised cost
Where available, fair values for debt securities are generally based on quoted market prices. Quoted market
prices are obtained from an exchange market, dealer, broker, industry group, pricing service, or regulatory
service. The quoted prices from non-exchange sources are reviewed on their tradability of market prices. If
quoted prices in an active market are not available, fair value is based on an analysis of available market
inputs, which includes consensus prices obtained from one or more pricing services. Furthermore, fair values
are determined by valuation techniques discounting expected future cash flows using market interest rate
curves, referenced credit spreads, maturity of the investment, and estimated prepayment rates where
applicable.
Deposits from banks
For short term payables to banks carrying amounts represent a reasonable estimate of the fair value. The
fair value of long term payables to banks is estimated by discounting expected future cash flows using a
discount rate based on available market interest rates and appropriate spreads that reflects ING’s own
credit risk.
Customer deposits
In the current interest rate environment there is significant embedded value in our on-demand deposits,
therefore providing a natural hedge against the impact from rising rates on financial assets. However, for
the purpose of this disclosure and in accordance with IFRS, the carrying amounts of deposits with an
immediate on demand feature is presented as fair value.

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 187
The fair value of deposits with fixed contractual terms has been estimated based on discounting future cash
flows using the interest rates currently applicable to deposits of similar maturities.
Debt securities in issue
The fair value of debt securities in issue is generally based on quoted market prices, or if not available, on
estimated prices by discounting expected future cash flows using a current market interest rate and credit
spreads applicable to the yield, credit quality and maturity.
Subordinated loans
The fair value of publicly traded subordinated loans are based on quoted market prices when available.
Where no quoted market prices are available, fair value of the subordinated loans is estimated using
discounted cash flows based on interest rates and credit spreads that apply to similar instruments.
33 Derivatives and hedge accounting
Use of derivatives
ING uses derivatives for economic hedging purposes to manage its asset and liability portfolios and
structural risk positions. The primary objective of ING’s hedging activities is to manage the risks which arises
from structural imbalances in the duration and other profiles of its assets and liabilities. The objective of
economic hedging is to enter into positions with an opposite risk profile to an identified risk exposure to
reduce that exposure. The main risks which are being hedged are interest rate risk and foreign currency
exchange rate risk. These risks are primarily hedged with interest rate swaps, cross currency swaps and
foreign exchange forwards/swaps.
ING uses credit derivatives to manage its economic exposure to credit risk, including total return swaps and
credit default swaps, to sell or buy protection for credit risk exposures in the loan, investment, and trading
portfolios. Hedge accounting is not applied in relation to these credit derivatives.
Hedge accounting
Derivatives that qualify for hedge accounting under IFRS are classified and accounted for in accordance with
the nature of the instrument hedged and the type of IFRS hedge accounting model that is applicable. The
three models applicable under IFRS are: fair value hedge accounting, cash flow hedge accounting, and
hedge accounting of a net investment in a foreign operation. How and to what extent these models are
applied are described under the relevant headings below. The company’s detailed accounting policies for
these three hedge models are set out in paragraph 1.5 ‘Financial instruments’ of Note 1 ‘Basis of preparation
and material accounting policy information’.
IBOR transition
Reference is made to the note 'Risk management/ IBOR Transition' for information on how ING is managing
the transition to alternative benchmark rates and ING's progress in completing the transition with respect to
derivatives in hedge accounting relationships.
TLTRO
In 2022, ING hedged the interest rate risk of the TLTRO-III funding with derivatives and designated this in a
fair value hedge relationship. In Q4 2022 the ECB changed the terms of the TLTRO-III, resulting in the
discontinuation of the hedging relationship. The fair value hedge adjustment was amortized to profit or loss
over the revised interest period (i.e. until the date the change in TLTRO-III terms became effective). The
impact of this was recorded in net interest income. Refer to Note 20 'Net interest income' for more details.
Fair value hedge accounting
ING’s fair value hedges principally consist of interest rate swaps that are used to protect against changes in
the fair value of fixed-rate instruments due to movements in market interest rates. ING’s approach to
manage market risk, including interest rate risk, is discussed in ‘Risk management –Market risk’. ING’s
exposure to interest rate risk is disclosed in paragraph ‘Interest rate risk in banking book’.
ING Bank designates specific non-contractual risk components of hedged items. This is usually determined
by designating benchmark interest rates such as EURIBOR, SOFR, SONIA or TONAR, between others, because
the fair value of a fixed-rate instrument varies directly in response to changes in its benchmark interest rate.
By using derivative financial instruments to hedge exposures to changes in interest rates, ING also exposes
itself to credit risk of the derivative counterparty, which is not offset by the hedged item. ING minimises
counterparty credit risk in derivative instruments by clearing most of the derivatives through Central
Clearing Counterparties. In addition, ING only enters into transactions with high-quality counterparties and
requires posting collateral.
ING applies fair value hedge accounting on micro level in which one hedged item is hedged with one or
multiple hedging instruments as well as on macro level whereby a portfolio of items is hedged with multiple
hedging instruments. For these macro hedges of interest rate risk ING applies the EU carve-out. The EU
‘carve-out’ for macro hedging enables a group of derivatives (or proportions) to be viewed in combination
and jointly designated as the hedging instrument and removes some of the limitations in fair value hedge
accounting relating to hedging core deposits and under-hedging strategies. In retail operations, exposure on
retail funding (savings and current accounts) and retail lending (mortgages) is initially offset. The remaining
exposure is hedged in a portfolio hedge, using the EU carve-out, in which a portion of the retail lending
portfolio and core deposits are designated as a hedged item for hedge accounting purposes.

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> 32 Fair value of assets and liabilities
ING Bank Annual Report 2023 188
For portfolio hedges the fair value is projected based on contractual terms and other variables including
prepayment expectations. These projected fair value of the portfolios form the basis for identifying the
notional amount subject to interest rate risk that is designated under fair value hedge accounting.
Micro fair value hedge accounting is mainly applied on issued debt securities and purchased debt
instruments for hedging interest rate risk.
Before fair value hedge accounting is applied, ING determines whether an economic relationship between
the hedged item and the hedging instrument exists based on an evaluation of the quantitative
characteristics of these items and the hedged risk that is supported by quantitative analysis. ING considers
whether the critical terms of the hedged item and hedging instrument closely align when assessing the
presence of an economic relationship. ING evaluates whether the fair value of the hedged item and the
hedging instrument respond similarly to similar risks. In addition, ING is mainly using regression analysis to
assess whether the hedging instrument is expected to be and has been highly effective in offsetting
changes in the fair value of the hedged item.
For the macro hedge on the loan portfolio ING follows a dynamic hedging strategy. This means that on
monthly basis, based on the new portfolio projection, the hedging relationship is renewed. From an
operational point of view, the existing hedging relationship is adjusted based on the new portfolio projection
and additional hedging instruments are added to the hedging relationship.
ING uses the following derivative financial instruments in a fair value hedge accounting relationship:

Gross carrying value of derivatives designated under fair value hedge accounting
in EUR million | Assets 2023 | Liabilities 2023 | Assets 2022 | Liabilities 2022
As at 31 December |  |  |  |
Hedging instrument on interest rate risk |  |  |  |
– Interest rate swaps | 32,612 | 27,350 | 40,346 | 32,482
– Other interest derivatives | 284 | 34 | 395 | 39

The derivatives used for fair value hedge accounting are included in the statement of financial position line-
item ‘Financial assets at fair value through profit or loss – Non-trading derivatives’ for EUR 716 million (2022:
EUR 836 million) respectively ‘Financial liabilities at fair value through profit or loss – Non-trading derivatives’
EUR 113 million (2022: EUR 244 million). The difference between the gross carrying value as presented in the
table and the net carrying value as presented in the statement of financial position is due to offsetting with
other derivatives and collaterals paid or received.
For our main currencies the average fixed rate for interest rate swaps used in fair value hedge accounting
are 1.32% (2022: 0.54%) for EUR and 3.93% (2022: 3.86%) for USD.
The following table shows the net notional amount of derivatives designated in fair value hedging, split into
the maturity of the instruments. The net notional amounts presented in the table are a combination of
payer (-) and receiver (+) swaps.

Maturity derivatives designated in fair value hedging
in EUR million |  |  |  |  |  |  |  |  |
As at 31 December 2023 | Less than 1 month | 1 to 3 months | 3 to 12 months | 1 to 2 years | 2 to 3 years | 3 to 4 years | 4 to 5 years | >5 years | Total
Hedging instrument on interest rate risk |  |  |  |  |  |  |  |  |
– Interest rate swaps | -670 | 253 | 8,381 | 4,156 | 3,193 | -800 | 7,559 | -58,679 | -36,609
– Other interest derivatives |  | 25 | 190 | 116 | 302 | 250 | -144 | 974 | 1,712
As at 31 December 2022 |  |  |  |  |  |  |  |  |
Hedging instrument on interest rate risk |  |  |  |  |  |  |  |  |
- Interest rate swaps | -15 | -3,184 | -1,343 | -677 | 6,864 | 5,396 | 8,204 | -29,530 | -14,284
– Other interest derivatives | -10 | -55 | -190 | 180 | 61 | 349 | 147 | 933 | 1,416

Gains and losses on derivatives designated under fair value hedge accounting are recognised in the
statement of profit or loss. The effective portion of the fair value change on the hedged item is also
recognised in the statement of profit or loss in 'Valuation results and net trading income'. As a result, only
the net accounting ineffectiveness has an impact on the net result.

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 189

Hedged items included in a fair value hedging relationship
| Carrying amount of the hedged items | Accumulated amount of fair value hedge adjustment on the hedged item included in the carrying amount of the hedged item | Change in fair value of the hedged item measuring ineffectiveness for the period | Change in fair value hedging instruments for the period | Hedge ineffectiveness recognised in the statement of profit or loss gain (+) / loss (-)
in EUR million | Assets | Liabilities | Assets | Liabilities |  |  |
As at 31 December 2023 |  |  |  |  |  |  |
Interest rate risk |  |  |  |  |  |  |
– Debt securities at fair value through other comprehensive income | 31,224 |  | n/a |  | 1,224 |  |
– Loans at FVOCI | 5 |  | n/a |  | 1 |  |
– Loans and advances to customers | 78,787 |  | -7,104 |  | 4,705 |  |
– Debt instruments at amortised cost | 8,272 |  | -205 |  | 234 |  |
– Debt securities in issue |  | 32,432 |  | -1,511 | -1,279 |  |
– Subordinated loans |  | 14,646 |  | -834 | -473 |  |
– Amounts due to banks |  |  |  |  |  |  |
– Customer deposits and other funds on deposit |  | 39,377 |  | -1,889 | -1,451 |  |
– Discontinued hedges |  |  | 2,285 | 3 |  |  |
Total | 118,287 | 86,455 | -5,024 | -4,230 | 2,962 | -3,028 | -66
As at 31 December 2022 |  |  |  |  |  |  |
Interest rate risk |  |  |  |  |  |  |
– Debt securities at fair value through other comprehensive income | 19,816 |  | n/a |  | -2,798 |  |
– Loans at FVOCI | 35 |  | n/a |  | -4 |  |
– Loans and advances to customers | 58,673 |  | -12,112 |  | -11,466 |  |
– Debt instruments at amortised cost | 4,098 |  | -448 |  | -678 |  |
– Debt securities in issue |  | 26,040 |  | -2,815 | 3,746 |  |
– Subordinated loans |  | 15,767 |  | -1,344 | 1,470 |  |
– Amounts due to banks |  |  |  |  | 483 |  |
– Customer deposits and other funds on deposit |  | 36,843 |  | -3,373 | 4,099 |  |
– Discontinued hedges |  |  | 2,966 | 34 |  |  |
Total | 82,623 | 78,650 | -9,594 | -7,497 | -5,150 | 5,265 | 115

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 190
During 2023, the interest rate movements significantly affected the fair value changes of both the
derivatives and the hedged items designated in fair value hedges. However, no material hedging
relationship was discontinued as a result of the interest rate movements in 2023. Refer to note 22 ‘Valuation
results and net trading income'.
In addition, the increase in hedged items is due to higher volumes in loans and advances and debt securities
designated in hedge accounting. Discontinued hedges further mainly relate to the transfer of derivatives
from UK based clearing houses to EU based clearing houses related to Brexit in 2020.
The main sources of ineffectiveness are:
• differences in maturities of the hedged item(s) and hedging instrument(s);
• different interest rate curves applied to discount the hedged item(s) and hedging instrument(s);
• differences in timing of cash flows of the hedged item(s) and hedging instrument(s).
Additionally, for portfolio (macro) fair value hedges of ING’s fixed rate mortgage portfolio, ineffectiveness
also arises from the disparity between expected and actual prepayments (prepayment risk).
There were no other sources of significant ineffectiveness in these hedging relationships.
Cash flow hedge accounting
ING applies cash flow hedge accounting on micro and macro level. ING’s cash flow hedges mainly consist of
interest rate swaps and cross-currency swaps that are used to protect against the exposure to variability in
future cash flows on non-trading assets and liabilities that bear interest at variable rates or are expected to
be refunded or reinvested in the future. The amounts and timing of future cash flows, representing both
principal and interest flows, are projected for each portfolio of financial assets and liabilities, based on
contractual terms and other variables including estimates of prepayments. These projected cash flows form
the basis for identifying the notional amount subject to interest rate risk or foreign currency exchange rate
risk that is designated under cash flow hedge accounting.
ING’s approach to manage market risk, including interest rate risk and foreign currency exchange rate risk, is
discussed in ‘Risk management – Credit risk and Market risk’. ING determines the amount of the exposures
to which it applies hedge accounting by assessing the potential impact of changes in interest rates and
foreign currency exchange rates on the future cash flows from its floating-rate assets and liabilities. This
assessment is performed using analytical techniques.
As noted above for fair value hedges, by using derivative financial instruments to hedge exposures to
changes in interest rates and foreign currency exchange rates, ING exposes itself to credit risk of the
derivative counterparty, which is not offset by the hedged items. This exposure is managed similarly to that
for fair value hedges.
Gains and losses on the effective portions of derivatives designated under cash flow hedge accounting are
recognised in Other Comprehensive Income. Interest cash flows on these derivatives are recognised in the
statement of profit or loss in ‘Net interest income’ consistent with the manner in which the forecasted cash
flows affect net result. The gains and losses on ineffective portions of such derivatives are recognised
immediately in the statement of profit or loss in ‘Valuation results and net trading income’.
ING determines an economic relationship between the cash flows of the hedged item and the hedging
instrument based on an evaluation of the quantitative characteristics of these items and the hedged risk
that is supported by quantitative analysis. ING considers whether the critical terms of the hedged item and
hedging instrument closely align when assessing the presence of an economic relationship. ING evaluates
whether the cash flows of the hedged item and the hedging instrument respond similarly to the hedged
risk, such as the benchmark interest rate of foreign currency. In addition, a regression analysis is performed
to assess whether the hedging instrument is expected to be and has been highly effective in offsetting
changes in the fair value of the hedged item.
ING uses the following derivative financial instruments in a cash flow hedge accounting relationship:

Gross carrying value of derivatives used for cash flow hedge accounting
| Assets | Liabilities | Assets | Liabilities
in EUR million | 2023 | 2023 | 2022 | 2022
As at 31 December |  |  |  |
Hedging instrument on interest rate risk |  |  |  |
– Interest rate swaps | 11,839 | 14,051 | 10,038 | 14,836
Hedging instrument on FX rate risk |  |  |  |
– Cross currency swaps | 324 | 39 |  |
Hedging instrument on combined interest and FX rate risk |  |  |  |
– Cross currency interest rate swaps | 57 |  | 428 | 168

The derivatives used for cash flow hedge accounting are included in the statement of financial position line-
item ‘Financial assets at fair value through profit or loss – Non-trading derivatives’ EUR 440 million (2022:
EUR 814 million) respectively ‘Financial liabilities at fair value through profit or loss – Non-trading derivatives’
EUR 458 million (2022: EUR 1,275 million). The difference between the gross carrying value as presented in
the table and the net carrying value as presented in the statement of financial position is due to offsetting
with other derivatives and collaterals paid or received.
For the main currencies the average fixed rate for interest rate swaps used in cash flow hedge accounting
are 1.26% (2022: 0.51%) for EUR, 4.09% (2022: 3.27%) for PLN, 4.33% (2022: 1.96%) for USD and 2.80%

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 191
(2022: 1.28%) for AUD. The average currency exchange rates for cross currency swaps used in cash flow
hedge accounting is for EUR/USD 0.98 (2022: 0.99) and for EUR/AUD 1.58 (2022: 1.58).
The following table shows the net notional amount of derivatives designated in cash flow hedging split into
the maturity of the instruments. The net notional amounts presented in the table are a combination of
payer (+) and receiver (-) swaps.

Maturity derivatives designated in cash flow hedging
in EUR million |  |  |  |  |  |  |  |  |
As at 31 December 2023 | Less than 1 month | 1 to 3 months | 3 to 12 months | 1 to 2 years | 2 to 3 years | 3 to 4 years | 4 to 5 years | >5 years | Total
Hedging instrument on interest rate risk |  |  |  |  |  |  |  |  |
– Interest rate swaps | -214 | 184 | -8,557 | -18,551 | -6,636 | -7,246 | -4,896 | -3,384 | -49,300
Hedging instrument on FX rate risk |  |  |  |  |  |  |  |  |
– Cross currency swaps |  | 249 | 1,029 | -932 | 503 | -683 | 167 | -693 | -362
Hedging instrument on combined interest and FX rate risk |  |  |  |  |  |  |  |  |
– Cross currency interest rate swaps |  |  |  | -24 | -1,232 | -1,479 |  |  | -2,736
As at 31 December 2022 |  |  |  |  |  |  |  |  |
Hedging instrument on interest rate risk |  |  |  |  |  |  |  |  |
– Interest rate swaps | -562 | -935 | -6,730 | -12,464 | -8,926 | -8,115 | -3,620 | -8,947 | -50,300
Hedging instrument on combined interest and FX rate risk |  |  |  |  |  |  |  |  |
– Cross currency interest rate swaps |  | -834 | -1,535 | -721 | -2,140 | -52 | 7 | -48 | -5,323

The following table shows the cash flow hedge accounting impact on profit or loss and comprehensive
income:

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 192

Cash flow hedging – impact of hedging instruments on the statement of profit or loss and other comprehensive income
in EUR million | Change in value of hedged item used for calculating hedge ineffectiveness for the period | Carrying amount cash flow hedge reserve at the end of the reporting period 1 | Amount reclassified from CFH reserve to profit or loss 2 | Cash flow is no longer expected to occur | Change in value of hedging instrument recognised in OCI for the period | Hedge ineffectiveness recognised in the statement of profit or loss, gain (+) / loss (-)
As at 31 December 2023 |  |  |  |  |  |
Interest rate risk on: |  |  |  |  |  |
– Floating rate lending | -2,694 | -3,545 | 590 |  |  |
– Floating rate borrowing | 933 | 151 | -497 |  |  |
– Other |  |  |  |  |  |
– Discontinued hedges |  | 194 | -150 |  |  |
Total interest rate risk | -1,760 | -3,200 | -57 |  | 1,654 | 58
FX rate risk on: |  |  |  |  |  |
– Floating rate lending | 27 | -42 | -185 |  |  |
– Floating rate borrowing | -25 | 1 | -33 |  |  |
– Other |  |  |  |  |  |
– Discontinued hedges |  | 7 | -5 |  |  |
Total FX risk | 2 | -35 | -223 |  | 200 | -12
Combined interest and FX rate risk on: |  |  |  |  |  |
– Floating rate lending | -20 | 78 | -46 |  |  |
– Floating rate borrowing |  |  | 1 |  |  |
– Other |  |  |  |  |  |
– Discontinued hedges |  |  | -1 |  |  |
Total combined interest and FX risk | -20 | 78 | -46 |  | 68 | 2
Total cash flow hedge | -1,778 | -3,157 | -325 |  | 1,922 | 48
As at 31 December 2022 |  |  |  |  |  |
Interest rate risk on: |  |  |  |  |  |
– Floating rate lending | 4,817 | -5,460 | 395 |  |  |
– Floating rate borrowing | -775 | 923 | -181 |  |  |
– Other | -5 | -2 |  |  |  |
– Discontinued hedges |  | 330 | -263 |  |  |
Total interest rate risk | 4,037 | -4,210 | -50 |  | -4,279 | 21
Combined interest and FX rate risk on: |  |  |  |  |  |
– Floating rate lending | -47 | -16 | -269 |  |  |
– Floating rate borrowing | -7 | -4 | 14 |  |  |
– Other | 4 | -2 | -3 |  |  |
– Discontinued hedges |  | 4 | -5 |  |  |
Total combined interest and FX risk | -51 | -18 | -263 |  | 296 | -1
Total cash flow hedge | 3,986 | -4,227 | -313 |  | -3,982 | 20

1 The carrying amount is the gross amount, excluding tax adjustments.
2. The amounts are reclassified to Net interest income - interest income and/or expense on non-trading derivatives (hedge accounting).

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 193
The increase in the carrying amount of the cash flow hedge reserve is driven by the interest rate
movements. No material hedging relationship was discontinued as a result of the interest rate movements
in 2023.
The main sources of ineffectiveness for cash flow hedges are:
• differences in timing of cash flows of the hedged item(s) and hedging instrument(s);
• mismatches in reset frequency between hedged item and hedging instrument.
The following table shows the movement of the cash flow hedge reserve:

Movement cash flow hedge reserve
in EUR million | 2023 | 2022
Opening balance | -3,055 | -153
Value changes recognised in OCI | 1,922 | -3,982
Amounts recycled to profit or loss | -325 | -313
Income tax | -381 | 1,123
Exchange rate and other changes | -103 | 20
Adjustment for non controlling interest | -116 | 251
Movement for the year | 997 | -2,901
Ending balance | -2,058 | -3,055

Hedges of net investments in foreign operations
A foreign currency exposure arises from a net investment in subsidiaries that have a different functional
currency from the presentation currency of ING. The risk arises from the fluctuation in spot exchange rates
between the functional currency of the subsidiaries and ING’s presentation currency, which causes the
amount of the net investment to vary in the consolidated financial statements of ING. This risk may have a
significant impact on ING’s financial statements. ING’s policy is to hedge these exposures only when not
doing so it is expected to have a significant impact on the regulatory capital ratios of ING and its
subsidiaries.
ING’s net investment hedges principally consist of derivatives (including currency forwards and swaps) and
non-derivative financial instruments such as foreign currency denominated funding. When the hedging
instrument is foreign currency denominated debt, ING assesses effectiveness by comparing past changes in
the carrying amount of the debt that are attributable to a change in the spot rate with past changes in the
investment in the foreign operation due to movement in the spot rate (the offset method).
Gains and losses on the effective portions of derivatives designated under net investment hedge accounting
are recognised in Other Comprehensive Income. The balance in equity is recognised in the statement of
profit or loss when the related foreign subsidiary is disposed. The gains and losses on ineffective portions are
recognised immediately in the statement of profit or loss in 'Valuation results and net trading income'.
ING has the following derivative financial instruments used for net investment hedging:

Gross carrying value of derivatives used for net investment hedging
| Assets | Liabilities | Assets | Liabilities
in EUR million | 2023 | 2023 | 2022 | 2022
As at 31 December |  |  |  |
– FX forwards and Cross currency swaps | 100 | 92 | 119 | 83

The derivatives used for net investment hedge accounting are included in the statement of financial position
line-item ‘Financial assets at fair value through profit or loss – Non-trading derivatives’ EUR 100 million
(2022: EUR 119 million) respectively ‘Financial liabilities at fair value through profit or loss – Non trading
derivatives’ EUR 92 million (2022: EUR 83 million).
For ING’s main currencies the average exchange rates used in net investment hedge accounting for 2023
are EUR/USD 1.08 (2022: 1.06), EUR/PLN 4.54 (2022: 4.68), EUR/AUD 1.63 (2022: 1.52) and EUR/THB 37.65
(2022: 36.87).
The following table shows the notional amount of derivatives designated in net investment hedging split
into the maturity of the instruments:

Maturity derivatives designated in net investment hedging
in EUR million |  |  |  |  |  |  |  |  |
As at 31 December 2023 | Less than 1 month | 1 to 3 months | 3 to 12 months | 1 to 2 years | 2 to 3 years | 3 to 4 years | 4 to 5 years | >5 years | Total
– FX forwards and cross currency swaps | -6,009 | -4,576 | -87 |  |  |  |  |  | -10,672
As at 31 December 2022 |  |  |  |  |  |  |  |  |
– FX forwards and Cross currency swaps | -6,164 | -2,638 | -97 |  |  |  |  |  | -8,899

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 194
The effect of the net investment hedge accounting in the statement of profit or loss and other
comprehensive income is as follows:

Net investment hedge accounting – Impact on statement of profit or loss and other comprehensive income
in EUR million |  |  |  |  |
As at 31 December 2023 | Change in value of hedged item used for calculating hedge ineffectiveness for the period | Carrying amount net investment hedge reserve at the end of the reporting period 1 | Hedged item affected statement of profit or loss | Change in value of hedging instrument recognised in OCI | Hedge ineffectiveness recognised in the statement of profit or loss, gain(+) / Loss(-)
Investment in foreign operations | -183 | 123 |  | 183 | 0
Discontinued hedges |  | 263 |  |  |
As at 31 December 2022 |  |  |  |  |
Investment in foreign operations |  | -33 |  |  |
Discontinued hedges |  | 304 | -1 |  |

1 The carrying amount is the gross amount, excluding tax adjustments.
34 Assets by contractual maturity
Amounts presented in these tables by contractual maturity are the amounts as presented in the statement
of financial position and are discounted cash flows. Reference is made to ‘Risk Management – Funding and
liquidity risk’.

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> 33 Derivatives and hedge accounting
ING Bank Annual Report 2023 195

Assets by contractual maturity
in EUR million |  |  |  |  |  |  |
2023 | Less than 1 month 1 | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Maturity not applicable | Total
Cash and balances with central banks | 90,214 |  |  |  |  |  | 90,214
Loans and advances to banks | 11,985 | 1,021 | 1,744 | 1,527 | 431 |  | 16,708
Financial assets at fair value through profit or loss |  |  |  |  |  |  |
– Trading assets | 17,000 | 7,363 | 11,448 | 13,216 | 11,213 |  | 60,240
– Non-trading derivatives | 138 | 80 | 297 | 613 | 900 |  | 2,028
– Mandatorily at fair value through profit or loss | 32,835 | 12,040 | 5,303 | 3,587 | 1,040 | 179 | 54,983
– Designated as at fair value through profit or loss | 550 | 200 | 792 | 2,092 | 2,141 |  | 5,775
Financial assets at fair value through other comprehensive income |  |  |  |  |  |  |
– Equity securities |  |  |  |  |  | 1,885 | 1,885
– Debt securities | 579 | 232 | 2,021 | 13,686 | 21,763 |  | 38,281
– Loans and advances |  | 3 | 41 | 619 | 287 |  | 951
Securities at amortised cost | 2,220 | 1,142 | 6,667 | 22,540 | 15,744 |  | 48,313
Loans and advances to customers | 49,683 | 21,298 | 57,516 | 206,438 | 307,517 |  | 642,453
Other assets 2 | 5,649 | 257 | 1,088 | 1,147 | 1,020 | 4,645 | 13,805
Total assets | 210,852 | 43,636 | 86,917 | 265,466 | 362,056 | 6,709 | 975,636
2022 |  |  |  |  |  |  |
Cash and balances with central banks | 87,614 |  |  |  |  |  | 87,614
Loans and advances to banks | 28,733 | 1,633 | 2,331 | 2,190 | 216 |  | 35,103
Financial assets at fair value through profit or loss |  |  |  |  |  |  |
– Trading assets | 15,520 | 5,399 | 9,991 | 13,062 | 12,904 |  | 56,875
– Non-trading derivatives | 623 | 95 | 592 | 1,555 | 1,027 |  | 3,893
– Mandatorily at fair value through profit or loss | 29,153 | 10,504 | 3,753 | 2,329 | 901 | 203 | 46,844
– Designated as at fair value through profit or loss | 287 | 158 | 185 | 2,497 | 3,031 |  | 6,159
Financial assets at fair value through other comprehensive income |  |  |  |  |  |  |
– Equity securities |  |  |  |  |  | 1,887 | 1,887
– Debt securities | 167 | 420 | 2,458 | 12,587 | 13,463 |  | 29,095
– Loans and advances | 3 | 1 | 7 | 226 | 407 |  | 643
Securities at amortised cost | 1,810 | 1,719 | 4,566 | 24,689 | 15,376 |  | 48,160
Loans and advances to customers | 54,482 | 23,554 | 54,056 | 197,275 | 306,190 |  | 635,557
Other assets 2 | 7,151 | 272 | 1,154 | 1,436 | 1,418 | 4,600 | 16,031
Total assets | 225,545 | 43,754 | 79,093 | 257,846 | 354,933 | 6,690 | 967,861

1 Includes assets on demand.
2 Includes assets such as current and deferred tax assets as presented in the consolidated statement of the financial position. Additionally, assets are included in that position where maturities are not applicable such as property and equipment and investments in associates and
joint ventures. Due to their nature non-financial assets consist mainly of assets expected to be recovered after more than 12 months.

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> 34 Assets by contractual maturity
ING Bank Annual Report 2023 196
35 Liabilities and off-balance sheet commitments by maturity
The tables below include all liabilities and off-balance sheet commitments by maturity based on
contractual, undiscounted cash flows. These balances are included in the maturity analysis as follows:
• Perpetual liabilities are included in the column ‘Maturity not applicable’.
• Derivative liabilities are included on a net basis if cash flows are settled net. For other derivative liabilities
the contractual gross cash flow payable is included.
• Undiscounted future coupon interest on financial liabilities payable is included in a separate line and in
the relevant maturity bucket.
• Non-financial liabilities are included based on a breakdown of the amounts per statement of financial
position, per expected maturity.
• Loans and other credit-related commitments are classified on the basis of the earliest date they can be
drawn down.
ING Bank’s expected cash flows on some financial liabilities vary significantly from contractual cash flows.
Principal differences are in demand deposits from customers that are expected to remain stable or increase
and in unrecognised loan commitments that are not all expected to be drawn down immediately. Reference
is made to the liquidity risk paragraph in ‘Risk Management – Funding and liquidity risk’ for a description on
how liquidity risk is managed.

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> 35 Liabilities and off-balance sheet commitments by maturity
ING Bank Annual Report 2023 197

Liabilities and off-balance sheet commitments by maturity
in EUR million |  |  |  |  |  |  |  |
2023 | Less than 1 month 1 | 1–3 months | 3–12 months | 1–5 years | Over 5 years | Maturity not applicable | Adjustment 2 | Total
Deposits from banks | 9,294 | 7,800 | 2,074 | 1,898 | 2,002 |  | 189 | 23,257
Customer deposits | 584,874 | 22,092 | 46,002 | 32,513 | 17,308 |  | -572 | 702,217
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |
– Other trading liabilities | 10,981 | 697 | 545 | 1,003 | 897 |  | -36 | 14,087
– Trading derivatives | 2,292 | 2,243 | 5,148 | 10,204 | 7,110 |  | -3,865 | 23,132
– Non-trading derivatives | 505 | 96 | 139 | 1,002 | 355 |  | -78 | 2,019
– Designated at fair value through profit or loss | 29,857 | 12,754 | 5,442 | 3,832 | 3,544 | 25 | -56 | 55,399
Debt securities in issue | 3,442 | 10,233 | 33,986 | 22,206 | 15,820 |  | -1,264 | 84,423
Subordinated loans |  |  |  |  | 9,104 | 6,988 | -689 | 15,404
Lease liabilities | 17 | 45 | 175 | 627 | 359 |  | -61 | 1,162
Financial liabilities | 641,263 | 55,959 | 93,511 | 73,285 | 56,500 | 7,013 | -6,432 | 921,099
Other liabilities 3 | 9,696 | 619 | 2,269 | 399 | 420 |  |  | 13,402
Total liabilities | 650,959 | 56,579 | 95,779 | 73,684 | 56,919 | 7,013 | -6,432 | 934,501
Coupon interest due on financial liabilities | 1,057 | 1,703 | 6,103 | 10,178 | 4,998 | 404 |  | 24,442
Contingent liabilities in respect of |  |  |  |  |  |  |  |
– Discounted bills | 2 |  |  |  |  |  |  | 2
– Guarantees | 27,340 |  |  | 4 | 550 |  |  | 27,894
– Irrevocable letters of credit | 14,925 |  |  |  |  |  |  | 14,925
Irrevocable facilities | 166,361 | 12 | 63 | 314 | 60 |  |  | 166,810
| 208,628 | 12.374 | 62.518 | 318.133 | 610.351 | 0 | 0 | 209,631

1 Includes liabilities on demand.
2 This column reconciles the contractual undiscounted cash flows on financial liabilities to the statement of financial position values. The adjustments mainly relate to the impact of discounting and fair value hedge adjustments, and for derivatives, to the fact that the contractual
cash flows are presented on a gross basis (unless the cash flows are actually settled net).
3 Includes Other liabilities, Current and deferred tax liabilities, and Provisions as presented in the Consolidated statement of financial position.

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> 35 Liabilities and off-balance sheet commitments by maturity
ING Bank Annual Report 2023 198

Liabilities and off-balance sheet commitments by maturity
in EUR million |  |  |  |  |  |  |  |
2022 | Less than 1 month 1 | 1–3 month | 3–12 months | 1–5 years | Over 5 years | Maturity not applicable | Adjustment 2 | Total
Deposits from banks | 10,053 | 2,238 | 33,268 | 9,878 | 1,794 |  | -598 | 56,632
Customer deposits | 605,706 | 16,294 | 22,637 | 24,641 | 20,304 |  | -3,240 | 686,341
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |
– Other trading liabilities | 5,778 | 875 | 304 | 771 | 575 |  | -83 | 8,219
– Trading derivatives | 2,100 | 2,319 | 4,942 | 9,330 | 3,609 |  | 8,570 | 30,869
– Non-trading derivatives | 345 | 288 | 216 | 1,204 | 470 |  | 525 | 3,048
– Designated at fair value through profit or loss | 31,505 | 11,472 | 1,626 | 3,177 | 3,699 | 21 | -618 | 50,883
Debt securities in issue | 2,049 | 11,227 | 18,626 | 12,857 | 15,905 |  | -2,587 | 58,075
Subordinated loans |  |  | 760 |  | 9,936 | 6,307 | -1,214 | 15,789
Lease liabilities | 19 | 43 | 170 | 593 | 377 |  | -28 | 1,174
Financial liabilities | 657,554 | 44,755 | 82,548 | 62,450 | 56,668 | 6,328 | 727 | 911,030
Other liabilities 3 | 9,659 | 683 | 2,395 | 638 | 406 |  |  | 13,781
Total liabilities | 667,213 | 45,438 | 84,943 | 63,089 | 57,074 | 6,328 | 727 | 924,811
Coupon interest due on financial liabilities | 426 | 719 | 3,171 | 6,408 | 3,166 | 348 |  | 14,237
Contingent liabilities in respect of |  |  |  |  |  |  |  |
– Discounted bills |  |  |  |  |  |  |  |
– Guarantees | 28,304 |  |  | 4 | 550 |  |  | 28,859
– Irrevocable letters of credit | 15,660 | 19 | 3 |  |  |  |  | 15,682
– other |  |  |  |  | 3 |  |  | 3
Irrevocable facilities | 161,147 |  | 194 | 434 | 166 |  |  | 161,940
| 205,111 | 19 | 197 | 438 | 719 | 0 | 0 | 206,484

1 Includes liabilities on demand.
2 This column reconciles the contractual undiscounted cash flows on financial liabilities to the statement of financial position values. The adjustments mainly relate to the impact of discounting and fair value hedge adjustments, and for derivatives, to the fact that the contractual
cash flows are presented on a gross basis (unless the cash flows are actually settled net).
3 Includes Other liabilities, Current and deferred tax liabilities, and Provisions as presented in the Consolidated statement of financial position.

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> 35 Liabilities and off-balance sheet commitments by maturity
ING Bank Annual Report 2023 199
36 Transfer of financial assets, assets pledged and received as collateral
Financial assets pledged as collateral
The financial assets pledged as collateral consist primarily of Loans and advances to customers pledged to
secure Debt securities in issue, deposits from the Dutch Central Bank and other banks, as well as debt
securities used in securities lending or sale and repurchase transactions. They serve to secure margin
accounts and are used for other purposes required by law. Pledges are generally conducted under terms
that are usual and customary for collateralised transactions including standard sale and repurchase
agreements, securities lending and borrowing and derivatives margining. The financial assets pledged are as
follows:

Financial assets pledged as collateral |  |
in EUR million | 2023 | 2022
Banks |  |
– Cash and balances with central banks | 322 | 364
– Loans and advances to banks | 3,305 | 4,007
Financial assets at fair value through profit or loss | 23,641 | 17,079
Financial assets at fair value through OCI | 1,896 | 2,142
Securities at amortised cost | 2,672 | 3,578
Loans and advances to customers | 73,860 | 98,917
Other assets | 357 | 596
| 106,052 | 126,682

In 2023 the financial assets pledged as collateral reduced due to the partial repayment of ING's TLTRO III. In
addition, in some jurisdictions ING Bank N.V. has an obligation to maintain a reserve with central banks. As
at 31 December 2023, the minimum mandatory reserve deposits with various central banks amount to EUR
11,653 million (2022: EUR 11,108 million).
Financial assets received as collateral
The financial assets received as collateral that can be sold or repledged in absence of default by the owner
of the collateral consists of securities obtained through reverse repurchase transactions and securities
borrowing transactions.
These transactions are generally conducted under standard market terms for most repurchase transactions
and the recipient of the collateral has unrestricted right to sell or repledge it, provided that the collateral (or
equivalent collateral) is returned to the counterparty at term.

Financial assets received as collateral
in EUR million | 2023 | 2022
Total received collateral available for sale or repledge at fair value |  |
– equity securities | 33,234 | 22,847
– debt securities | 119,908 | 103,723
of which sold or repledged at fair value |  |
– equity securities | 20,526 | 18,613
– debt securities | 86,448 | 66,636

Transfer of financial assets
The majority of ING's financial assets that have been transferred, but do not qualify for derecognition are
debt and equity instruments used in securities lending or sale and repurchase transactions.

Transfer of financial assets not qualifying for derecognition
| Securities lending | Sale and repurchase
| Equity | Debt | Equity | Debt
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Transferred assets at carrying amount |  |  |  |  |  |  |  |
Financial assets at fair value through profit or loss | 3,894 | 2,087 |  |  | 7,357 | 6,357 | 11,780 | 7,178
Financial assets at fair value through other comprehensive income |  |  | 328 | 499 |  |  | 470 | 453
Loans and advances to customers |  |  |  |  |  |  | 2,396 | 4,637
Securities at amortised cost |  |  | 431 | 435 |  |  | 465 | 261
Associated liabilities at carrying amount 1 |  |  |  |  |  |  |  |
Financial liabilities at fair value through profit or loss | n/a | n/a | n/a | n/a | 11,010 | 6,245 | 9,467 | 8,932

1 The table includes the associated liabilities which are reported after offsetting, compared to the gross positions of the encumbered
assets.
The table above does not include assets transferred to consolidated securitisation entities as the related
assets remain recognised in the consolidated statement of financial position. Transferred financial assets
that are derecognised in their entirety are mentioned in Note 42 'Structured entities'.

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> 36 Transfer of financial assets, assets pledged and received as collateral
ING Bank Annual Report 2023 200
37 Offsetting financial assets and liabilities
The following tables include information about rights to offset and the related arrangements. The amounts
included consist of all recognised financial instruments that are presented net in the statement of financial
position under the IFRS netting criteria (legal right to offset and intention to settle net or to realise the asset
and settle the liability simultaneously) and amounts presented gross in the statement of financial position
but subject to enforceable master netting arrangements or similar arrangements.
At ING Bank amounts that are offset mainly relate to derivatives transactions, sale and repurchase
agreements, securities lending agreements and cash pooling arrangements. A significant portion of
offsetting is applied to OTC derivatives which are cleared through central clearing parties.
Related amounts not set off in the statement of financial position include transactions where:
• The counterparty has an offsetting exposure and a master netting or similar arrangement is in place with
a right to set off only in the event of default, insolvency or bankruptcy, or the offsetting criteria are
otherwise not satisfied, and
• In the case of derivatives and securities lending or sale and repurchase agreements, cash and non-cash
collateral has been received or pledged to cover net exposure in the event of a default or other
predetermined events. The effect of over-collateralisation is excluded.
The net amounts resulting after set off are not intended to represent ING’s actual exposure to counterparty
risk, as risk management employs a number of credit risk mitigation strategies in addition to netting and
collateral arrangements. Reference is made in the Risk Management Credit risk’ section ‘Credit risk
mitigation'.

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> 37 Offsetting financial assets and liabilities
ING Bank Annual Report 2023 201

Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
in EUR million 2023 |  | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilities offset in the statement of financial position | Net amounts of financial assets presented in the statement of financial position | Related amounts not offset in the statement of financial position | Net amount | Amounts not subject to enforceable netting arrangements | Statement of financial position total ¹
Financial instruments | Cash and financial instruments received as collateral
Statement of financial position line item | Financial instrument |  |  |  |  |  |  |  |
Loans and advances to banks 2 | Reverse repurchase, securities borrowing and similar agreements | 1,840 | -29 | 1,811 |  | 1,811 |  | 3,440 | 5,251
| Other |  |  |  |  |  |  |  |
|  | 1,840 | -29 | 1,811 |  | 1,811 |  | 3,440 | 5,251
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |
Trading and Non-trading | Reverse repurchase, securities borrowing and similar agreements | 76,304 | -34,738 | 41,566 | 235 | 41,063 | 268 | 22,091 | 63,657
| Derivatives 3 | 105,928 | -83,312 | 22,617 | 14,868 | 2,915 | 4,834 | 5,091 | 27,708
|  | 182,232 | -118,049 | 64,183 | 15,103 | 43,977 | 5,102 | 27,182 | 91,365
Loans and advances to customers 4 | Reverse repurchase, securities borrowing and similar agreements |  |  |  |  |  |  | 499 | 499
| Cash pools | 236,233 | -234,617 | 1,616 | 41 | 1,217 | 358 |  | 1,616
|  | 236,233 | -234,617 | 1,616 | 41 | 1,217 | 358 | 499 | 2,115
Other items where offsetting is applied in the statement of financial position 5 |  | 7,124 | -6,428 | 695 | 21 |  | 675 |  | 695
Total financial assets |  | 427,428 | -359,124 | 68,305 | 15,165 | 47,005 | 6,135 | 31,121 | 99,425

1 ‘The statement of financial position total’ is the sum of ‘Net amounts of financial assets presented in the statement of financial position’ and ’Amounts not subject to enforceable master netting arrangements’.
2 At 31 December 2023, the total amount of ‘Loans and advances to banks’ excluding repurchase agreements is EUR 11,457 million which is not subject to offsetting.
3 Derivative assets and derivative liabilities include certain exchange traded future and option positions with the same underlying.
4 At 31 December 2023, the total amount of ‘Loans and advances to customers’ excluding repurchase agreements is EUR 641,954 million of which the net cash pool position of EUR 1,616 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
5 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in ‘Other Assets – Amounts to be settled’ for EUR 3,869 million in the statement of financial position of which EUR 695 million
is subject to offsetting as at 31 December 2023.

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> 37 Offsetting financial assets and liabilities
ING Bank Annual Report 2023 202

Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
in EUR million 2022 |  | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilities offset in the statement of financial position | Net amounts of financial assets presented in the statement of financial position | Related amounts not offset in the statement of financial position | Net amount | Amounts not subject to enforceable netting arrangements | Statement of financial position total ¹
Financial instruments | Cash and financial instruments received as collateral
Statement of financial position line item | Financial instrument |  |  |  |  |  |  |  |
Loans and advances to banks 2 | Reverse repurchase, securities borrowing and similar agreements | 2,576 |  | 2,576 |  | 2,549 | 27 | 16,820 | 19,395
| Other | 1 |  | 1 | 1 |  |  | -1 |
|  | 2,576 |  | 2,576 | 1 | 2,549 | 27 | 16,819 | 19,395
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |
Trading and Non-trading | Reverse repurchase, securities borrowing and similar agreements | 51,870 | -21,245 | 30,625 | 102 | 29,813 | 710 | 22,260 | 52,886
| Derivatives | 134,253 | -106,523 | 27,730 | 18,190 | 4,525 | 5,015 | 7,004 | 34,734
|  | 186,123 | -127,768 | 58,355 | 18,292 | 34,337 | 5,726 | 29,264 | 87,619
Loans and advances to customers 3 | Reverse repurchase, securities borrowing and similar agreements | 155 |  | 155 |  | 155 |  | 1,151 | 1,306
| Cash pools | 224,261 | -222,857 | 1,404 | 74 | 889 | 441 |  | 1,404
|  | 224,416 | -222,857 | 1,559 | 74 | 1,044 | 441 | 1,151 | 2,710
Other items where offsetting is applied in the statement of financial position 4 |  | 6,750 | -5,899 | 851 | 74 |  | 777 |  | 851
Total financial assets |  | 419,865 | -356,524 | 63,341 | 18,440 | 37,930 | 6,971 | 47,234 | 110,576

1 ‘The statement of financial position total’ is the sum of ‘Net amounts of financial assets presented in the statement of financial position’ and ’Amounts not subject to enforceable master netting arrangements’.
2 At 31 December 2022, the total amount of ‘Loans and advances to banks’ excluding repurchase agreements is EUR 15,708 million which is not subject to offsetting.
3 At 31 December 2022, the total amount of ‘Loans and advances to customers’ excluding repurchase agreements is EUR 634,251 million of which the net cash pool position of EUR 1,404 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
4 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in ‘Other Assets – Amounts to be settled’ for EUR 5,190 million in the statement of financial position of which EUR 851 million
is subject to offsetting as at 31 December 2022.

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> 37 Offsetting financial assets and liabilities
ING Bank Annual Report 2023 203

Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
in EUR million 2023 |  |  |  |  | Related amounts not offset in the statement of financial position |  | Amounts not subject to enforceable netting arrangements | Statement of financial position total ¹
| Gross amounts of recognised financial liabilities | Gross amounts of recognised financial assets offset in the statement of financial position | Net amounts of financial liabilities presented in the statement of financial position | Financial instruments | Cash and financial instruments pledged as collateral | Net amount
Statement of financial position line item | Financial instrument |  |  |  |  |  |  |  |
Deposits from banks 2 | Repurchase, securities lending and similar agreements | 29 | -29 |  |  |  |  | 2,064 | 2,064
| Other | 290 | -290 |  |  |  |  |  |
|  | 319 | -319 |  |  |  |  | 2,064 | 2,064
Customer deposits 4 | Repurchase, securities lending and similar agreements |  |  |  |  |  |  |  |
| Cash pools | 249,734 | -234,617 | 15,116 | 13 |  | 15,103 |  | 15,116
|  | 249,734 | -234,617 | 15,116 | 13 |  | 15,103 |  | 15,116
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |  |
Trading and Non-trading | Repurchase, securities lending and similar agreements | 76,581 | -34,738 | 41,844 | 235 | 41,653 | -44 | 14,222 | 56,065
| Derivatives 3 | 101,218 | -82,677 | 18,541 | 14,881 | 3,455 | 204 | 6,607 | 25,148
|  | 177,799 | -117,415 | 60,384 | 15,117 | 45,108 | 160 | 20,829 | 81,213
Other items where offsetting is applied in the statement of financial position 5 |  | 7,285 | -6,773 | 512 | 35 |  | 477 |  | 512
Total financial liabilities |  | 435,137 | -359,124 | 76,013 | 15,165 | 45,108 | 15,740 | 22,892 | 98,905

1 ‘The statement of financial position total’ is the sum of ‘Net amounts of financial liabilities presented in the statement of financial position’ and ’Amounts not subject to enforceable master netting arrangements’.
2 At 31 December 2023, the total amount of ‘Deposits from banks’ excluding repurchase agreements is EUR 21,193 million of which EUR 0 million is subject to offsetting.
3 Derivative assets and derivative liabilities include certain exchange traded future and option positions with the same underlying.
4 At 31 December 2023, the total amount of ‘Customers deposits’ excluding repurchase agreements is EUR 702,120 million of which the net cash pool position of EUR 15,116 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
5 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in ‘Other Liabilities – Amounts to be settled’ for EUR 6,509 million in the statement of financial position of which EUR 512
million is subject to offsetting as at 31 December 2023.

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> 37 Offsetting financial assets and liabilities
ING Bank Annual Report 2023 204

Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements
in EUR million 2022 |  |  |  |  | Related amounts not offset in the statement of financial position |  | Amounts not subject to enforceable netting arrangements | Statement of financial position total ¹
| Gross amounts of recognised financial liabilities | Gross amounts of recognised financial assets offset in the statement of financial position | Net amounts of financial liabilities presented in the statement of financial position | Financial instruments | Cash and financial instruments pledged as collateral | Net amount
Statement of financial position line item | Financial instrument |  |  |  |  |  |  |  |
Deposits from banks 2 | Repurchase, securities lending and similar agreements |  |  |  |  |  |  | 3,809 | 3,809
| Other |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  | 3,809 | 3,809
Customer deposits 3 | Repurchase, securities lending and similar agreements |  |  |  |  |  |  |  |
| Cash pools | 236,219 | -222,857 | 13,362 | 52 |  | 13,310 |  | 13,362
|  | 236,219 | -222,857 | 13,362 | 52 |  | 13,310 |  | 13,362
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |  |
Trading and Non-trading | Repurchase, securities lending and similar agreements | 57,871 | -21,245 | 36,626 | 102 | 31,868 | 4,655 | 12,220 | 48,846
| Derivatives | 127,937 | -103,988 | 23,949 | 18,215 | 4,964 | 770 | 9,967 | 33,917
|  | 185,808 | -125,233 | 60,575 | 18,317 | 36,833 | 5,425 | 22,187 | 82,762
Other items where offsetting is applied in the statement of financial position 4 |  | 8,535 | -8,435 | 100 | 70 |  | 30 |  | 100
Total financial liabilities |  | 430,561 | -356,524 | 74,037 | 18,440 | 36,833 | 18,765 | 25,996 | 100,033

1 ‘The statement of financial position total’ is the sum of ‘Net amounts of financial liabilities presented in the statement of financial position’ and ’Amounts not subject to enforceable master netting arrangements’.
2 At 31 December 2022, the total amount of ‘Deposits from banks’ excluding repurchase agreements is EUR 52,823 million of which EUR 0 million is subject to offsetting.
3 At 31 December 2022, the total amount of ‘Customers deposits’ excluding repurchase agreements is EUR 686,341 million of which the net cash pool position of EUR 13,362 million is subject to offsetting. Cash pools mainly relate to our subsidiary Bank Mendes Gans.
4 Other items mainly include amounts to be settled with Central Clearing Counterparties regarding securities and derivatives transactions and is included in ‘Other Liabilities – Amounts to be settled’ for EUR 6,714 million in the statement of financial position of which EUR 100
million is subject to offsetting as at 31 December 2022.

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> 37 Offsetting financial assets and liabilities
ING Bank Annual Report 2023 205
38 Contingent liabilities and commitments
In the normal course of business, ING Bank is party to activities where risks are not reflected in whole or in
part in the consolidated financial statements. In response to the needs of its customers, the Group offers
financial products related to loans. These products include traditional off-balance sheet credit-related
financial instruments.

Contingent liabilities and commitments
in EUR million | 2023 | 2022
Contingent liabilities in respect of |  |
– Guarantees | 27,894 | 28,859
– Irrevocable letters of credit | 14,925 | 15,682
– Other |  | 3
| 42,821 | 44,544
Irrevocable facilities | 166,810 | 161,940
| 209,631 | 206,484

Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are
guarantees given by ING Bank in respect of credit granted to customers by a third party. Many of them are
expected to expire without being drawn on and therefore do not necessarily represent future cash outflows.
Irrevocable letters of credit mainly secure payments to third parties for a customer’s foreign and domestic
trade transactions in order to finance a shipment of goods. ING Bank’s credit risk in these transactions is
limited since these transactions are collateralized by the commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent
liabilities also include contingent liabilities resulting from the operations of the Real Estate business including
obligations under development and construction contracts.
Irrevocable facilities mainly constitute unused portions of irrevocable credit facilities granted to corporate
clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. ING Bank’s credit
risk and interest rate risk in these transactions is limited. The unused portion of irrevocable credit facilities is
partly secured by customers’ assets or counter-guarantees by the central governments and other public
sector entities under the regulatory requirements. Irrevocable facilities also include commitments made to
purchase securities to be issued by governments and private issuers.
In addition to the items included in contingent liabilities, ING Bank has issued certain guarantees as
participant in collective arrangements of national banking funds and as a participant in required collective
guarantee schemes which apply in different countries.
ING Bank N.V. provided a guarantee to the German Deposit Guarantee Fund (‘Einlagensicherungsfonds’ or
ESF) under section 5 (10) of the by-laws of this fund, where ING Bank N.V. indemnifies the Association of
German Banks Berlin against any losses it might incur as result of actions taken with respect to ING
Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR
100,000.
ING uses Irrevocable Payment Commitments (IPCs) for a part of its contributions to the Single Resolution
Fund (SRF). ING Bank has EUR 346 million of IPCs outstanding to the SRF as at 31 December 2023 (31
December 2022: EUR 283 million). Of these, EUR 63 million of IPCs were provided to the SRF during 2023
(2022: EUR 57 million). No IPCs were called by the SRF in 2023 (2022: nil). Cash collateral provided to the SRF
is equal to the outstanding amount of IPCs.
ING also uses IPCs for a part of its contributions to the Deposit Guarantee Scheme in Germany. Contingent
liabilities for such outstanding IPCs amount to EUR 273 million as at 31 December 2023 (31 December 2022:
EUR 237 million). Of these, EUR 36 million of IPCs were provided to the DGS during 2023 (2022: EUR 31
million). No IPCs were called by the DGS in 2023 (2022: nil). ING posted government bonds as collateral for
the total nominal amount of EUR 319 million as at 31 December 2023 (31 December 2022: EUR 259 million).
Furthermore we refer to Note 39 'Legal proceedings' for any contingent liabilities in respect of legal
proceedings.
39 Legal proceedings
ING Bank and its consolidated subsidiaries are involved in governmental, regulatory, arbitration and legal
proceedings and investigations in the Netherlands and in a number of foreign jurisdictions, including the
U.S., involving claims by and against them which arise in the ordinary course of their businesses, including in
connection with their activities as lenders, broker-dealers, underwriters, issuers of securities and investors
and their position as employers and taxpayers. In certain of such proceedings, very large or indeterminate
amounts are sought, including punitive and other damages. While it is not feasible to predict or determine
the ultimate outcome of all pending or threatened governmental, regulatory, arbitration and legal
proceedings and investigations, ING is of the opinion that some of the proceedings and investigations set
out below may have or have in the recent past had a significant effect on the financial position, profitability
or reputation of the ING and/or the ING and its consolidated subsidiaries.

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> 38 Contingent liabilities and commitments
ING Bank Annual Report 2023 206
Settlement agreement: On 4 September 2018, ING announced that it had entered into a settlement
agreement with the Dutch Public Prosecution Service relating to previously disclosed investigations
regarding various requirements for client on-boarding and the prevention of money laundering and corrupt
practices. Following the entry into the settlement agreement, ING has experienced heightened scrutiny
from authorities in various countries. ING is also aware, including as a result of media reports, that other
parties may, among other things, seek to commence legal proceedings against ING in connection with the
subject matter of the settlement. Certain parties filed requests with the Court of Appeal in The Netherlands
to reconsider the prosecutor’s decision to enter into the settlement agreement with ING and not to
prosecute ING or (former) ING employees. In December 2020, the Court of Appeal issued its final ruling. In
this ruling the prosecutors' decision to enter into the settlement agreement with ING was upheld, making
the settlement final. However, in a separate ruling, the Court ordered the prosecution of ING’s former CEO.
Litigation by investors: In February, 2024 ING and certain (former) board members were served with a writ
of summons for litigation in The Netherlands on behalf of investors who claim to have suffered financial
losses in connection with ING's disclosures on historic shortcomings in its financial economic crime policies,
related risk management and control systems, the investigation by and settlement with the Dutch
authorities in 2018 and related risks for ING. We do not agree with the allegations and will defend ourselves
against these and the claimed damages of around EUR 500 million. We follow IFRS rules for taking legal
provisions and would disclose material amounts in that regard if and when applicable - which currently is
not the case.
Findings regarding AML processes: As previously disclosed, after its September 2018 settlement with Dutch
authorities concerning anti-money laundering matters, and in the context of significantly increased
attention on the prevention of financial economic crime, ING has experienced heightened scrutiny by
authorities in various countries. The interactions with such regulatory and judicial authorities have included,
and can be expected to continue to include, onsite visits, information requests, investigations and other
enquiries. Such interactions, as well as ING’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.
In January 2022, a Luxembourg investigating judge informed ING Luxembourg that he intends to instruct
the relevant prosecutor to prepare a criminal indictment regarding alleged shortcomings in the AML process
at ING Luxembourg. Although this matter still remains at an early procedural stage and it is currently not
possible to determine how this matter will be resolved or the timing of any such resolution, ING does not
expect a financial outcome of this matter to have a material effect.
ING's subsidiary Payvision is the subject of a criminal investigation by Dutch authorities regarding money
laundering and various requirements of the Dutch act on Anti-Money Laundering and Counter Terrorist
Financing, focusing on the period from 1 January 2015 up to and including April 2020. Payvision is
cooperating with such ongoing investigation. In October 2021, the phasing out of Payvision was announced.
The phasing out of activities and the transfer of customers to a new service provider were completed in
2022. At the request of Payvision, its license has been withdrawn. It is currently not feasible to determine
how the ongoing investigation may be resolved or the timing of any such resolution, nor to estimate reliably
the possible timing, scope or amounts of any resulting fines, penalties and/or other outcome.
ING continues to take steps to enhance its management of compliance risks and embed stronger awareness
across the whole organisation. These steps are part of the global KYC programme and set of initiatives,
which includes enhancing KYC files and working on various structural improvements in compliance policies,
tooling, monitoring, governance, knowledge and behaviour.
Tax cases: Because of the geographic spread of its business, ING may be subject to tax audits, investigations
and procedures in numerous jurisdictions at any point in time. Although the Issuer believes that it has
adequately provided for all its tax positions, the ultimate resolution of these audits, investigations and
procedures is uncertain and may result in liabilities which are materially different from the amounts
recogn ise d.
Claims regarding accounts with predecessors of ING Bank Türkiye: ING Bank Türkiye has received
numerous claims from (former) customers of legal predecessors of ING Bank Türkiye. The claims are based
on offshore accounts held with these banks, which banks were seized by the Savings Deposit Insurance Fund
(“SDIF”) prior to the acquisition of ING Bank Türkiye in 2007 from OYAK. Pursuant to the acquisition contract,
ING can claim compensation from SDIF if a court orders ING to pay amounts to the offshore account holders.
SDIF has made payments to ING pursuant to such compensation requests, but filed various lawsuits to
receive those amounts back. These lawsuits are ongoing in favour of ING Bank Türkiye. In April 2022 the
Turkish Supreme Court decided that the prescription period for the offshore account holders’ compensation
claims starts on the transfer date of the account holders to the offshore accounts. The exact impact of this
decision on the ongoing cases is not clear yet. At this moment it is not possible to assess the outcome of
these procedures nor to provide an estimate of the (potential) financial effect of these claims.
Interest rate derivatives claims: In the past a uniform recovery framework for Dutch SME clients with
interest rate derivatives was established by a committee of independent experts appointed by the Dutch
Ministry of Finance. In the context of this recovery framework most claims have been settled, however ING is
still involved in several legal proceedings in the Netherlands with respect to interest rate derivatives that
were sold to clients in connection with floating interest rate loans in order to hedge the interest rate risk of
the loans. These proceedings are based on several legal grounds, depending on the facts and circumstances
of each specific case, inter alia alleged breach of duty of care, insufficient information provided to the clients
on the product and its risks and other elements related to the interest rate derivatives that were sold to

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> 39 Legal proceedings
ING Bank Annual Report 2023 207
clients. In some cases, the court has ruled in favour of the claimants and awarded damages, annulled the
interest rate derivative or ordered repayment of certain amounts to the claimants.
Interest surcharges claims: ING received complaints and was involved in litigation with certain individuals in
the Netherlands regarding increases in interest surcharges with respect to several credit products, including
but not limited to commercial property. ING has reviewed the relevant product portfolio. The provision
previously taken has been reversed for certain of these complaints. All claims are dealt with individually.
Thus far, the courts have ruled in favour of ING in each case, ruling that ING was allowed to increase the
interest surcharge based upon the essential obligations in the contract. In a relevant case the Dutch
Supreme Court ruled in favor of another Dutch bank, addressing the question whether or not a bank is
allowed to increase interest surcharges unilaterally. The Supreme Court ruled affirmatively and referred the
case to the Court of Appeal in The Hague. The Court of Appeal also ruled in favour of the Dutch bank in
October 2022 and this ruling has been confirmed by the Supreme Court in its ruling of 22 December 2023.
ING will continue to deal with all claims individually. In the last pending case against ING, the Court of Appeal
dismissed all claims in its ruling of 9 January 2024. The time limit for lodging a cassation appeal at the
Supreme Court expires on 9 April 2024.
Mortgage expenses claims: ING Spain has received claims and is involved in procedures with customers
regarding reimbursement of expenses associated with the formalisation of mortgages. In most first instance
court proceedings the expense clause of the relevant mortgage contract has been declared null and ING
Spain has been ordered to reimburse all or part of the applicable expenses. Since 2018, the Spanish Supreme
Court and the European Court of Justice have issued rulings setting out which party should bear notary,
registration, agency, and stamp duty costs. In January 2021, the Spanish Supreme Court ruled that
valuation costs of mortgages, signed prior to 16 June 2019, the date the new mortgage law entered into
force, should be borne by the bank. Media attention for the statute of limitations applicable to the right to
claim reimbursement of costs resulted in an increased number of claims at the beginning of 2021. In June
2021, the Supreme Court published a press release informing of its decision to ask the European Court of
Justice for a preliminary ruling regarding the criteria that should be applied to determine the date from
which the action for claiming the reimbursement of mortgage expenses is considered to be expired. Two
other preliminary rulings that were submitted by Catalunya courts also related to the limitation period. In
January 2024, the European Court of Justice ruled on one of the complaints filed by the Catalunya Provincial
Court. The European Court of Justice determined that the limitation period for the judicial claim for
reimbursement of expenses cannot begin to run from a Supreme Court decision declaring the clause null
and void, nor from the moment of the payment of the expenses. The European Court of Justice indicated
that it is up to national case-law to determine the criterion that should be applied for the calculation of the
limitation period, so uncertainty remains until the Supreme Court unifies the case-law. Currently, ING is
reviewing the strategy in order to address the latest developments.
ING Spain was also included, together with other Spanish banks, in three class actions filed by customer
associations. In one of the class actions an agreement was reached with the association. In another class
action ING filed an appeal asking the Spanish Court of Appeal to determine that the ruling of the court of
first instance is only applicable to the consumers that were part of the case. The National Court has revoked
the ruling and declared that the consumers will not be able to initiate an action for compensation based on
the first instance ruling, as the claimant association intended. This last decision is not yet final, as it has
been appealed in the Supreme Court. A provision has been established in the past and has been adjusted
where appropriate.
Imtech claims: In the Netherlands, the trustees in the bankruptcy of Imtech N.V. (“Imtech”) claimed in
September 2018 from various financing parties, including ING, payment of what the security agent has
collected following bankruptcy or intends to collect, repayment of all that was repaid to the financing
parties, as well as compensation for the repayment of a bridge financing, provided by ING and another
bank. This matter was settled by all Imtech financiers, including ING, and the Imtech trustees in October
2023.
In January 2018, ING Bank received a claim from Stichting ImtechClaim.nl and Imtech Shareholders Action
Group B.V. on behalf of certain (former) shareholders of Imtech. Furthermore, in March 2018, ING Bank
received another claim on the same subject matter from the Dutch Association of Stockholders (Vereniging
van Effectenbezitters, “VEB”). In June 2022, VEB reiterated and further substantiated its claim in a letter to
ING. Each of the claimants allege inter alia that shareholders were misled by the prospectus of the rights
issues of Imtech in July 2013 and October 2014. ING Bank, being one of the underwriters of the rights issues,
is held liable by the claimants for the damages that investors in Imtech would have suffered. ING Bank
responded to the claimants denying any and all responsibility in relation to the allegations made in the
relevant letters. ING (and the other underwriting banks) received a tolling letter (stuitingsbrief) from
Stichting Imtechclaim.nl, Imtech Shareholders Action Group B.V. and individual shareholders in December
2022, in connection with the allegations made in their original claim letter of January 2018. At this moment
it is not possible to assess the outcome of these claims nor to provide an estimate of the (potential) effect
of these claims.
Claims regarding mortgage loans in Swiss franc in Poland: ING Poland is a defendant in several lawsuits
with retail customers who took out mortgage loans indexed to the Swiss franc. Such customers have alleged
that the mortgage loan contract contains abusive clauses. One element that the court is expected to
consider in determining whether such contracts contain abusive clauses is whether the rules to determine
the exchange rate used for the conversion of the loan from Polish zloty to Swiss franc are unambiguous and
verifiable. In December 2020, the Polish Financial Supervision Authority (PFSA) proposed that lenders offer
borrowers voluntary out-of-court settlements on foreign-currency mortgage disputes, with mortgages
indexed to Swiss franc serving as a reference point. In February 2021, ING Poland announced its support for
this initiative and in October 2021 began offering the settlements to the borrowers following the PFSA’s
proposal. The Polish Supreme Court was expected to provide further clarity on this topic in a ruling
scheduled for November 2021, however the court’s session on this matter was postponed and the date of
the next session has not yet been announced. In October 2022, a hearing of the European Court of Justice
("CJEU") was held inter alia on the question whether, after cancellation of a contract regarding a Swiss franc

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> 39 Legal proceedings
ING Bank Annual Report 2023 208
loan by a court, banks may still charge interests for the amount borrowed under such loan prior to
cancellation.
On 15 June 2023, the CJEU issued a ruling. It ruled that under EU law when a loan agreement indexed to the
Swiss franc is declared null and void, banks cannot claim any remuneration (i.e. interest) for the duration the
principal amount was available to the customer. The customer, however, may assert claims against banks in
addition to reimbursement of interest and instalments previously paid to the bank. ING has recorded a
portfolio provision.
Certain Consumer Credit Products: In October 2021, ING announced that it would offer compensation to its
Dutch retail customers in connection with certain revolving consumer loans with variable interest rates that
allegedly did not sufficiently follow market rates. This announcement was made in response to several
rulings by the Dutch Institute for Financial Disputes (Kifid) regarding similar products at other banks. ING has
recognized a provision of EUR 180 million in 2021 for compensation and costs in connection with this
matter. On 22 December 2021, ING announced that it reached an agreement with the Dutch Consumers’
Association (Consumentenbond) on the compensation methodology for revolving credits. Based on a Kifid
ruling regarding similar products, ING has amended its previously announced compensation scheme by also
compensating interest on interest. In the third quarter of 2022, ING increased its provision for this matter by
EUR 75 million. In the fourth quarter of 2022, ING and the Dutch Consumers’ Association reached an
agreement on the compensation of customers who have had an overdraft facility or a revolving credit card
with a variable interest rate. ING has started compensating such customers in line with Kifid rulings about
revolving credits including ‘interest-on-interest’-effect in these cases. The compensation process is taking
more time than expected. Timelines for compensation vary depending on customer and product
segmentation and are dependent on the availability of data.
Climate litigation: In January 2024, Friends of the Earth Netherlands (Milieudefensie) announced that it
holds ING liable for alleged contribution to climate change and threatens to initiate legal proceedings
against ING. If necessary, we will defend our science-based climate approach in court.
40 Consolidated companies and businesses acquired and divested
Acquisitions and divestments
There were no significant acquisitions in 2023, 2022 or 2021, and there was no significant divestment in
2023.
Divestments 2022
ING announced at 13 December 2022 that it has sold their interest (80%) in Intersoftware Holding BV to the
Sky Group/ DIAS and realised a transaction result of EUR 11.0 million which consists of a profit of EUR 7.0 on
sale of InterSoftware Holding BV and the release of the redemption liability of EUR 3.0 million.
Divestments 2021
In 2021 ING decided to discontinue the Czech Retail Banking activities entailing the closure of retail
customer accounts /mutual funds and the sale of assets comprising the related government bond portfolio.
The discontinuation of the Czech retail Banking activities in 2021 resulted in EUR 2.5 billion saving accounts
being transferred to Raiffeisenbank and the government bond portfolio with a carrying amount of EUR 0.5
billion being sold.
At 12 July 2021, ING announced that it has reached an agreement to transfer ING’s Retail Banking
operations in Austria to Bank99. Under the terms of the agreement, approximately EUR 1.7 billion of savings
deposits and approximately EUR 1.0 billion of mortgages, approximately EUR 0.4 billion other personal
lending and approximately EUR 0.4 billion loans to banks of ING Austria have been transferred to Bank99. In
December 2021 the transaction was completed and a loss on disposal of EUR 26 million was realised. In
2022 some final closing activities resulted in an additional loss of EUR 1 million. ING Austria was included in
the segment Retail Challengers & Growth Markets.
In 2021, ING and the board of Makelaarsland agreed to continue Makelaarsland independently. The new
board will take over all clients and employees, and services to clients will continue unchanged. The negative
result on disposal of group companies from this management buyout amounted to approximately EUR 3
million.
On 28 October 2021 ING announced that its subsidiary Payvision will start phasing out its services as a
payment service provider and acquirer. In 2021, Payvision recognised an impairment loss of intangible
assets of EUR 44 million, mainly with respect to Brand, IT and Customer relationships and an impairment
loss of the deferred tax asset of EUR 14 million.
In December 2021 ING announced that it will leave the retail banking market in France in order to sharpen
the focus of its business portfolio. ING and Boursorama (a subsidiary of Société Générale) signed an
agreement to offer attractive services to retail customers of ING in France. The exit was finalized end of
2022. ING’s departure from the France retail banking market resulted in transferring EUR 9.7 billion saving
accounts to Boursorama. ING will continue its Wholesale Banking activities in France, with a focus on
strengthening its position and the ambition to be the go-to bank for sustainable finance.
41 Principal subsidiaries, investments in associates and joint ventures
For the majority of ING’s principal subsidiaries, ING Bank N.V. has control because it either directly or
indirectly owns more than half of the voting power. For subsidiaries in which the interest held is below 50%,
control exists based on the combination of ING’s financial interest and its rights from other contractual
arrangements which result in control over the operating and financial policies of the entity.

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> 39 Legal proceedings
ING Bank Annual Report 2023 209
For each of the subsidiaries listed, the voting rights held equal the proportion of ownership interest and
consolidation by ING is based on the majority of ownership.
For the principal investments in associates and joint ventures ING Bank has significant influence but not
control. Significant influence generally results from a shareholding of between 20% and 50% of the voting
rights, but also the ability to participate in the financial and operating policies through situations including,
but not limited to one or more of the following:
• Representation on the board of directors;
• Participation in the policymaking process; and
• Interchange of managerial personnel.
The principal subsidiaries, investments in associates and joint ventures of ING Bank N.V. and their statutory
place of incorporation or primary place of business are as follows:

Principal subsidiaries, investments in associates and joint ventures
|  |  | Proportion of ownership and interest held by the group
|  |  | 2023 | 2022
Subsidiary | Statutory place of Incorporation | Country of operation |  |
Bank Mendes Gans N.V. | Amsterdam | the Netherlands | 100% | 100%
ING Belgium S.A./N.V. | Brussels | Belgium | 100% | 100%
ING Luxembourg S.A. | Luxembourg City | Luxembourg | 100% | 100%
ING-DiBa AG | Frankfurt am Main | Germany | 100% | 100%
ING Bank Slaski S.A.1 | Katowice | Poland | 75% | 75%
ING Financial Holdings Corporation | Delaware | United States of America | 100% | 100%
ING Bank A.S. | Istanbul | Türkiye | 100% | 100%
ING Bank (Australia) Ltd | Sydney | Australia | 100% | 100%
ING Commercial Finance B.V. | Amsterdam | the Netherlands | 100% | 100%
ING Groenbank N.V. | Amsterdam | the Netherlands | 100% | 100%
Investments in associates and joint ventures |  |  |  |
TMBThanachart Bank Public Company Ltd 2 | Bangkok | Thailand | 23% | 23%

1 The shares of the non-controlling interest stake of 25% are listed on the Warsaw Stock Exchange, for summarised financial
information we refer to Note 28 'Information on geographical areas'
2 Reference is made to Note 8 'Investment in associates and joint ventures'.
42 Structured entities
ING Bank’s activities involve transactions with various structured entities (SE) in the normal course of its
business. A structured entity is an entity that has been designed so that voting or similar rights are not the
dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative
tasks only and the relevant activities are directed by means of contractual arrangements. ING Bank’s
involvement in these entities varies and includes both debt financing and equity financing of these entities
as well as other relationships. Based on its accounting policies ING establishes whether these involvements
result in no significant influence, significant influence, joint control or control over the structured entity.
The structured entities over which ING can exercise control are consolidated. ING may provide support to
these consolidated structured entities as and when appropriate. However, this is fully reflected in the
consolidated financial statements of ING Bank as all assets and liabilities of these entities are included and
off-balance sheet commitments are disclosed.
ING’s activities involving structured entities are explained below in the following categories:
1. Consolidated ING originated securitisation programmes;
2. Consolidated ING originated Covered bond programme (CBC);
3. Consolidated ING sponsored Securitisation programme (Mont Blanc);
4. Unconsolidated Securitisation programme; and
5. Other structured entities.
1. Consolidated ING originated securitisation programmes
ING Bank enters into liquidity management securitisation programmes in order to obtain funding and
improve liquidity. Within the programme ING Bank sells ING originated assets to a structured entity. The
underlying exposures include residential mortgages and SME loans in the Netherlands, Belgium, Spain, Italy,
Australia and Germany.
The structured entity issues securitised notes (traditional securitisations) which are eligible collateral for
central bank liquidity purposes. In most programmes ING Bank acts as investor of the securitised notes. ING
Bank continues to consolidate these structured entities if it is deemed to control the entities.
The structured entity issues securitisation notes in two or more tranches, of which the senior tranche
obtains a high rating (AAA or AA) by a rating agency. The retained tranche can subsequently be used by ING
Bank as collateral in the money market for secured borrowings.
ING Bank originated various securitisations, as at 31 December 2023, these consisted of approximately EUR
67 billion (2022: EUR 65 billion) of senior and subordinated notes, of which approximately EUR 2 billion

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> 41 Principal subsidiaries, investments in associates and joint ventures
ING Bank Annual Report 2023 210
(2022: EUR 1 billion) were issued externally. The underlying exposures are residential mortgages and SME
loans. Apart from the third party funding, these securitisations did not impact ING Bank’s Consolidated
statement of financial position and profit or loss.
In 2023, there are no non-controlling interests as part of the securitisation structured entities that are
significant to ING Bank. ING Bank for the majority of the securitisation vehicles provides the funding for the
entity except for EUR 2 billion (2022: EUR 1 billion).
In addition Bank originated various securitisations for liquidity management optimisation purposes which
consist of senior secured portfolio loans issued to ING subsidiaries in Germany. The underlying exposures
were senior loans to large corporations and financial institutions, and real estate finance loans, mainly in
the Netherlands. As at 31 December 2023, all securitized loans are redeemed (2022: EUR 444 million).
2. Consolidated ING originated Covered bond programme (CBC)
ING Bank has entered into a covered bond programme. Under the covered bond programme ING issues
bonds. The payment of interest and principal is guaranteed by the ING administered structured entities, ING
Covered Bond Company B.V., and ING SB Covered Bond Company B.V. In order for these entities to fulfil their
guarantee, ING legally transfers mainly Dutch mortgage loans originated by ING. Furthermore ING offers
protection against deterioration of the mortgage loans. The entities are consolidated by ING Bank.

Covered bond programme
| Fair value pledged mortgage loans
in EUR million | 2023 | 2022
Dutch Covered Bond Companies | 27,148 | 21,379
| 27,148 | 21,379

In addition, subsidiaries of ING in Germany, Belgium, Poland and Australia also issued covered bonds with
pledged mortgages loans of approximately EUR 29,950 million (2022: EUR 24,880 million) in total.
For the covered bond programme, third-party investors in securities issued by the structured entity have
recourse to the assets of the entity and to the assets of ING Bank.
3. Consolidated ING sponsored Securitisation programme (Mont Blanc)
In the normal course of business, ING Bank structures financing transactions for its clients by assisting them
in obtaining sources of liquidity by selling the clients’ receivables or other financial assets to a Special
Purpose Vehicle (SPV). The senior positions in these transactions may be funded by the ING administered
multi seller Asset Backed Commercial Paper (ABCP) conduit Mont Blanc Capital Corp. (rated A-1/P-1). Mont
Blanc Capital Corp. funds itself externally in the ABCP markets.
In its role as administrative agent, ING Bank facilitates these transactions by acting as administrative agent,
swap counterparty and liquidity provider to Mont Blanc Capital Corp. ING Bank also provides support facilities
(i.e. liquidity) backing the transactions funded by the conduit. The types of asset currently in the Mont Blanc
conduit include trade receivables, consumer finance receivables, car leases and residential mortgages.
ING Bank supports the commercial paper programmes by providing Mont Blanc Capital Corp. with short-
term liquidity facilities. Once drawn these facilities bear normal credit risk.
The liquidity facilities, provided to Mont Blanc are EUR 2,268 million (2022: EUR 2,446 million). The drawn
liquidity amount is nil as at 31 December 2023 (2022: nil).
The standby liquidity facilities are reported under irrevocable facilities. All facilities, which vary in risk profile,
are granted to the Mont Blanc Capital Corp. subject to normal ING Bank credit and liquidity risk analysis
procedures. The fees received for services provided and for facilities are charged subject to market
conditions.
4. Unconsolidated Securitisation programme
In 2013 ING transferred financial assets (mortgage loans) for an amount of approximately EUR 2 billion to a
special purpose vehicle (SPV). The transaction resulted in full derecognition of the financial assets from ING’s
statement of financial position. Following this transfer ING continues to have two types of on-going
involvement in the transferred assets: as counterparty to the SPE of a non-standard interest rate swap,
which is recognized as a non-trading derivative and as servicer of the transferred assets. ING has an option
to unwind the transaction by redeeming all notes at their principal outstanding amount, in the unlikely
event of changes in accounting and/or regulatory requirements that significantly impact the transaction.
The fair value of the swap held by ING at 31 December 2023 amounted to EUR -26 million (2022: EUR
-40 million); fair value changes on this swap recognised in the statement of profit or loss in 2023 were EUR
14 million (2022: EUR -6 million). Service fee income recognised, for the role as administrative agent, in the
statement of profit or loss in 2023 amounted to EUR 1 million (2022: EUR 1 million). The cumulative income
recognised in profit or loss since derecognition amounts to EUR 19 million (2022: EUR 18 million).
5. Other structured entities
In the normal course of business, ING Bank enters into transactions with structured entities as counterparty.
Predominantly in its structured finance operations, ING can be instrumental in facilitating the creation of
these structured entity counterparties. These entities are generally not included in the consolidated
financial statements of ING Bank, as ING facilitates these transactions as administrative agent by providing
structuring, accounting, funding, lending, and operation services.

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> 42 Structured entities
ING Bank Annual Report 2023 211
ING Bank offers various investment fund products to its clients. ING Bank does not invest in these investment
funds for its own account nor acts as the fund manager.
43 Related parties
In the normal course of business, ING Bank 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 Bank include, among others, its
subsidiaries, associates, joint ventures, key management personnel, and various defined benefit and
contribution plans. For post-employment benefit plans, reference is made to Note 30 'Pensions and other
post-employment benefits'. Transactions between related parties include rendering or receiving of services,
leases, transfers under finance arrangements and provisions of guarantees or collateral. All transactions
with related parties took place at conditions customary in the market. There are no significant provisions for
doubtful debts or individually significant bad debt expenses recognised on outstanding balances with
related parties. ING Bank forms part of ING Group and also enters into transactions with ING Group. These
transactions vary from financing activities to regular purchase and sales transactions. Disclosed in the table
below, are the transactions with ING Groep N.V.
Parent Company

Transactions with ING Groep N.V. |  |
in EUR million | 2023 | 2022
Assets | 56 | 56
Liabilities | 70,524 | 65,704
Income received | 1 | 4
Expenses paid | 2,026 | 1,426

Liabilities to ING Groep N.V. mainly comprise long-term funding.
Associates and joint ventures

Transactions with ING Bank’s main associates and joint ventures
| Associates | Joint ventures
in EUR million | 2023 | 2022 | 2023 | 2022
Assets | 121 | 121 |  |
Liabilities | 424 | 309 | 1 | 1
Off-balance sheet commitments | 20 | 28 |  |
Income received | 10 | 12 |  |
Expenses paid | 3 |  |  |

Assets, liabilities, commitments, and income related to Associates and joint ventures result from
transactions which are executed as part of the normal Banking business. Dividends received by associates
and joint ventures are included in Note 8 'Investment in associates and joint ventures'.
Key management personnel compensation
The Executive Board of ING Groep N.V., the Management Board Banking and the Supervisory Board are
considered Key Management personnel of ING. In 2023 and 2022, the three members of the Executive Board
of ING Groep N.V. were also members of the Management Board Banking.
Transactions with key management personnel, including their compensation are included in the tables
below.

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> 42 Structured entities
ING Bank Annual Report 2023 212

Key management personnel compensation (Executive Board and Management Board Banking)
2023 in EUR thousands | Executive Board of ING Groep N.V. | Management Board Banking 1 | Total
Fixed Compensation |  |  |
– Base salary | 4,220 | 4,200 | 8,420
– Collective fixed allowances 2 | 1,002 | 887 | 1,889
– Pension costs | 78 | 107 | 185
– Severance benefits |  | 734 | 734
Variable compensation |  |  |
– Upfront cash |  | 598 | 598
– Upfront shares | 293 | 598 | 891
– Deferred cash |  | 897 | 897
– Deferred shares | 439 | 897 | 1,336
– Other emoluments 3 | 344 | 487 | 832
Total compensation | 6,376 | 9,405 | 15,782

1 E xcluding members of the Management Board Banking that are also members of the Executive Board of ING Groep N.V.
2 The collective fixed allowances consist of two savings allowances applicable to employees in the Netherlands; an individual savings
allowance of 3.5% and a collective savings allowance to compensate for loss of pension benefits with respect to salary in excess of
EUR 128,810.
3 T his includes expatriate allowances (such as housing, school/tuition fees and international health insurances, if applicable); banking
and insurance benefits from ING (on the same terms as for other employees of ING in the Netherlands); tax and financial planning
services to ensure compliance with the relevant legislative requirements; reimbursement of costs under the Directors & Officers
indemnity provided by ING; the use of a company car or driver service.

Key management personnel compensation (Executive Board and Management Board Banking)
2022 in EUR thousands | Executive Board of ING Groep N.V. | Management Board Banking 1 | Total
Fixed Compensation |  |  |
– Base salary | 4,220 | 4,969 | 9,189
– Collective fixed allowances 2 | 1,011 | 1,073 | 2,084
– Pension costs | 70 | 116 | 186
– Severance benefits |  | 932 | 932
Variable compensation |  |  |
– Upfront cash |  | 803 | 803
– Upfront shares | 268 | 803 | 1,071
– Deferred cash |  | 1,204 | 1,204
– Deferred shares | 401 | 1,204 | 1,605
– Other emoluments 3 | 296 | 638 | 934
Total compensation | 6,266 | 11,742 | 18,008

1 Excluding members of the Management Board Banking that are also members of the Executive Board of ING Groep N.V.
2 The collective fixed allowances consist of two savings allowances applicable to employees in the Netherlands; an individual savings
allowance of 3.5% and a collective savings allowance to compensate for loss of pension benefits with respect to salary in excess of
EUR 114,866.
3 This includes amongst others: housing, school/tuition fees, international health insurance, relocation costs and tax and financial
planning.
ING indemnifies the members of the EB against direct financial losses in connection with claims from third
parties filed, or threatened to be filed, against them by virtue of their service as a member of the EB, as far
as permitted by law, on the conditions laid down in the Articles of Association and their commission
contract. ING has taken out liability insurance for the members of the EB.
In accordance with the Articles of Association ING indemnifies the members of the Supervisory Board as far
as legally permitted against direct financial losses in connection with claims from third parties filed or
threatened to be filed against them by virtue of their service as a member of the Supervisory Board.
Key management personnel compensation is generally included in Staff expenses in the statement of profit
or loss. The total remuneration of the Executive Board and Management Board Banking is disclosed in the
table above. Under IFRS, certain components of variable remuneration are not recognised in the statement
of profit or loss directly, but are allocated over the vesting period of the award. The comparable amount
recognised in Staff expenses in 2023 relating to the fixed expenses of 2023 and the vesting of variable
remuneration of earlier performance years, i s EUR 14 million in 20 23 (2022: EUR 14 million).

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> 43 Related parties
ING Bank Annual Report 2023 213
The table below shows the total of fixed remuneration, expense allowances and attendance fees for the
Supervisory Board in 2023 and 2022

Key management personnel compensation (Supervisory Board)
in EUR thousands | 2023 | 2022
Total compensation | 1,152 | 1,048

Loans and advance to key management personnel
As at 31 December 2023 Loans and advances outstanding to key management personnel amounted to EUR
1.7 million (2022: EUR 2.7 million) and loan commitments to key management personnel amounted to EUR
138 thousand (2022: EUR 203 thousand). Total interest received in 2023 on these loans and advances
amounted to EUR 30 thousand (2022: EUR 62 thousand).
These loans and advances and loan commitments (1) were made in the ordinary course of business, (2)
were granted on conditions that are comparable to those of loans and advances granted to all employees
and (3) did not involve more than the normal risk of collectability or present other unfavourable features.
Loans and advances to members of the Executive Board and Management Board Banking are compliant
with the standards set out in the DNB guidelines for loans to officers and directors of a regulated entity,
such as ING.
Deposits outstanding to key management personnel
As at 31 December 2023 Deposits outstanding from key management personnel amounted to EUR 13.9
million (2022: EUR 11.5 million). Total interest paid in 2023 on these deposits amounted to EUR
197 thousand (2022: EUR 36 thousand).
ING shares held by key management personnel

Number of ING Groep N.V. shares to key management personnel
| ING Groep N.V. shares
in numbers | 2023 | 2022
Executive Board members | 128,241 | 108,217
Management Board Banking | 262,507 | 294,574
Supervisory Board members | 5,295 | 5,295
Total number of shares | 396,043 | 408,086

44 Capital management
Objectives
Group Treasury (“GT”) Balance Sheet & Capital Management, is responsible for maintaining the adequate
capitalisation of ING Group and ING Bank entities, to manage the risk associated with ING’s business
activities. This involves not only managing, planning and allocating capital within ING Group, ING Bank and
its various entities, but also helping to execute necessary capital market transactions, term (capital) funding
and risk management transactions. ING takes an integrated approach to assess the adequacy of its capital
position in relation to its risk profile and operating environment. This means GT Balance Sheet & Capital
Management takes into account both regulatory and internal, economic based metrics and requirements as
well as the interests of key stakeholders such as shareholders and rating agencies.
ING Bank applies the following main capital definitions:
• Common Equity Tier 1 capital (CET1) - is defined as shareholders’ equity less regulatory adjustments.
CET1 capital divided by risk-weighted assets equals the CET1 ratio.
• Tier 1 capital – is defined as CET1 capital plus Additional Tier 1 (hybrid) securities and other regulatory
adjustments. Tier 1 capital divided by risk-weighted assets equals the Tier 1 capital ratio.
• Total capital – is Tier 1 capital plus subordinated Tier 2 liabilities and regulatory adjustments. Total capital
divided by risk-weighted assets equals the Total capital ratio.
• Leverage ratio – is defined as Tier 1 capital divided by the leverage exposure.
Capital developments
ING Bank’s capital ratios at the end of the year decreased compared to 2022 primarily due to lower
available CET1 capital as a result of the EUR 4.0 billion additional distributions that were upstreamed to ING
Group. Risk-weighted assets were mainly impacted by volume reduction in Russia-related exposure,
currency movements, improvement in book quality and model impacts.

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> 43 Related parties
ING Bank Annual Report 2023 214
ING Bank paid EUR 6.3 billion of dividend to ING Group in relation to the 2023 profit and an additional EUR 4.0
billion for distribution to shareholders by the Group.
ING Bank N.V. has a CET1 ratio of 11.95% versus an overall CET1 requirement (including buffer requirements)
of 7.50%. The Bank’s Tier 1 ratio decreased from 14.5% to 14.1% compared to last year. The Banks’s Total
capital ratio decreased to 17.0%.

ING Bank capital position according to CRR II / CRD V
in EUR million | 2023 | 2022
Shareholders’ equity 1 | 40,191 | 42,546
- Interim profits not included in CET 1 capital | -766 | -913
- Other adjustments | -1,029 | 332
Regulatory adjustments | -1,795 | -580
Available common equity Tier 1 capital | 38,396 | 41,966
Additional Tier 1 securities | 6,962 | 6,280
Regulatory adjustments additional Tier 1 | 86 | 78
Available Tier 1 capital | 45,444 | 48,324
Supplementary capital Tier 2 bonds 2 | 9,115 | 10,046
Regulatory adjustments Tier 2 | 54 | 41
Available Total capital | 54,613 | 58,411
Risk weighted assets | 321,358 | 332,853
Common equity Tier 1 ratio | 11.95% | 12.61%
Tier 1 ratio | 14.14% | 14.52%
Total capital ratio | 16.99% | 17.55%

1 Shareholders' equity is determined in accordance with IFRS-EU.
2 All T2 securities are CRR/CRD V-compliant for 2023.
In accordance with the applicable regulation, credit and operational risk models used in the capital ratios
calculations are not audited.
Processes for managing capital
GT Balance Sheet & Capital Management ensures adherence to ING’s solvency risk appetite statements by
planning and executing capital management transactions. The ongoing assessment and monitoring of
capital adequacy is embedded in the capital planning process as part of the ICAAP framework. As part of the
dynamic business planning process, ING prepares a capital and funding plan on a regular basis for all its
material businesses and assesses continuously the timing, need and feasibility for capital management
actions in scope of its execution strategy. Sufficient financial flexibility should be preserved to meet
important financial objectives. Risk appetite statements are at the foundation of the capital plan and are
cascaded to the different businesses in line with ING’s risk management framework. Contingency capital
measures and early warning indicators are in place in conjunction with ING’s contingency and recovery plan
to support the strategy in times of stress.
Adverse planning and stress testing, which reflect the outcome of the annual risk assessment, are integral
components of ING’s risk and capital management framework. It allows to (i) identify and assess potential
vulnerabilities in ING’s businesses, business model, portfolios or operating environment; (ii) understand the
sensitivities of the core assumptions used in ING’s strategic and capital plan; and (iii) improve decision-
making and business steering through balancing risk and return following a forward looking and prudent
management approach.
Regulatory requirements
Capital adequacy and the use of required regulatory capital are based on the guidelines developed by the
Basel Committee on Banking Supervision (The Basel Committee) and the European Union Directives, as
implemented by the Dutch Central Bank and the ECB for supervisory purposes. In 2010, the Basel Committee
issued new solvency and liquidity requirements that superseded Basel II, implemented in the EU via CRR /
CRD. In accordance with the CRR the minimum Pillar 1 capital requirements applicable to ING Bank are: a
CET1 ratio of 4.5%, a Tier 1 ratio of 6.0% and a Total capital ratio of 8.0% of risk-weighted assets.
The overall CET1 requirement (including buffer requirements) for ING Bank N.V. at a consolidated level was
7.50% in 2023. This requirement is the sum of a 4.5% Pillar I requirement, a 2.5% Capital Conservation Buffer
(CCB) and a 0.50% Countercyclical Buffer (CCyB) (based on December 2023 positions).
Ratings
ING’s credit ratings and outlook are shown in the table below. Each of these ratings reflects only the view of
the applicable rating agency at the time the rating was issued, and any explanation of the significance of a
rating may be obtained only from the rating agency.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 44 Capital management
ING Bank Annual Report 2023 215

Main credit ratings of ING Bank N.V. at 31 December 2023
| S&P | Moody’s | Fitch | GBB-Rating
ING Bank N.V. |  |  |  |
Issuer rating |  |  |  |
Long-term | A+ | A1 | AA- | A+
Short-term | A-1 | P-1 | F1+ | n/a
Outlook | Stable | Stable | Stable | Indeterminate
Senior unsecured rating | A+ | A1 | AA- |

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.
45 Subsequent events
There are no subsequent events to report other than those already disclosed in Note 39 'Legal proceedings'.

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> 44 Capital management
ING Bank Annual Report 2023 216
Authorisation of Consolidated Financial Statements
Amsterdam, 4 March 2024
The Supervisory Board
K.K. (Karl) Guha, chairperson
A.M.G. (Mike) Rees, vice-chairperson
J. (Juan) Colombás
M. (Margarete) Haase
L.J. (Lodewijk) Hijmans van den Bergh
H.A.H. (Herman) Hulst
H.H.J.G. (Harold) Naus
A. (Alexandra) Reich
H.W.P.M.A. (Herna) Verhagen
The Management Board Banking
S.J.A. (Steven) van Rijswijk, CEO and chairperson
T. (Tanate) Phutrakul, CFO
L. (Ljiljana) Čortan, CRO
P. (Pinar) Abay, head of Retail, Market Leaders and Challengers & Growth Markets
A.J.M. (Andrew) Bester, head of Wholesale Banking
M.A. (Marnix) van Stiphout, chief operations officer, chief transformation officer and chief technology
officer a.i.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> Authorisation of Consolidated Financial Statements
ING Bank Annual Report 2023 217
Parent company statement of financial position
as at 31 December before appropriation of result

in EUR million | 2023 | 2022 |  | in EUR million | 2023 | 2022
Assets |  |  |  | Liabilities |  |
Cash and balances with central banks 2 | 51,480 | 42,013 |  | Deposits from banks 13 | 55,153 | 70,515
Short-dated government paper 3 | 253 | 49 |  | Customer deposits 14 | 382,056 | 375,858
Loans and advances to banks 4 | 73,049 | 83,985 |  | Debt securities in issue | 61,231 | 39,526
Loans and advances to customers 5 | 344,894 | 346,012 |  | Other liabilities 15 | 69,058 | 88,197
Debt securities 6 | 48,671 | 43,784 |  | General provisions 16 | 782 | 883
Equity securities 7 | 6,279 | 4,263 |  | Subordinated loans 17 | 15,494 | 15,871
Investments in group companies 8 | 32,050 | 30,257 |  | Total liabilities | 583,776 | 590,851
Investments in associates and joint ventures 9 | 1,243 | 1,240 |  |  |  |
Intangible assets 10 | 582 | 565 |  | Equity 18 |  |
Equipment 11 | 783 | 828 |  | Share capital | 525 | 525
Other assets 12 | 64,682 | 80,400 |  | Share premium | 16,542 | 16,542
|  |  |  | Revaluation reserves | -181 | -862
|  |  |  | Legal and statutory reserves | -557 | 361
|  |  |  | Other reserves | 22,398 | 25,067
|  |  |  | Unappropriated result | 1,465 | 913
|  |  |  | Total equity | 40,191 | 42,546
Total assets | 623,967 | 633,396 |  | Total liabilities and equity | 623,967 | 633,396

References relate to the accompanying notes. These form an integral part of the Parent company financial statements.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 218
Parent company statement of profit or loss
for the years ended 31 December

in EUR million | 2023 | 2022
Interest income | 32,806 | 14,182
Interest expense | -27,119 | -8,260
Net interest income 19 | 5,687 | 5,922
Investment income and results from participating interests 20 | 4,931 | 2,215
Fee and commission income | 2,501 | 2,402
Fee and commission expense | -595 | -584
Net fee and commission income 21 | 1,906 | 1,818
Results from financial transactions 22 | 1,440 | 721
Other income | 75 | 153
Total income | 14,039 | 10,829
Staff expenses 23 | 3,455 | 3,249
Depreciation, amortisation and impairments 24 | 324 | 405
Other expenses 25 | 2,103 | 2,150
Addition to loan loss provisions | 52 | 705
Total expenses | 5,934 | 6,510
Result before tax | 8,105 | 4,319
Taxation 26 | 948 | 652
Result after tax | 7,157 | 3,667

References relate to the accompanying notes. These form an integral part of the Parent company
financial statements.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 219
Parent company statement of changes in equity

in EUR million | Share capital | Share premium | Revaluation reserves | Legal and statutory reserves | Other reserves | Unappropriated results | Total
Balance as at 31 December 2022 | 525 | 16,542 | -862 | 361 | 25,067 | 913 | 42,546
Realised and unrealised revaluations equity and debt instruments and other revaluations |  |  | -24 | 21 | -1 |  | -4
Realised gains/losses transferred to the statement of profit or loss |  |  | -3 | -5 |  |  | -8
Changes in cash flow hedge reserve |  |  | 766 | 231 |  |  | 997
Unrealised revaluations property in own use |  |  | 4 | -2 | 8 |  | 10
Remeasurement of the net defined benefit asset/liability |  |  | -63 | -22 |  |  | -85
Exchange rate differences and other |  |  | 0 | -132 |  |  | -132
Amount recognised directly in equity |  |  | 680 | 90 | 7 |  | 777
Net result |  |  |  | 336 |  | 6,821 | 7,157
|  |  | 680 | 426 | 7 | 6,821 | 7,934
Dividends and other cash distributions |  |  |  |  | -4,000 | -6,269 | -10,269
Employee share plans |  |  |  |  | 24 |  | 24
Changes in the composition of the group and other changes |  |  |  | -1,344 | 1,299 |  | -45
Balance as at 31 December 2023 | 525 | 16,542 | -181 | -557 | 22,398 | 1,465 | 40,191

Changes in individual components are presented in Note 18 ‘Equity’.

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ING Bank Annual Report 2023 220

Parent company statement of changes in equity - continued

in EUR million | Share capital | Share premium | Revaluation reserves | Legal and statutory reserves | Other reserves | Unappropriated results | Total
Balance as at 31 December 2021 | 525 | 16,542 | 1,617 | -548 | 27,117 | 2,661 | 47,914
Realised and unrealised revaluations equity and debt instruments and other revaluations |  |  | -290 | -212 | -23 |  | -525
Realised gains/losses transferred to the statement of profit or loss |  |  | -9 | -15 |  |  | -24
Changes in cash flow hedge reserve |  |  | -2,200 | -701 |  |  | -2,901
Unrealised revaluations property in own use |  |  | 1 | -33 | 26 |  | -5
Remeasurement of the net defined benefit asset/liability |  |  | -131 | 112 |  |  | -19
Exchange rate differences and other |  |  | 149 | 1,089 | 15 |  | 1,253
Amount recognised directly in equity |  |  | -2,479 | 239 | 19 |  | -2,221
Net result |  |  |  | 161 |  | 3,506 | 3,667
|  |  | -2,479 | 400 | 19 | 3,506 | 1,446
Transfer from unappropriated results |  |  |  |  | 2,661 | -2,661 |
Dividends and other cash distributions |  |  |  |  | -3,684 | -2,594 | -6,277
Employee share plans |  |  |  |  | 27 |  | 27
Changes in the composition of the group and other changes |  |  |  | 509 | -1,073 |  | -564
Balance as at 31 December 2022 | 525 | 16,542 | -862 | 361 | 25,067 | 913 | 42,546

Changes in individual components are presented in Note 18 ‘Equity’.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

ING Bank Annual Report 2023 221
Notes to the parent company financial statements
1 Basis of presentation
ING Bank N.V. ( Naamloze vennootschap) is registered at Bijlmerdreef 106, 1102 CT Amsterdam, the
Netherlands (Commercial Register of Amsterdam under number 33031431). ING Bank 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.
These Parent financial statements, as at and for the year ended 31 December 2023, comprise ING Bank
N.V. also referred to as ING Bank. The Parent company financial statements of ING Bank are prepared in
accordance with the financial reporting requirements included in Part 9 of Book 2, of the Dutch Civil Code.
In accordance with subsection 8 of section 362, Book 2 of the Dutch Civil Code, the recognition and
measurement principles applied in these Parent company financial statements are the same as those
applied in the ING Bank Consolidated financial statements, reference is made to Note 1 'Basis of
preparation and material accounting policy information' of the consolidated financial statements.
Investments in group companies are accounted in the Parent company accounts according to the equity
method. In addition to the notes to these financial statements, further information is included in the notes
to the consolidated financial statements.
A list containing the information referred to in Section 379 (1), Book 2, of the Dutch Civil Code has been
filed with the office of the Commercial Register of Amsterdam, in accordance with Section 379 (5), Book 2
of the Dutch Civil Code.
The parent company financial statements are presented in euros, rounded to the nearest million, unless
stated otherwise. Amounts may not add up due to rounding.
The ING Bank Parent financial statements, as at and for the year ended 31 December 2023, were
authorised for issue in accordance with a resolution of the Management Board Banking on 4 March 2024.
Parent company equity and related reserves
The total amount of equity in the Parent company financial statements equals Shareholders’ equity
(parent) in the Consolidated financial statements. Certain components within equity are different, as a
result of the following presentation differences between the parent company accounts and consolidated
accounts:
• Unrealised revaluations including those related to cash flow hedges within consolidated group
companies, presented in Other reserves - Revaluation reserve in the consolidated accounts, are
presented in the Share of associates and joint ventures reserve in the parent company accounts;
• Foreign currency translation from consolidated group companies, presented in Other reserves -
Currency translation reserve in the consolidated accounts, is presented in the Share of associates and
joint ventures reserve in the parent company accounts;
• Revaluations on investment property and certain participations recognised in income and
consequently presented in Retained earnings in the consolidated accounts, is presented in the Share of
associates and joint ventures reserve in the parent company accounts.
A legal reserve is carried at an amount equal to the share in the results of associates and joint ventures
since their first inclusion at net asset value less the amount of profit distributions to which rights have
accrued in the interim. Profit distributions which can be repatriated to the Netherlands without restriction
are likewise deducted from the Share of associates and joint ventures reserve.
Presentation parent company assets and liabilities
The presentation of assets and liabilities in the parent company financial statements differs from the
presentation in the consolidated financial statements. In below tables a reconciliation is included between
the presentation in the parent company versus consolidated financial statements.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 1 Basis of presentation
ING Bank Annual Report 2023 222

Presentation Parent company financial statements versus Consolidated financial statements, Assets
in EUR million | Parent company statement of financial position
Assets as at 31 December 2023 | Cash and balances with central banks | Short-dated government paper | Loans and advances to banks | Loans and advances to customers | Debt securities | Equity securities | Investments in associates and joint ventures | Intangible assets | Equipment | Other assets | Total
Included in Consolidated statement of financial position: |  |  |  |  |  |  |  |  |  |  |
Cash and balances with central banks | 51,480 |  |  |  |  |  |  |  |  |  | 51,480
Loans and advances to banks |  |  | 53,390 |  |  |  |  |  |  |  | 53,390
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |
– Trading assets |  | 10 | 1,247 | 10,837 | 6,595 | 4,460 |  |  |  | 44,241 | 67,390
– Non-trading derivatives |  |  |  |  |  |  |  |  |  | 14,887 | 14,887
– Designated as at fair value through profit or loss |  |  | 671 | 569 | 3,117 |  |  |  |  |  | 4,357
– Mandatorily at fair value through profit or loss |  |  | 17,702 | 14,714 | 886 | 40 |  |  |  |  | 33,343
Financial assets at fair value through other comprehensive income |  |  | 41 | 234 | 17,005 | 1,778 |  |  |  |  | 19,058
Securities at amortised cost |  | 243 |  |  | 21,068 |  |  |  |  |  | 21,311
Loans and advances to customers |  |  |  | 318,540 |  |  |  |  |  |  | 318,540
Investments in associates and joint ventures |  |  |  |  |  |  | 1,243 |  |  |  | 1,243
Property and equipment |  |  |  |  |  |  |  |  | 780 |  | 780
Intangible assets |  |  |  |  |  |  |  | 582 |  |  | 582
Current tax assets |  |  |  |  |  |  |  |  |  | 189 | 189
Deferred tax assets |  |  |  |  |  |  |  |  |  | 701 | 701
Other assets |  |  |  |  |  |  |  |  | 3 | 4,663 | 4,667
Total assets | 51,480 | 253 | 73,049 | 344,894 | 48,671 | 6,279 | 1,243 | 582 | 783 | 64,682 | 591,916

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 1 Basis of presentation
ING Bank Annual Report 2023 223

Presentation Parent company financial statements versus Consolidated financial statements, Liabilities
in EUR million | Parent company statement of financial position
Liabilities as at 31 December 2023 | Deposits from banks | Customer deposits | Debt securities in issue | Other liabilities | General provisions | Subordinated loans | Total
Included in Consolidated statement of financial position: |  |  |  |  |  |  |
Deposits from banks | 42,695 |  |  |  |  |  | 42,695
Customer deposits |  | 363,120 |  |  |  |  | 363,120
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |
– Trading liabilities | 1,075 | 9,328 |  | 44,514 |  |  | 54,916
– Non-trading derivatives |  |  |  | 17,969 |  |  | 17,969
– Designated as at fair value through profit or loss | 11,384 | 9,608 | 7,962 |  |  | 95 | 29,048
Current tax liabilities |  |  |  | 93 |  |  | 93
Deferred tax liabilities |  |  |  |  | 169 |  | 169
Provisions |  |  |  |  | 599 |  | 599
Other liabilities |  |  |  | 6,483 | 15 |  | 6,498
Debt securities in issue |  |  | 53,270 |  |  |  | 53,270
Subordinated loans |  |  |  |  |  | 15,399 | 15,399
Total liabilities | 55,153 | 382,056 | 61,231 | 69,058 | 782 | 15,494 | 583,776

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 1 Basis of presentation
ING Bank Annual Report 2023 224
Notes to the Parent company statement of financial position
2 Cash and balances with central banks
Amounts held at central banks amount to EUR 50,665 million (2022: EUR 41,206 million). In 2023, the
movement in Cash and balances with central banks reflects ING’s active liquidity management.
3 Short-dated government paper
Short-dated government paper includes Dutch and international government paper amounting to EUR 253
million (2022: EUR 49 million) for the company.
4 Loans and advances to banks

Loans and advances to banks |  |
in EUR million | 2023 | 2022
Non-subordinated receivables from: |  |
Group companies | 37,880 | 34,181
Third parties | 32,215 | 46,810
| 70,095 | 80,991
Subordinated receivables from: |  |
Group companies | 2,955 | 2,994
| 73,049 | 83,985

As at 31 December 2023, Loans and advances to banks includes receivables with regard to securities, which
have been acquired in reverse repurchase transactions amounting to EUR 23,682 million (2022: EUR 39,304
million).
5 Loans and advances to customers

Loans and advances to customers |  |
in EUR million | 2023 | 2022
Non-subordinated receivables from: |  |
ING Groep N.V. | 51 | 51
Group companies | 31,131 | 36,191
Third parties | 312,308 | 308,367
| 343,490 | 344,610
Subordinated receivables from: |  |
Group companies | 1,404 | 1,403
| 344,894 | 346,012

As at 31 December 2023, receivables included in Loans and advances to customers that are part of the
trading portfolio amount to EUR 10,837 million (2022: EUR 8,906 million).
Loans and advances to customers includes receivables with regard to securities which have been acquired
in reverse repurchase transactions amounting to EUR 23,625 million (2022: EUR 20,638 million) for the
company.
6 Debt securities

Debt securities by issuer |  |
in EUR million | 2023 | 2022
Public sector | 32,343 | 31,088
Other | 16,328 | 12,696
| 48,671 | 43,784

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> 2 Cash and balances with central banks
ING Bank Annual Report 2023 225

Debt securities analysed by listing |  |
in EUR million | 2023 | 2022
Listed | 38,424 | 32,555
Unlisted | 10,247 | 11,229
| 48,671 | 43,784

The above table includes the following non subordinated debt securities: |  |
in EUR million | 2023 | 2022
Non-subordinated debt securities issued by: |  |
Third parties | 47,701 | 42,949
| 47,701 | 42,949

Changes in debt securities 1 |  |
in EUR million | 2023 | 2022
Opening balance | 35,934 | 34,693
Additions | 16,605 | 19,105
Amortisation | -82 | -130
Changes in unrealised revaluations | 187 | -2,135
Disposals and redemptions | -14,655 | -16,118
Exchange rate differences | 0 | 490
Other changes | 83 | 29
Closing balance | 38,072 | 35,934

1 Excluding fair value through profit or loss portfolio.
7 Equity securities

Equity securities analysed by listing |  |
in EUR million | 2023 | 2022
Listed | 6,086 | 4,042
Unlisted | 193 | 221
| 6,279 | 4,263

Changes in equity securities at fair value through OCI. |  |
in EUR million | 2023 | 2022
Opening balance | 1,808 | 2,369
Additions | 26 | 12
Changes in unrealised revaluations | 42 | -55
Disposals | -1 | -491
Exchange rate differences | -101 | -38
Other changes | 5 | 10
Closing balance | 1,778 | 1,808

The cost or purchase price of the shares in the trading portfolio approximates their fair value. As at
31 December 2023 the cost or purchase price of shares excluding trading portfo lio is EUR 1,119 million lower
(2022: EUR 1,171 million lower) than the carrying amount.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 6 Debt securities
ING Bank Annual Report 2023 226
8 Investments in group companies

Investments in group companies |  |  |  |
in EUR million |  | 2023 |  | 2022
| Interest held (%) | Statement of financial position value | Interest held (%) | Statement of financial position value
ING België N.V. | 100 | 9,069 | 100 | 9,566
ING Holding Deutschland GMBH | 100 | 10,097 | 100 | 9,174
ING Bank (Australia) Limited | 100 | 3,722 | 100 | 3,894
ING Financial Holdings Corporation | 100 | 3,064 | 100 | 2,804
ING Bank Slaski S.A. | 75 | 2,865 | 75 | 1,496
ING Bank A.S. | 100 | 531 | 100 | 758
Bank Mendes Gans N.V. | 100 | 944 | 100 | 789
ING Real Estate B.V. | 100 | 91 | 100 | 71
ING Australia Holdings Limited | 100 | 9 | 100 | 10
ING Corporate Investments B.V. | 100 | 212 | 100 | 157
Other (including financing companies) |  | 1,445 |  | 1,539
|  | 32,050 |  | 30,257

As at 31 December 2023, Investments in group companies includes credit institutions of EUR 17,722 million
(2022: EUR 17,016 million).
As at 31 December 2023 listed investments in group companies amount to EUR 2,865 million (2022: EUR
1,496 million).

Changes in investments in group companies |  |
in EUR million | 2023 | 2022
Opening balance | 30,257 | 31,342
Repayment of capital injection | -225 | -226
Revaluations | 345 | -788
Results from group companies | 4,707 | 2,193
Dividends received | -2,892 | -2,502
Capital contribution |  | 14
Mergers and liquidations | 26 | -14
Exchange rate differences | -157 | 237
Other changes | -10 |
Closing balance | 32,050 | 30,257

9 Investments in associates and joint ventures

Investments in associates and joint ventures |  |
in EUR million |  | 2023 |  | 2022
| Interest held (%) | Statement of financial position value | Interest held (%) | Statement of financial position value
TMBThanachart Bank Public Company | 23 | 1,128 | 23 | 1,109
Other |  | 115 |  | 131
|  | 1,243 |  | 1,240

Changes in investments in associates and joint ventures |  |
in EUR million | 2023 | 2022
Opening balance | 1,240 | 1,354
Additions | 26 | 24
Share of results | 122 | 66
Dividends received | -62 | -38
Disposals | -50 | 1
Impairments | -5 | -192
Revaluations | 6 | -7
Exchange rate differences | -35 | 27
Other changes |  | 5
Closing balance | 1,243 | 1,240

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 8 Investments in group companies
ING Bank Annual Report 2023 227
10 Intangible assets

Changes in intangible assets
|  | Goodwill |  | Software |  | Other |  | Total
in EUR million | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022
Opening balance | 114 | 122 | 449 | 508 | 2 | 2 | 565 | 632
Additions |  |  | 174 | 115 |  |  | 174 | 115
Disposals |  |  | -6 | 1 |  |  | -6 | 1
Amortisation |  |  | -148 | -155 |  |  | -148 | -155
Impairments |  | -32 | -3 | -17 |  |  | -3 | -49
Exchange rate differences | 5 | -1 |  |  |  |  | 5 | -1
Other changes |  | 25 | -5 | -3 |  |  | -5 | 23
Closing balance | 119 | 114 | 461 | 449 | 2 | 2 | 582 | 565

Goodwill is tested for impairment annually.
11 Equipment

Changes in equipment |  |
in EUR million | 2023 | 2022
Opening balance | 828 | 901
Additions | 162 | 139
Depreciation | -170 | -183
Disposals | -36 | -15
Impairments | -2 | -19
Reversal of impairments | 0 | 1
Exchange rate differences | 0 | -2
Other changes | 0 | 7
Closing balance | 783 | 828
Gross carrying amount as at 31 December | 1,922 | 2,240
Accumulated depreciation as at 31 December | -1,139 | -1,412
Net carrying value | 783 | 828

12 Other assets

Other assets |  |
in EUR million | 2023 | 2022
Derivatives | 59,129 | 72,726
Deferred tax assets | 701 | 993
Income tax receivables | 189 | 203
Accrued assets | 499 | 531
Pension asset | 456 | 515
Other receivables | 3,708 | 5,431
| 64,682 | 80,400

Derivatives includes transactions with group companies of EUR 37,384 million (2022: EUR 44,988 million).
Other receivables includes EUR 2,476 million (2022: EUR 3,784 million) related to transactions still to be
settled at balance sheet date. As at 31 December 2023, an amount of EUR 589 millio n (2022: EUR 655
million) is expected to be settled after more than one year from the balance sheet date.
13 Deposits from banks

Deposits from banks |  |
in EUR million | 2023 | 2022
Group companies | 30,399 | 24,369
Third parties | 24,755 | 46,147
| 55,153 | 70,515

14 Customer deposits

Customer deposits by group companies and third parties |  |
in EUR million | 2023 | 2022
ING Groep N.V. | 54,272 | 49,338
Group companies | 10,596 | 12,526
Third parties | 317,188 | 313,994
| 382,056 | 375,858

Customer deposits from ING Groep N.V. includes EUR 40,213 million (2022: EUR 37,806 million) Senior non-
preferred debt.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 10 Intangible assets
ING Bank Annual Report 2023 228

Customer deposits by type |  |
in EUR million | 2023 | 2022
Current accounts / Overnight deposits | 108,552 | 133,277
Savings deposits | 152,655 | 139,169
Time deposits | 59,150 | 44,027
Other | 61,699 | 59,385
| 382,056 | 375,858

15 Other liabilities

Other liabilities |  |
in EUR million | 2023 | 2022
Derivatives | 60,140 | 79,360
Trading liabilities | 2,342 | 1,634
Costs payable | 980 | 984
Income tax payable | 93 | 99
Other taxation and social security contribution | 128 | 81
Other amounts payable | 5,375 | 6,038
| 69,058 | 88,197

Derivatives includes transactions with group companies of EUR 39,700 million (2022: EUR 51,849 million).
Other amounts payable includes EUR 3,752 million (2022: EUR 4,001 million) related to transactions still to
be settled at balance sheet date. As at 31 December 2023, an amount of EUR 61 million (2022: EUR 249
million) is expected to be settled after more than one year from the balance sheet date.
16 General provisions

General provisions |  |
in EUR million | 2023 | 2022
Deferred tax liabilities | 169 | 183
Pension liabilities and other staff-related liabilities | 15 | 7
Reorganisations and relocations | 124 | 237
Other | 475 | 456
| 782 | 883

As at 31 December 2023, an amount of EUR 234 million (2022: EUR 232 million) is expected to be settled
after more than one year from the balance sheet date.
17 Subordinated loans

Subordinated loans by group companies and third parties |  |
in EUR million | 2023 | 2022
Group companies | 16,328 | 16,441
Third parties including value changes hedged part loans | -833 | -570
| 15,494 | 15,871

Subordinated loans by type |  |
in EUR million | 2023 | 2022
Capital debentures | 3 | 1,761
Private loans | 15,492 | 14,111
| 15,494 | 15,871

The subordinated loans rank subordinated to the other liabilities in a winding-up of ING Bank.
18 Equity

Equity |  |
in EUR million | 2023 | 2022
Share capital | 525 | 525
Share premium | 16,542 | 16,542
Revaluation reserves | -181 | -862
Legal and statutory reserves | -557 | 361
Other reserves | 22,398 | 25,067
Unappropriated result | 1,465 | 913
Total equity | 40,191 | 42,546

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 14 Customer deposits
ING Bank Annual Report 2023 229

Share capital |  |  |  |
| Ordinary shares (par value EUR 1.13)
| Number x 1,000 | Amount in EUR million
| 2023 | 2022 | 2023 | 2022
Authorised share capital | 1,600,000 | 1,600,000 | 1,808 | 1,808
Unissued share capital | 1,134,965 | 1,134,965 | 1,283 | 1,283
Issued share capital | 465,035 | 465,035 | 525 | 525

No changes occurred in the issued share capital and share premium in 2023 and 2022.
ING Bank has 50 authorised preference shares with par value of EUR 1.13 per preference share. As at
31 December 2023, 7 preference shares were issued and fully paid (2022: 7 preference shares) amounting
to EUR 8 (2022: EUR 8).

Changes in revaluation reserves |  |  |  |  |  |  |  |
in EUR million |  |  |  |  |  |  |  |
2023 |  | Property in own use reserve | Equity securities at fair value through other comprehensive income | Debt instruments at fair value through other comprehensive income | Cash flow hedge reserve | Net defined benefit assets/- liability remeasurement reserve | Credit liability | Total
Opening balance |  | 24 | 1,171 | -272 | -1,908 | 55 | 70 | -862
Unrealised revaluations |  | 4 | -75 | 68 |  |  | -24 | -28
Realised gains/losses transferred to the statement of profit or loss |  |  |  | -3 |  |  |  | -3
Realised revaluations reclassified to retained earnings |  |  | 23 |  |  |  | -15 | 8
Changes in cash flow hedge reserve |  |  |  |  | 766 |  |  | 766
Change in net defined benefit assets/liability |  |  |  |  |  | -63 |  | -63
Closing balance |  | 27 | 1,119 | -208 | -1,142 | -8 | 30 | -181
2022 |  |  |  |  |  |  |  |
Opening balance |  | 22 | 1,260 | -63 | 292 | 186 | -80 | 1,617
Unrealised revaluations |  | 1 | -112 | -201 |  |  | 165 | -147
Realised gains/losses transferred to the statement of profit or loss |  |  |  | -9 |  |  |  | -9
Realised revaluations reclassified to retained earnings |  |  | 23 |  |  |  | -15 | 8
Changes in cash flow hedge reserve |  |  |  |  | -2,200 |  |  | -2,200
Change in net defined benefit assets/liability |  |  |  |  |  | -131 |  | -131
Closing balance |  | 24 | 1,171 | -272 | -1,908 | 55 | 70 | -862

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 18 Equity
ING Bank Annual Report 2023 230

Changes in legal and statutory reserves |  |  |  |  |
in EUR million |  |  |  |  |
2023 | Share of associates and joint ventures reserves | Currency translation reserve | Statutory reserves | Capitalised software | Total
Opening balance | 0 | -2,305 | 2,264 | 402 | 361
Result for the year |  |  | 336 |  | 336
Unrealised revaluations available-for-sale investments and other | 3 |  |  |  | 3
Realised gains/losses transferred to the statement of profit or loss | 12 |  |  |  | 12
Changes in cash flow hedge reserve | 231 |  |  |  | 231
Unrealised revaluation property in own use | -2 |  |  |  | -2
Changes in net defined benefit asset/liability remeasurement reserve | -22 |  |  |  | -22
Exchange rate differences | 130 | -262 |  |  | -132
Changes in composition of the group and other changes | -352 |  | -998 | 6 | -1,344
Closing balance | 0 | -2,567 | 1,602 | 408 | -557
2022 |  |  |  |  |
Opening balance | 385 | -3,488 | 2,103 | 452 | -548
Result for the year |  |  | 161 |  | 161
Unrealised revaluations available-for-sale investments and other | -252 |  |  |  | -252
Realised gains/losses transferred to the statement of profit or loss | 25 |  |  |  | 25
Changes in cash flow hedge reserve | -701 |  |  |  | -701
Unrealised revaluation property in own use | -33 |  |  |  | -33
Changes in net defined benefit asset/liability remeasurement reserve | 112 |  |  |  | 112
Exchange rate differences | -94 | 1,183 |  |  | 1,088
Changes in composition of the group and other changes | 559 |  |  | -50 | 509
Closing balance | 0 | -2,305 | 2,264 | 402 | 361

The Share of associates and joint ventures reserve includes the following components: Reserve for non-
distributable retained earnings of associates of EUR 1,037 million (2022: EUR 938 million), Revaluation
reserve of associates and joint ventures EUR -800 million (2022: EUR -1,044 million), Currency translation
reserve of EUR 40 million (2022: EUR -89 million) and Net defined benefit asset/liability remeasurement
reserve of EUR -309 million (2022: EUR -286 million).
Due to a decrease in forward interest rates in 2023 the interest rate swaps had a positive revaluation of EUR
231 million recognised in the cash flow hedge reserve which is presented as part of share of participating
interests reserve in the parent company financial statements. Due to negative revaluations, the share of
participating interest reserve became negative (EUR 31 million, 2022: EUR 482 million), which is not allowed
under Dutch law and is replenished out of, or subsequent released to, retained earnings, included in the line
Changes in the composition of the group and other changes.
T he Statutory reserves include non-distributable reserves of EUR 1,602 million (2022: EUR 2,264 million)
related to the former Stichting Regio Bank and the former Stichting Vakbondspaarbank SPN that cannot be
freely distributed in accordance with the article 23.1 of the articles of association.

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> 18 Equity
ING Bank Annual Report 2023 231
Changes in the value of hedging instruments that are designated as net investment hedges, are included in
the line Exchange rate differences and other.

Changes in other reserves, retained earnings
in EUR million | 2023 | 2022
Opening balance | 25,067 | 27,117
Transfer from unappropriated result | 0 | 2,661
Dividends and other cash distributions | -4,000 | -3,684
Employee share plans | 24 | 27
Changes in the composition of the group and other changes | 1,306 | -1,054
Closing balance | 22,398 | 25,067

Dividends and other cash distributions includes the cash distributions to the parent company ING Groep N.V.
to fund the share buyback programmes.
The reserve for cash flow hedges is included in the Share of associates and joint ventures reserve on a net
basis. The Revaluation reserve, Share of associates and joint ventures reserve and Currency translation
reserve cannot be freely distributed. Retained earnings can be freely distributed, except for an amount
equal to the negative balance in each of the components of the Revaluation reserve , Share of associates
and joint ventures reserve and the Currency translation reserve. Unrealised gains and losses on derivatives,
other than those used in cash flow hedges, are presented in the statement of profit or loss and are therefore
part of Retained earnings and are not included in Share of associates and joint ventures reserve.
The total amount of non-distributable reserves, in accordance with the financial reporting requirements per
Part 9 of Book 2 of the Dutch Civil Code, is EUR 6,696 million (2022: EUR 8,408 million).
Reference is made to Note 19 'Equity' and Note 44 'Capital management' in the ING Bank Consolidated
financial statements for additional information, including restrictions with respect to dividend and
repayment of capital.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 18 Equity
ING Bank Annual Report 2023 232
Notes to the Parent company statement of profit or loss
19 Net interest income

Net interest income |  |  |  |  |  |
in EUR million | 2023 | 2022 |  |  | 2023 | 2022
Interest income on loans | 17,483 | 9,511 |  | Interest expense on deposits from banks | 1,956 | 400
Interest income on impaired loans | 119 | 73 |  | Interest expense on customer deposits | 6,733 | 3,041
Negative interest on liabilities | 5 | 650 |  | Interest expense on debt securities | 1,461 | 501
Total interest income on loans | 17,608 | 10,233 |  | Interest expense on subordinated loans | 708 | 646
|  |  |  | Interest expense on securities at fair value through profit or loss | 1,936 | 565
Interest income on financial assets at fair value through OCI | 368 | 153 |  | Interest expense on non-trading derivatives (no hedge accounting) | 8,770 | 1,869
Interest income on financial assets at amortised cost | 394 | 275 |  | Interest expense on non-trading derivatives (hedge accounting) | 5,477 | 884
Interest income on securities at fair value through profit or loss | 2,645 | 763 |  | Other interest expense | 68 | 41
Interest income on non-trading derivatives (no hedge accounting) | 8,539 | 1,650 |  | Negative interest on assets | 9 | 313
Interest income on non-trading derivatives (hedge accounting) | 3,206 | 1,091 |  | Interest expense | 27,119 | 8,260
Other interest income | 46 | 17 |  |  |  |
Interest income | 32,806 | 14,182 |  | Net interest income | 5,687 | 5,922

Interest income includes EUR 9,370 million (2022: EUR 1,663 million) from group companies. Interest expense includes EUR 9,912 million (2022: EUR 2,512 million) to group companies.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

> 19 Net interest income
ING Bank Annual Report 2023 233
20 Investment income and results from participating interests

Investment income and results from participating interests
in EUR million | 2023 | 2022
Results from shares and other non-fixed income securities | 107 | 141
Results from group companies | 4,707 | 2,193
Results from associates, joint ventures and other participations | 122 | 74
Impairment of associates and joint ventures | -5 | -192
| 4,931 | 2,215

Impairments
There were no material impairments of associates and joint ventures in 2023. In 2022, Impairments of EUR
-192 million is predominantly attributable to TTB of EUR -165 million.
21 Net fee and commission income

Fee and commission income
in EUR million | 2023 | 2022
Payment services | 1,215 | 1,093
Securities business | 195 | 205
Insurance and other broking | 115 | 128
Portfolio Management fees | 262 | 259
Lending business | 313 | 299
Financial guarantees and other commitments | 270 | 301
Other | 132 | 118
| 2,501 | 2,402

Fee and commission expenses
in EUR million | 2023 | 2022
Payment services | 349 | 292
Securities business | 73 | 107
Distribution of products (Externally) | 89 | 93
Other | 84 | 92
| 595 | 584

22 Results from financial transactions

Results from financial transactions |  |
in EUR million | 2023 | 2022
Results from securities trading portfolio | 860 | -382
Results from currency trading portfolio | 559 | -157
Results from non-trading derivatives | 593 | 1,742
Other | -572 | -482
| 1,440 | 721

Result from financial transactions includes EUR 374 million (2022: EUR -1,542 million) from group
companies. Other includes EUR -30 million ( 2022: EUR -288 million) related to fair value changes on trading
derivatives.
23 Staff expenses

Staff expenses |  |
in EUR million | 2023 | 2022
Salaries | 2,291 | 2,127
Social security costs | 271 | 252
Pension costs and other staff related benefit costs | 297 | 294
Other staff expenses | 597 | 576
| 3,455 | 3,249

Remuneration of Senior management, Management board and Supervisory board
Reference is made to Note 43 'Related parties' in the ING Bank Consolidated financial statements.
24 Depreciation, amortisation and impairments

Depreciation and amortization |  |
in EUR million | 2023 | 2022
Depreciation of equipment | 170 | 183
Amortisation of software and other intangible assets | 148 | 155
Impairments and reversal of impairments | 5 | 67
| 324 | 405

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> 20 Investment income and results from participating interests
ING Bank Annual Report 2023 234
Impairments includes goodwill (EUR 0 million, 2022: EUR 32 million), software (EUR 3 million, 2022: EUR 17
million) and equipment (EUR 2 million, 2022: EUR 19 million).
25 Other expenses

Other expenses |  |
in EUR million | 2023 | 2022
Computer costs | 545 | 508
Office expenses | 113 | 110
Travel and accommodation expenses | 48 | 29
Advertising and public relations | 163 | 141
External advisory fees | 211 | 231
Regulatory costs | 554 | 609
Addition/(releases) of provision for reorganisations and relocations | 52 | 53
Other | 417 | 469
| 2,103 | 2,150

26 Taxation

in EUR million | 2023 | 2022
Current taxation | 931 | 743
Deferred taxation | 16 | -91
| 948 | 652

Reconciliation of the weighted average statutory income tax rate to ING Bank’s effective income tax rate
in EUR million | 2023 | 2022
Result before tax from continuing operations | 8,105 | 4,319
Weighted average statutory tax rate | 24.9% | 22.4%
Weighted average statutory tax amount | 2,020 | 967
Permanent differences affecting current tax |  |
Participation exemption | -1,248 | -548
Other income not subject to tax | -45 | -16
Expenses not deductible for tax purposes | 190 | 191
Current tax from previously unrecognised amounts | 1 | 10
State and local taxes | 32 | 22
Adjustments to prior periods | -4 | 5
Differences affecting deferred tax |  |
Impact on deferred tax from change in tax rates | 2 | 5
Deferred tax from previously unrecognised amounts | 0 | -3
Write-off/reversal of deferred tax assets | 0 | 21
Effective tax amount | 948 | 652
Effective tax rate | 11.7% | 15.1%

For more information on the reconciliation of the weighted average statutory income tax rate to ING Bank’s
effective income tax rate reference is made to Note 31 'Taxation' in the ING Bank Consolidated financial
statements.

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> 25 Other expenses
ING Bank Annual Report 2023 235
27 Maturity of certain assets a nd liabilities

Analysis of certain assets and liabilities by maturity
in EUR million 2023 | Less than 1 month | 1–3 months | 3–12 months | 1–5 years | Over 5 years | Maturity not applicable | Total
Assets |  |  |  |  |  |  |
Loans and advances to banks | 14,902 | 4,316 | 6,780 | 20,480 | 6,906 | 19,665 | 73,049
Loans and advances to customers | 33,819 | 8,536 | 26,599 | 100,266 | 149,600 | 26,074 | 344,894
Liabilities |  |  |  |  |  |  |
Deposits from banks | 27,752 | 7,216 | 3,576 | 2,168 | 678 | 13,764 | 55,153
Customer deposits | 275,449 | 16,304 | 23,644 | 30,710 | 17,817 | 18,132 | 382,056
Debt securities in issue | 3,210 | 5,500 | 18,976 | 11,844 | 9,632 | 12,069 | 61,231
Subordinated loans |  |  |  |  | 16,093 | -598 | 15,494

Analysis of certain assets and liabilities by maturity
in EUR million 2022 | Less than 1 month | 1–3 months | 3–12 months | 1–5 years | Over 5 years | Maturity not applicable | Total
Assets |  |  |  |  |  |  |
Loans and advances to banks | 34,312 | 2,655 | 7,968 | 15,828 | 7,000 | 16,222 | 83,985
Loans and advances to customers | 37,620 | 12,260 | 25,469 | 97,261 | 151,886 | 21,517 | 346,012
Liabilities |  |  |  |  |  |  |
Deposits from banks | 23,088 | 2,555 | 26,115 | 8,227 | 803 | 9,727 | 70,515
Customer deposits | 280,922 | 13,288 | 18,392 | 25,870 | 21,459 | 15,926 | 375,858
Debt securities in issue | 1,974 | 4,582 | 7,402 | 5,835 | 8,459 | 11,274 | 39,526
Subordinated loans |  |  | 760 |  | 16,243 | -1,132 | 15,871

28 Assets not freely disposable

Assets not freely disposable |  |
in EUR million | 2023 | 2022
Equity and debt instruments | 16,063 | 12,662
Lending | 42,667 | 58,336
Banks | 9,165 | 15,932
Other assets | 449 | 538
| 68,344 | 87,468

The table includes assets relating to securities lending as well as sale and repurchase transactions
29 Contingent liabilities and other commitments

Contingent liabilities by type |  |
in EUR million | 2023 | 2022
Guarantees | 48,235 | 47,452
Irrevocable letters of credit | 12,283 | 13,180
Other | 0 | 0
Contingent debts | 60,518 | 60,632
Irrevocable facilities | 86,774 | 86,259
| 147,292 | 146,891

Contingent debts |  |
in EUR million | 2023 | 2022
Group companies | 29,986 | 27,902
Third parties | 30,532 | 32,730
| 60,518 | 60,632

Irrevocable facilities |  |
in EUR million | 2023 | 2022
Group companies | 1 | 3
Third parties | 86,773 | 86,256
| 86,774 | 86,259

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> 27 Maturity of certain assets and liabilities
ING Bank Annual Report 2023 236
30 Other
Guarantees
ING Bank has issued guarantees as participant in collective arrangements of national banking funds and as
a participant in required collective guarantee schemes. For example, ING Bank N.V. provided a guarantee to
the German Deposit Guarantee Fund (‘Einlagensicherundsfonds’ or ESF) under section 5 (10) of the by-laws
of this fund, where ING Bank N.V. indemnifies the Association of German Banks Berlin against any losses it
might incur as result of actions taken with respect to ING Germany. The ESF is a voluntary collective
guarantee scheme for retail savings and deposits in excess of EUR 100,000.
ING Bank N.V. has issued statements of liabilities in connection with Section 403 Book 2 of the Dutch Civil
Code (‘403 statements’) and issued third party guarantees (and third party letters of comfort/awareness) in
a limited number of cases. Third party guarantees are used when ING Bank N.V. is requested to issue a
guarantee to a third party creditor of one of its subsidiaries in order to guarantee the (financial)
performance of this subsidiary. 403 statements have been issued for the following Dutch subsidiaries:
• B.V. Deelnemings- en Financieringsmaatschappij 'Nova Zembla'
• B.V. Maatschappij van Onroerende Goederen 'Het Middenstandshuis'
• Bank Mendes Gans N.V.
• BMG monumenten B.V.
• Cofiton B.V.
• Entero B.V.
• ING Bank Personeel B.V.
• ING Hubs B.V.
• ING Commercial Finance B.V.
• ING Corporate Investments B.V.
• ING Corporate Investments Mezzanine Fonds B.V.
• ING Corporate Investments Participaties B.V.
• ING Corporate Investments Structured Finance B.V.
• ING Groenbank N.V.
• ING Lease (Nederland) B.V.
• ING Sustainable Investments B.V.
• ING Vastgoed Ontwikkeling B.V.
• Nationale-Nederlanden Hypotheekbedrijf N.V.
• Nationale-Nederlanden Intervest II B.V.
• WestlandUtrecht Verzekeringen B.V.
Cla im agreements
In the ordinary course of business we have entered into a number of agreements whereby we are provided
indemnifications related to sale of our past businesses and agreements whereby we made detailed
arrangements regarding allocation and handling of claims.
Fiscal unity
ING Bank N.V. forms a fiscal unity with ING Groep N.V. and several Dutch banking entities for corporation tax
purposes. ING Bank N.V. and ING Groep N.V. and its banking subsidiaries that form part of the fiscal unity are
jointly and severally liable for taxation payable by the fiscal unity. Settlements of corporate income tax paid
or received are executed by ING Bank N.V.
31 Proposed appropriation of results
For 2023, it is proposed that the result, insofar at the disposal of the General Meeting, will be appropriated as
follows:

Proposed appropriation of result |
in EUR million | 2023
Net result | 7,157
- Addition to reserves pursuant to Article 25 of the Articles of Association | 336
- Proposed to be added to the Other Reserves pursuant to Article 25 of the Articles of Association | 699
- Available for dividend distribution | 6,122

The total dividend of EUR 6,122 million was paid in May 2023 (EUR 1,490 million), August 2023 (EUR 2,020
million), November 2023 (EUR 1,847 million) and in February 2024 (EUR 766 million) as an interim dividend.
32 Subsequent events
There are no subsequent events to report other than those already disclosed in Note 39 'Legal proceedings'
of the consolidated financial statements.

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> 30 Other
ING Bank Annual Report 2023 237
Authorisation of Parent company financial statements
Amsterdam, 4 March 2024
The Supervisory Board
K.K. (Karl) Guha, chair
A.M.G. (Mike) Rees, vice-chair
J. (Juan) Colombás
M. (Margarete) Haase
L.J. (Lodewijk) Hijmans van den Bergh
H.A.H. (Herman) Hulst
H.H.J.G. (Harold) Naus
A. (Alexandra) Reich
H.W.P.M.A. (Herna) Verhagen
The Management Board Banking
S.J.A. (Steven) van Rijswijk, CEO and chairman
T. (Tanate) Phutrakul, CFO
L. (Ljiljana) Čortan, CRO
P. (Pinar) Abay, head of Retail, Market Leaders and Challengers & Growth Markets
A.J.M. (Andrew) Bester, head of Wholesale Banking
M.A. (Marnix) van Stiphout, chief operations officer, chief transformation officer and chief technology
officer a.i.

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> Authorisation of Parent company financial statements
ING Bank Annual Report 2023 238
To: the General Meeting of the Shareholder and the Supervisory Board of ING Bank N.V.
Report on the audit of the financial statements 2023 included in the annual report
Our opinion
In our opinion:
— the accompanying consolidated financial statements give a true and fair view of the financial position of ING Bank
N.V. as at 31 December 2023 and of its result and its cash flows for the year then ended, in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and with Part 9 of Book 2
of the Dutch Civil Code;
— the accompanying company financial statements give a true and fair view of the financial position of ING Bank N.V. as
at 31 December 2023 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil
Code.
What we have audited
We have audited the financial statements 2023 of ING Bank N.V. (the ’Company’ or ‘ING Bank’) based in Amsterdam. The
financial statements include the consolidated financial statements and the company financial statements.
The consolidated financial statements comprise:
1 the consolidated statement of financial position as at 31 December 2023;
2 the following consolidated statements for 2023: the statement of profit or loss, the statements of comprehensive
income, changes in equity and cash flows; and
3 the notes comprising material accounting policy information and other explanatory information.
The company financial statements comprise:
1 the parent company statement of financial position as at 31 December 2023;
2 the parent company statement of profit or loss and the statement of changes in equity for 2023; and
3 the notes comprising the basis of preparation and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities
under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of
our report.
We are independent of ING Bank N.V. in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants
bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence)
and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening
gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our
opinion thereon. The information in respect of going concern, fraud and non-compliance with laws and regulations,
climate-related risks and the key audit matters was addressed in this context, and we do not provide a separate opinion or
conclusion on these matters.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
Summary

Materiality
— Group materiality of EUR 300 million (2022: EUR 250 million). — 2.9% of profit before tax (2022: 4.5% of profit before tax).
Group audit
— 88% of profit before tax covered by audit procedures performed by component auditors (2022: 83%). — 92% of total assets covered by audit procedures performed by component auditors (2022: 92%).

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KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number 33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.239

Risk of material misstatements related to Fraud, Non-compliance with laws and regulations, Going concern and Climate-related risks
— Fraud risks: presumed risk of management override of controls and the risk of management override over the collective loan loss provisioning identified and incorporated in our audit response. — Non-compliance with laws and regulations (NOCLAR) risks: our risk assessment procedures related to NOCLAR risks did not result in the identification of a risk of material misstatement. — Going concern risks: no going concern risks identified. — Climate risks: our risk assessment procedures related to climate-related risks did not result in the identification of a risk of material misstatement.
Key audit matters
— Assessment of expected credit losses on loans and advances to customers and loans and advances to banks. — User access and change management

Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 300
million (2022: EUR 250 million). The materiality is determined with reference to profit before tax and represents 2.9%
(2022: 4.5%) of that balance. We consider profit before tax as the most appropriate benchmark based on our assessment
of the general information needs of the users of the financial statements and given the fact that ING Bank is a profit-
oriented entity. The increase in materiality reflects an increase in profit before tax. We have also taken into account
misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for
qualitative reasons.
We agreed with the Audit Committee of the Supervisory Board that misstatements identified during our audit in excess of
EUR 15 million (2022: EUR 12.5 million) would be reported to them, as well as smaller misstatements that in our view
must be reported on qualitative grounds.
Scope of the group audit
ING Bank is at the head of a group of components. The financial information of this group is included in the consolidated
financial statements of ING Bank.
ING Bank is structured in 6 segments: Retail Netherlands, Retail Belgium, Retail Germany, Retail Other, Wholesale
Banking and Corporate Line Banking, each comprising of multiple legal entities and/or covering different countries.
Because we are ultimately responsible for the group audit, we are responsible for directing, supervising and performing
the group audit. In this respect, we have determined the nature and extent of audit procedures to be carried out for group
entities or so-called components.
Our group audit mainly focused on significant components. These components are either individually financially significant
due to their relative size in the group or because we identified a significant risk of material misstatement for one or more
account balances of these entities. In addition, we included certain other non-significant components in the scope of our
group audit in order to arrive at a sufficient coverage over all significant account balances.
This resulted in a full or specific scope audit for 36 components globally, in total covering 16 countries. This resulted in a
coverage of 88% of profit before tax and 92% of total assets. For the remaining 12% of profit before tax and the remaining
8% of total assets, procedures were performed at the group level including analytical procedures in order to corroborate
that our scoping remained appropriate throughout the audit.
The consolidation of components in the group, the disclosures in the financial statements and certain accounting topics
that are performed on a group level were further covered by the group audit team. Procedures performed by the group
audit team included, but were not limited to, substantive procedures with respect to equity and certain elements of the
expected credit loss provisioning process.
All components in scope for group reporting are audited by KPMG member firms. We sent detailed audit instructions to all
component auditors, covering significant areas such as the identified risks of material misstatement on a group level and
further set out the information that is required to be reported to the group audit team.
We performed site visits with local management and local audit teams, also to perform file reviews in The Netherlands,
Belgium, Germany and Poland. We performed a remote file review for Singapore and the USA. We visited Australia, The
Philippines, The United Kingdom, Switzerland and Türkiye during the year to meet local management and the local audit
team to discuss the planned audit approach and progress of their audit work.
For all components in scope of the group audit, we held our annual planning conference in The Netherlands. Our
component auditors were directly informed by the Group Financial Controller and Investor Relations on current
developments. In addition, we held conference calls and/or had remote meetings with the audit teams of these
components and we attended closing meetings with management for components in The Netherlands, Belgium and
Germany. During these meetings and calls, the planning, risk assessment, procedures performed, findings and
observations reported to the group auditor were discussed in detail and any further work deemed necessary by the group
audit team was then performed.
The group audit team set component materiality levels which ranged from EUR 30 million to EUR 115 million, based on
the mix of relative size and financial statement risk profile of the components within the group in order to reduce the
aggregation risk to an acceptable level.
By performing the procedures mentioned above at group components, together with additional procedures at group level,
we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an
opinion about the financial statements.

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Our procedures as described above can be summarised as follows:

Profit before tax
88% |  | 12%
Covered by audit procedures performed by component auditors |  | Covered by additional procedures performed at group level
Total assets
92% |  | 8%
Covered by audit procedures performed by component auditors |  | Covered by additional procedures performed at group level

Audit response to the risk of fraud and non-compliance with laws and regulations
Introduction
In chapters ‘Strategy and performance’ and ‘Risk management - non-financial risk and compliance risk’ of the annual
report and note 39 of the financial statements, the Management Board Banking describes its procedures in respect of the
risk of fraud and non-compliance with laws and regulations. In the Supervisory Board report the assessment in respect of
these topics is described.
As part of our audit, we have gained insights into the Company and its business environment and the Company’s risk
management in relation to fraud and non-compliance.
Our procedures included, among other things, assessing the Company’s code of conduct, whistleblowing procedures,
incidents register and its procedures to investigate indications of possible fraud and non-compliance. Furthermore, we
performed relevant inquiries with management, the Audit Committee of the Supervisory Board and other relevant
functions, such as Internal Audit, Legal Counsel and Compliance. We corroborated these inquiries with the results of our
inspection of correspondence with relevant supervisory authorities and regulators. We have also incorporated elements of
unpredictability in our audit, such as making changes to our high-risk criteria that we applied to journal entry testing,
designing additional substantive audit procedures, varying the timing of audit procedures including testing of controls, a
site visit to a remote location (The Philippines) and involved forensic specialists in our audit procedures.
Non- compliance with laws and regulations
As a result, from our risk assessment, we identified the following laws and regulations as those most likely to have a
material effect on the financial statements in case of non-compliance:
— fraud, corruption and anti-bribery law (reflecting the Company’s significant and geographically diverse nature of
operations and clients);
— anti-money laundering and anti-terrorist financing law (reflecting the Company’s involvement in a number of ongoing
investigations by national competent authorities);
— data protection law (reflecting the processing of sensitive data inherent to the Company’s business activities);
— prudential and supervision regulations (reflecting the Company’s nature of operations);
— sanction law (reflecting the Company’s significant and geographically diverse nature of operations and clients); and
— anti-competition law (reflecting the Company’s involvement in a number of ongoing investigations by national
competition authorities).
Our procedures did not result in the identification of a risk of material misstatement.
Fraud risk
We assessed the presumed fraud risk on revenue recognition as not significant, because the accounting of interest
income and commission income is based on automatically generated accruals based on static data taken from the source
systems and therefore contains routine transactions not subject to management judgement. Furthermore, the contracts
used in the financial sector generally use standardised definitions which reduce the complexity of revenue recognition to a
low level.
Based on the above and on the auditing standards, we identified the following fraud risks that are relevant to our audit and
responded as follows:
Management override of controls (a presumed risk)
Management is in a unique position to manipulate accounting records and prepare fraudulent financial statements by
overriding controls that otherwise appear to be operating effectively, such as reporting fictitious journal entries.
We evaluated the design and the implementation and tested the operating effectiveness of internal controls that mitigate
fraud risks, such as processes related to journal entries and estimates related to loan loss provisions. We also performed
a data analysis of high-risk journal entries and evaluated key estimates and judgments for bias by the Company’s
management. Where we identified instances of unexpected journal entries or other risks through our data analytics, we
performed additional audit procedures to address each identified journal entry, including testing of transactions back to
source information.

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Management override of collective loan loss provisioning (ECL)
With respect to the risk and responses in regards of fraud in relation to management override of Expected Credit Loss
(ECL) provision results, we refer to the Key audit matter ‘Assessment of Expected Credit Losses on loans and advances
to customers and loans and advances to banks’.
Our evaluation of procedures performed in relation to fraud and non-compliance with laws and regulations did not result in
an additional key audit matter. Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and
non-compliance that are considered material for our audit.
We communicated our risk assessment, audit responses and results to management and the Audit Committee of the
Supervisory Board.
Audit response to going concern
As explained on page 127 of the financial statements, the Management Board Banking has performed its going concern
assessment and has not identified any going concern risks. To assess the Management Board Banking’s assessment, we
have performed, inter alia, the following procedures:
— we considered whether the Management Board Banking’s assessment of the going concern risks includes all relevant
information of which we are aware as a result of our audit;
— we considered whether the developments in interest and inflation rates, geopolitical uncertainty and risks of disruption
due to innovation and the emergence of new competitors from the technology sector indicate a going concern risk;
— we analysed the Company’s financial position as at year-end and compared it to the previous financial year in terms of
indicators that could identify going concern risks; and
— we inspected regulatory correspondence to obtain an understanding of the Company’s capital and liquidity position,
that underpins management’s assessment of the going concern assumption for financial reporting.
The outcome of our risk assessment procedures on the going concern assessment, including our consideration of findings
from our audit procedures on other areas, did not give reason to perform additional audit procedures on the Management
Board Banking’s going concern assessment.
Audit response to climate-related risks
In planning In planning our audit, we have considered the potential impact of risks arising from climate change on the
Company’s business and its financial statements. The Company has set out its commitments and ambitions relating to
climate change in the chapters ‘Strategy and performance’ (‘Sustainability at the heart’) and ‘Risk
management’ (‘Environmental, social and governance risk’) of the annual report. The Company aims to reach net zero in
their own operations, to steer the most carbon-intensive parts of the loan portfolio towards net zero by 2050 and
intermediate target setting, and to finance and advise specific clients in line with a net-zero economy.
Management extensively assessed, against the background of the Company’s business and operations, how climate-
related risks and opportunities and the Company’s own commitments and ambitions could have a significant impact on its
business or could impose the need to modify its strategy and operations.
Management has considered the impact of both transition and physical risks on the financial statements in accordance
with the applicable financial reporting framework, more specifically the expected credit losses of loans and advances, as
described in section ‘Risk management – environmental, social and governance risk’ and the section ‘Risk management –
climate and environmental risks in IFRS9 models’ of the annual report. Management disclosed considerations directly
impacting the financial statements captions as well as the medium to longer term risk drivers and concluded that these do
not have a material impact on the 2023 financial statements.
Management prepared the financial statements, including considering whether the implications from climate-related risks
and commitments and ambitions have been appropriately accounted for and disclosed. As part of our audit we performed
a risk assessment of the impact of climate-related risk and the Company’s commitments/ambitions in respect of climate
change on the financial statements and our audit approach. In doing this we performed the following:
— To understand management's processes:
— we performed an analysis of the external environment and obtained an understanding of relevant sustainability
themes and issues relevant for ING;
— we made inquiries with the Management Board Banking, other senior management and members of the ESG
Committee and the Audit Committee of the Supervisory Board.
— we inspected relevant documents to understand management's assessment against the background of the
Company’s business and operations of the potential impact of climate-related risk and opportunities on the
company’s annual report and financial statements and the company's preparedness for this;
— we read the minutes of meetings of the Management Board Banking and the Supervisory Board;
— we inspected regulatory correspondence to obtain an understanding of management’s assessment of climate risk
and the related risk management thereof:
— we gained an understanding whether any current and/or future regulations may impact ING, such as greenhouse
gas emission regulations, potential increases in taxes on current products and future climate reporting obligations;
and
— we gained an understanding of ING’s Net Zero alignment pathways, including the intermediate target setting for
2030.
— We evaluated climate-related fraud risk factors on reporting inappropriate disclosures on climate-related risk and
pressures for management to meet the climate targets, since that such targets are linked to the Management Board
Banking’s remuneration.
— We performed specific inquiries with the Legal Counsel on any climate risk related allegations and claims against the
Company, and we performed specific substantive procedures in relation to the related disclosure in Note 39 Legal
proceedings.
— We used our climate change subject matter experts to assist in understanding how climate-related risks and pressures
for management to meet the climate targets and opportunities may affect the Company and its accounting in the
current year’s financial statements.
— We used our climate change subject matter experts and modelling experts to assist in gaining understanding how
climate-related risks are of impact on the expected credit loss estimation, including the credit risk models, as
determined by the Company.

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Based on the procedures performed above, we found that climate related risks have no material impact on the 2023
financial statements under the requirements of International Financial Reporting Standards (IFRS) as adopted by the
European Union (EU) and Part 9 of Book 2 of the Dutch Civil Code and have no impact on our key audit matters.
Furthermore, we have read the ‘Other information’ as included in the annual report with respect to climate-related risks
and considered whether such information contains material inconsistencies with the financial statements or our
knowledge obtained through the audit, in particular as described above and our knowledge obtained otherwise.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements. We have communicated the key audit matters to the Audit Committee of the Supervisory Board. The
key audit matters are not a comprehensive reflection of all matters discussed.

Assessment of expected credit losses on loans and advances to customers and loans and advances to banks

Description
As discussed in the Credit Risk section on pages 53-82 and in Note 3 and Note 7 in the consolidated financial statements,
the loans and advances to customers amount to EUR 642 billion and loans and advances to banks amount to EUR 17
billion as at 31 December 2023. These loans and advances are measured at amortised cost, less expected credit losses
(‘ECL’) of EUR 6 billion.
Management estimated ECL using three components: probability of default (‘PD’), loss given default (‘LGD’) and exposure
at default (‘EAD’). Management applied forward looking economic scenarios with associated weights. Relevant
macroeconomic factors include the gross domestic product (‘GDP’), house price index (‘HPI’) and unemployment rate.
The recent economic conditions are outside the bounds of historical experience used to develop ECL model
methodologies and result in greater uncertainties to estimate ECLs. These uncertainties are addressed by judgemental
overlays by management.
Our response
We identified the assessment of ECL on loans and advances to customers and loans and advances to banks as a key
audit matter because of the significant and complex auditor judgment and specialised skills and knowledge required to
evaluate the following elements of the overall ECL estimate:
— The judgements used to develop the model-driven PD and LGD parameters.
— The determination of the amount and timing of expected future recovery cash flows for individual loan provision
assessments for impaired loans and the probability weights applied in the presence of more than one recovery
scenario.
— The use of forward-looking macroeconomic forecasts in ECL, including GDP, HPI and unemployment rate.
— The consistent identification and application of criteria for significant increase in credit risk (‘SICR’) in the
macroeconomic environment and geopolitical situation which remains uncertain.
— The determination of management overlays to the modelled ECL due to the continued uncertainty in the
macroeconomic outlook in the global economy combined with the delay in which the models capture emerging risks.
The following are the primary procedures we performed to address this key audit matter.
— We evaluated the design and tested the operating effectiveness of certain internal controls related to the estimation of
ECL for loans and advances to customers and loans and advances to banks. This included controls relating to the
selection of key assumptions (including PD, LGD and macroeconomic forecasts), review and authorisation of model
outputs, governance and monitoring of the ECL process, determination of credit risk ratings, the estimation of future
recovery cash flows of individual loan loss provisions and associated scenario weights assigned and the determination
of management overlays to the modelled ECL.
— We involved credit risk professionals with specialised skills and knowledge who assisted in evaluating the
assumptions used to determine the PD and LGD parameters in models used by the Company to determine the
collective provisions, including the evaluation of the recalibrated and redeveloped credit risk models. This included
reperforming back-testing of certain models to evaluate the current model performance and evaluation of the
identification of SICR in loans by challenging the scope of management’s criteria used in staging assessments,
consistent application of the thresholds applied within each criterion, and the ability of staging criteria to identify SICR
prior to loans being credit impaired. In addition, the credit risk professionals assisted in testing management overlays
recorded, including interest and inflation related overlays for both the wholesale banking and retail banking portfolios
and an overlay related to interest only residential mortgages in the Netherlands.
— We involved economic professionals with specialised skills and knowledge, who assisted in assessing the Company’s
methodology to determine the macroeconomic forecasts used in determining the ECL. We tested the reasonableness
of management’s forecasts against other external benchmarks and our own internal forecasts.
— We involved corporate finance professionals with specialised skills and knowledge, who assisted in assessing the
methodologies, cash flows and collateral values used in expected future recovery cash flow assessments of individual
loan loss provisions for impaired loans and in challenging management’s use of recovery scenarios and expected
cash flows by comparing against industry trends and comparable benchmarks and recalculating recovery amounts.
— We assessed whether the credit risk management disclosures appropriately reflect and address the uncertainties
which exist in determining the ECL.
Our observation
Based on our procedures performed, we found management’s overall assessment relating to the valuation of loans and
advances to customers and banks within an acceptable range and adequately disclosed in Note 3 and Note 7 of the
financial statements.

User access and change management

Description
ING Bank is highly dependent on its IT environment for the continuity of operations and reliability of financial reporting.
The IT environment of ING Bank evolves over time, which includes the implementation of tooling to support automated
control execution related to user access and change management of IT assets. We consider general IT controls, and in

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particular user access and change management controls, that support the effective operations of automated controls a
key audit matter.
Our response
Our audit approach depends to a large extent on the effectiveness of automated controls, which are dependent on user
access and change management general IT controls to operate effectively. Given the technical characteristics of these
controls, IT auditors are an integrated part of our engagement team.
They test the design, implementation and operating effectiveness of automated controls and general IT controls for
applications, databases, operating systems, and automated tooling. The general IT controls included access provisioning,
design of access rights, timely removal of user access rights, high privileged user access and monitoring, access to
deploy changes and the testing and approval of changes prior to implementation.
Our audit procedures identified deficiencies in high privileged user access and monitoring, including access to modify
configurations, deploy code and or change data. Management has remediated some but not all the deficiencies before
year end. For the deficiencies open during the year or at year end, we performed additional procedures to respond to the
risk of unauthorised and/or unintentional access or changes to automated controls. These procedures included testing
compensating controls implemented by management and additional substantive procedures.
Our observation
The combination of compensating controls and additional substantive procedures support our audit approach.
Report on the other information included in the annual report
In addition to the financial statements and our auditor’s report thereon, the annual report contains other information.
Based on the following procedures performed, we conclude that the other information:
— is consistent with the financial statements and does not contain material misstatements; and
— contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and other
information.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the
financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the
Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the
financial statements.
The Management Board Banking is responsible for the preparation of the other information, including the information as
required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the General Meeting of the Shareholder as auditor of ING Bank N.V. on 11 May 2015, as of the
audit for the year 2016 and have operated as statutory auditor ever since that financial year. We have been reappointed
by the General Meeting of the Shareholder on 23 April 2019 to continue to serve ING Bank as its external auditor for the
financial years 2020-2023.We have been reappointed by the General Meeting of the Shareholder on 24 April 2023 to
continue to serve ING Bank as its external auditor for the financial years 2024 and 2025.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific
requirements regarding statutory audits of public-interest entities.
Services rendered
For the period to which our statutory audit relates, in addition to this audit, we have provided the following services to the
Company and its controlled undertakings:
— agreed-upon procedures and assurance engagements for the benefit of external stakeholders, largely driven by
regulatory requirements.
European Single Electronic Format (ESEF)
ING Bank has prepared its annual report in ESEF. The requirements for this are set out in the Delegated Regulation (EU)
2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format
(hereinafter: the RTS on ESEF).
In our opinion the annual report prepared in XHTML format, including the (partly) marked-up consolidated financial
statements as included in the reporting package by ING Bank, complies in all material respects with the RTS on ESEF.
The Management Board Banking is responsible for preparing the annual report including the financial statements in
accordance with the RTS on ESEF, whereby the Management Board Banking combines the various components into one
single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package
complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including Dutch Standard
3950N ’Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal
verantwoordingsdocument’ (assurance engagements relating to compliance with criteria for digital reporting). Our
examination included among others:
— obtaining an understanding of the entity's financial reporting process, including the preparation of the reporting
package;
— identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on
ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for our
opinion, including;

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— obtaining the reporting package and performing validations to determine whether the reporting package containing the
Inline XBRL instance document and the XBRL extension taxonomy files have been prepared in accordance with the
technical specifications as included in the RTS on ESEF; and
— examining the information related to the consolidated financial statements in the reporting package to determine
whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.
Description of responsibilities regarding the financial statements
Responsibilities of the Management Board Banking and the Supervisory Board for the financial
statements
The Management Board Banking is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and Part 9
of Book 2 of the Dutch Civil Code. Furthermore, the Management Board Banking is responsible for such internal control
as the Management Board Banking determines is necessary to enable the preparation of the financial statements that are
free from material misstatement, whether due to fraud or error. In that respect the Management Board Banking, under
supervision of the Supervisory Board, is responsible for the prevention and detection of fraud and non-compliance with
laws and regulations, including determining measures to resolve the consequences of it and to prevent recurrence.
As part of the preparation of the financial statements, the Management Board Banking is responsible for assessing the
Company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the
Management Board Banking should prepare the financial statements using the going concern basis of accounting unless
the Management Board Banking either intends to liquidate the company or to cease operations or has no realistic
alternative but to do so. The Management Board Banking should disclose events and circumstances that may cast
significant doubt on the company’s ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the Company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate
audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all
material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
A further description of our responsibilities for the audit of the financial statements is included in the appendix of this
auditor's report. This description forms part of our auditor’s report.
Amstelveen, 4 March 2024
KPMG Accountants N.V.
P.A.M. de Wit RA
Appendix:
Description of our responsibilities for the audit of the financial statements

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Appendix
Description of our responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout the audit, in
accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included
among others:
— identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error,
designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
— obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control;
— evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Management Board Banking;
— concluding on the appropriateness of the Management Board Banking’s use of the going concern basis of accounting,
and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company
to cease to continue as a going concern;
— evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and
— evaluating whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We are solely responsible for the opinion and therefore responsible to obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business activities within the group to express an opinion on the
financial statements. In this respect we are also responsible for directing, supervising and performing the group audit.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant findings in internal control that we identify during our audit. In this
respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on
specific requirements regarding statutory audits of public-interest entities. The information included in this additional report
is consistent with our audit opinion in this auditor’s report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were
of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating
the matter is in the public interest.

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Articles of Association – Appropriation of results
Appropriation of results
The result is appropriated pursuant to Article 25 of the Articles of Association of ING Bank N.V., the
relevant stipulations of which state that the result shall firstly be appropriated to the Stichting Regio Bank
Reserve, respectively the Reserve Stichting Vakbondsspaarbank SPN or charged to that reserves in
proportion to the ratio between the Stichting Regio Bank Reserve, respectively the Reserve Stichting
Vakbondsspaarbank SPN and the company's equity at the end of the relevant financial year and that the
remainder shall be at the disposal of the General Meeting.

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> Articles of Association – Appropriation of results
ING Bank Annual Report 2023 247
Risk factors
Summary of risk factors
The following is a summary of the principal risk factors that could have a material adverse effect on the
reputation, business activities, financial condition, results and prospects of ING. Please carefully consider all
of the information discussed in this section “Risk factors” for a detailed description of these risks.
Risks related to financial conditions, market environment and general economic trends
• Our revenues and earnings are affected by the volatility and strength of the economic, business,
liquidity, funding and capital markets environments of the various geographic regions in which we
conduct business, including Russia and Ukraine, as well as by changes in customer behaviour in these
regions, and an adverse change in any one region could have an impact on our business, results and
financial condition.
• Inflation, interest volatility and other interest rate changes may adversely affect our business, results
and financial condition.
• The default of a major market participant could disrupt the markets and may have an adverse effect on
our business, results and financial condition.
• Continued risk of political instability and fiscal uncertainty in Europe and the United States, as well as
ongoing volatility in the financial markets and the economy generally have adversely affected, and may
continue to adversely affect, our business, results and financial condition.
• Discontinuation of interest rate benchmarks may negatively affect our business, results and financial
condition.
• Market conditions, including those observed over the past few years, may increase the risk of loans being
impaired and have a negative effect on our results and financial condition.
• We may incur losses due to failures of banks falling under the scope of state compensation schemes.
Risks related to the regulation and supervision of the Group
• Non-compliance with laws and/or regulations concerning financial services or financial institutions,
including with respect to financial economic crimes, could result in fines and other liabilities, penalties or
consequences for us, which could materially affect our business and reputation and reduce our
profitability.
• Changes in laws and/or regulations governing financial services or financial institutions or the application
of such laws and/or regulations may increase our operating costs and limit our activities.
• We are subject to additional legal and regulatory risk in certain countries with less developed or
predictable legal and regulatory frameworks.
• We are subject to the regulatory supervision of the ECB and other regulators with extensive supervisory
and investigatory powers.
• Failure to meet minimum capital and other prudential regulatory requirements as applicable to us from
time to time may have a material adverse effect on our business, results and financial condition and on
our ability to make payments on certain of our securities.
• Our US commodities and derivatives business is subject to CFTC and SEC regulation under the Dodd-Frank
Act.
• We are subject to several other bank recovery and resolution regimes that include statutory write-down
and conversion as well as other powers, which remains subject to significant uncertainties as to the
scope and impact on us .
Risks related to litigation, enforcement proceedings and investigations and to changes
in tax laws
• We may be subject to litigation, enforcement proceedings, investigations or other regulatory actions,
and adverse publicity.
• We are subject to different tax regulations in each of the jurisdictions where we conduct business, and
are exposed to changes in tax laws and risks of non-compliance with proceedings or investigations with
respect to tax laws.
• We may be subject to US tax investigation if we fail to comply with our obligations as a Participating
Financial Institution in respect of the Foreign Account Tax Compliance Act (FATCA) and as a Qualified
Intermediary in respect of other US tax regulations
• ING is exposed to the risk of claims from customers who feel misled or treated unfairly because of advice
or information received.
Risks related to the Group’s business and operations
• ING may be unable to meet internal or external aims or expectations or requirements with respect to
ESG-related matters.
• ING may be unable to adapt its products and services to meet changing customer behaviour and
demand, including as a result of ESG-related matters.
• ING’s business and operations are exposed to physical risks, including as a direct result of climate
change.
• ING’s business and operations are exposed to transition risks related to climate change.
• Operational and IT risks, such as system disruptions or failures, breaches of security, cyber attacks,
human error, changes in operational practices, inadequate controls including in respect of third parties

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> Risk factors
ING Bank Annual Report 2023 248
with which we do business or outbreaks of communicable diseases may adversely impact our
reputation, business and results.
• We are subject to increasing risks related to cybercrime and compliance with cybersecurity regulation.
• Because we operate in highly competitive markets, including our home market, we may not be able to
increase or maintain our market share, which may have an adverse effect on our results.
• We may not always be able to protect our intellectual property developed in our products and services
and may be subject to infringement claims, which could adversely impact our core business, inhibit
efforts to monetise our internal innovations and restrict our ability to capitalise on future opportunities.
• The inability of counterparties to meet their financial obligations or our inability to fully enforce our rights
against counterparties could have a material adverse effect on our results.
• A downgrade or a potential downgrade in our credit ratings could have an adverse impact on our results
and net results.
• An inability to retain or attract key personnel may affect our business and results.
• We may incur further liabilities in respect of our defined benefit retirement plans if the value of plan
assets is not sufficient to cover potential obligations, including as a result of differences between actual
results and underlying actuarial assumptions and models.
Risks related to the Group’s risk management practices
• Risks relating to our use of quantitative models or assumptions to model client behaviour for the
purposes of our market calculations may adversely impact our reputation or results.
• We may be unable to manage our risks successfully through derivatives.
Risks related to the Group’s liquidity and financing activities
• Adverse conditions in the capital and credit markets, or significant withdrawals of customer deposits,
may impact our liquidity, borrowing and capital positions, as well as the cost of liquidity, borrowings and
capital.
• As a holding company, ING Groep N.V. is dependent for liquidity on payments from its subsidiaries, many
of which are subject to regulatory and other restrictions on their ability to transact with affiliates.
Additional risks relating to ownership of ING shares
• Holders of ING shares may experience dilution of their holdings and may be impacted by any share
buyback programme.
• Because we are incorporated under the laws of the Netherlands and many of the members of our
Supervisory and Executive Board and our officers reside outside of the United States, it may be difficult to
enforce judgements of US courts against ING or the members of our Supervisory and Executive Boards or
our officers.
Risk factors
Any of the risks described below could have a material adverse effect on the business activities, financial
condition, results and prospects of ING as well as ING’s reputation. ING may face a number of the risks
described below simultaneously and some risks described below may be interdependent. While the risk
factors below have been divided into categories, some risk factors could belong in more than one category
and investors should carefully consider all of the risk factors set out in this section. Additional risks of which
the Company is not presently aware, or that are currently viewed as immaterial, could also affect the
business operations of ING and have a material adverse effect on ING’s business activities, financial
condition, results and prospects. The market price of ING shares or other securities could decline due to any
of those risks including the risks described below, and investors could lose all or part of their investments.
Although the most material risk factors have been presented first within each category, the order in which
the remaining risk factors are presented is not necessarily an indication of the likelihood of the risks actually
materialising, of the potential significance of the risks or of the scope of any potential negative impact to
our business, results, financial condition and prospects.
Risks related to financial conditions, market environment and general economic trends
Our revenues and earnings are affected by the volatility and strength of the economic,
business, liquidity, funding and capital markets environments of the various geographic
regions in which we conduct business, as well as by changes in customer behaviour in
these regions, and an adverse change in any one region could have an impact on our
business, results and financial condition.
Because ING is a multinational banking and financial services corporation, with a global presence and
serving 40 million customers, corporate clients and financial institutions in 38 countries, ING’s business,
results and financial condition may be significantly impacted by turmoil and volatility in the worldwide
financial markets or in the particular geographic areas in which we operate. In Retail Banking, our products
include savings, payments, investments, loans and mortgages. In Wholesale Banking, we provide specialised
lending, tailored corporate finance, debt and equity market solutions, payments & cash management, trade
and treasury services. Negative developments in relevant financial markets and/or countries or regions have
in the past had and may in the future have a material adverse impact on our business, results and financial
condition, including as a result of the potential consequences listed below.
Factors such as inflation or deflation, interest rates, securities prices, credit spreads, liquidity spreads,
exchange rates, consumer spending, changes in customer behaviour, climate change, business investment,
real estate values and private equity valuations, government spending the volatility and strength of the
capital markets, political events and trends, supply chain disruptions, shortages, terrorism, pandemics and
epidemics (such as the recent Covid-19 pandemic) or other widespread health emergencies all impact the

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ING Bank Annual Report 2023 249
business and economic environment and, ultimately, our solvency, liquidity and the amount and
profitability of business we conduct in a specific geographic region. Some of these risks are often
experienced globally as well as in specific geographic regions and are described in greater detail below
under the headings: 'Interest rate volatility and other interest rate changes may adversely affect our
business, results and financial condition'; 'Inflation and deflation may negatively affect our business, results
and financial condition'; 'Market conditions, including those observed over the past few years may increase
the risk of loans being impaired and have a negative effect on our results and financial condition'; and
'Continued risk of political instability and fiscal uncertainty in Europe and the United States, as well as
ongoing volatility in the financial markets and the economy generally have adversely affected, and may
continue to adversely affect, our business, results and financial condition'. All of these are factors in local
and regional economies as well as in the global economy, and we may be affected by changes in any one
of these factors in any one country or region, and more if more of these factors occur simultaneously and/
or in multiple countries or regions or on a global scale.
In case one or more of the factors mentioned above adversely affects the profitability of our business, this
might also result, among other things, in the following:
• inadequate reserves or provisions, in relation to which losses could ultimately be realised through profit
and loss and shareholders’ equity;
• the write-down of tax assets impacting net results and/or equity;
• impairment expenses related to goodwill and other intangible assets, impacting our net result and
equity; and/or
• movements in risk-weighted assets for the determination of required capital.
In particular, we are exposed to financial, economic, market and political conditions in the Benelux countries
and Germany, from which we derive a significant portion of our revenues in both Retail Banking and
Wholesale Banking, and which could present risks of economic downturn. Though less material, we also
derive substantial revenues in the following geographic regions: United States, Türkiye, Poland and the
remainder of Eastern Europe, Southern Europe, East Asia (primarily Singapore among others) and Australia.
In an economic downturn affecting some or all of these jurisdictions, we expect that higher unemployment,
lower family income, lower corporate earnings, higher corporate and private debt defaults, lower business
investments and lower consumer spending would adversely affect the demand for banking products, and
that ING may need to increase its reserves and provisions, each of which may result in overall lower
earnings. Securities prices, real estate values and private equity valuations may also be adversely impacted,
and any such losses would be realised through profit and loss and shareholders’ equity. We also offer a
number of financial products that expose us to risks associated with fluctuations in interest rates, securities
prices, corporate and private default rates, the value of real estate assets, exchange rates and credit
spreads. Further, while the Covid-19 pandemic and related response measures have eased, the effects of
these measures (including consequences for commercial real estate occupancies and valuations as a result
of the increased prevalence of work-from-home or hybrid working arrangements) are still being felt in the
financial performance and stability of certain of our business customers. As a result, their impact may
continue to affect our business. We also have wholesale banking activities in both Russia and Ukraine, as
well as investments in Russia, some of which are denominated in local currency. In response to Russia’s
invasion of Ukraine, the international community imposed various punitive measures, including sanctions,
capital controls, restrictions on SWIFT access and restrictions on central bank activity. These measures have
significantly impacted, and may continue to significantly impact, Russia’s economy and have contributed to
heightened instability in global markets and increased inflation due in part to supply chain constraints, as
well as higher energy and commodity prices. Should prices remain elevated for an extended period, most
businesses and households would be negatively impacted, and our business in Russia and Ukraine, as well
as our broader business, may be adversely affected, including through spill-over risk to the entire wholesale
banking portfolio (e.g. commodities financing, energy and utilities and energy-consuming clients).
Environmental and/or climate risks may also directly and indirectly impact ING, for example through,
among other things, losses suffered as a result of extreme weather events, the impact of climate-related
transition risk on the risk and return profile or value of security or operations of certain categories of
customer to which ING has exposure. In addition, these risks may also increase ING’s reputational and
litigation risk if the economic activity that ING supports is not in line with community expectations or ING’s
external commitments or legal or regulatory requirements (this includes, but is not limited to, greenwashing
risk).
For further information on ING’s exposure to particular geographic areas, see Note 28 ‘Information on
geographical areas’ to the consolidated financial statements.
Inflation, interest rate volatility and other interest rate changes may adversely affect
our business, results and financial condition.
Globally, inflation has increased significantly over the past two years and has remained elevated for a
prolonged period. In general, both inflation and deflation may influence consumers’ spending habits,
affecting the economic activity and consequently our core revenue stream (e.g. in terms of overall financial
health of borrowers and loan demand, and collateral management, among other things). Furthermore,
inflation and deflation may have repercussions on interest rate spreads, and therefore on the profitability of
traditional banking activities. Overall, both inflation and deflation can pose significant challenges, impacting
our ability to generate revenue, manage risk, and maintain a stable financial position.
Further, the recent increase in inflation has resulted in an increase in market interest rates in many major
economies. Increased interest rates may impact our business by:
• Decreasing the estimated fair value of certain fixed income securities that we hold in our investment
portfolios, resulting in:
• Reduced levels of unrealised capital gains available to us, which could negatively impact our solvency
position and net income, and/or

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> Risk factors
ING Bank Annual Report 2023 250
• a decrease in collateral values;
• Resulting in increased withdrawal of certain savings products, particularly those with fixed rates below
market rates;
• Requiring us, as an issuer of securities, to pay higher interest rates on debt securities that we issue in the
financial markets from time to time to finance our operations, which would increase our interest
expenses and reduce our results;
• Resulting in further customer defaults as interest rate rises flow through into payment stress for lower
credit quality customers.
A significant and sustained increase in inflation has historically also been associated with decreased prices
for equity securities and sluggish performance of equity markets generally. A sustained decline in equity
markets may:
• Result in impairment charges to equity securities that we hold in our investment portfolios and reduced
levels of unrealised capital gains available to us which would reduce our net income, and;
• Lower the value of our equity investments impacting our capital position.
Central Banks (including the ECB, the US Federal Reserve and the RBA and RBNZ) have undertaken
successive raises in policy rates over the last two years, and have reiterated their commitments to keeping
policy rates sufficiently restrictive for as long as necessary, believing that maintaining the key interest rates
at their current levels over an extended period could significantly contribute to reducing inflation. As a result
of these measures, inflation decreased in 2023 from peak 2022 levels, and is expected to decrease further in
2024. Despite the publicly stated approach of Central Banks, analysts foresee the ECB leading the rate-
cutting cycle in 2024 ahead of the Federal Reserve. A decrease in prevailing interest rates may lead to lower
interest income from loans and investments, reduced profitability of traditional banking activities, and
potential declines in the value of certain fixed income securities we hold in our investment portfolio, as well
as negatively affecting our business in other ways, including leading to:
• Lower interest rates, which can compress the net interest income margins because of potential
reduction in the interest income earned from loans;
• Lower earnings over time on investments, as reinvestments will earn lower rates;
• Increased prepayment or redemption of mortgages and fixed maturity securities in our investment
portfolios, as well as increased prepayments of corporate loans. This as borrowers seek to borrow at
lower interest rates potentially combined with lower credit spreads. Consequently, we may be required
to reinvest the proceeds into assets at lower interest rates;
• Lower profitability as the result of a decrease in the spread between client rates earned on assets and
client rates paid on savings, current account and other liabilities;
• Higher costs for certain derivative instruments that may be used to hedge certain of our product risks;
• Lower profitability since we may not be able to fully track the decline in interest rates in our savings
rates;
• Lower profitability since we may not always be entitled to impose surcharges to customers to
compensate for the decline in interest rates;
• Lower profitability since we may have to pay a higher premium for the defined contribution scheme in
the Netherlands for which the premium paid is dependent on interest rate developments and the Dutch
Central Bank’s (DNB) methodology for determining the ultimate forward rate;
• Lower interest rates may cause asset margins to decrease, thereby lowering our results. This may, for
example, be the consequence of increased competition for investments as result of the low rates,
thereby driving margins down; and/or
• (Depending on the position) a significant collateral posting requirement associated with our interest rate
hedge programs, which could materially and adversely affect liquidity and our profitability.
In addition, given the volatility in inflation and related volatility in interest rates, a failure to accurately
anticipate inflation on an ongoing basis and factor it into our product pricing assumptions may result in
mispricing of our products, which could materially and adversely impact our results.
Each of the preceding risks, should they materialise, may adversely affect our business, results and financial
condition.
The default of a major market participant could disrupt the markets and may have an
adverse effect on our business, results and financial condition.
Within the financial services industry, the severe distress or default of any one institution (including
sovereigns and central counterparties (CCPs)) could lead to defaults by, or the severe distress of, other
market participants. While prudential regulation may reduce the probability of a default by a major financial
institution, the actual occurrence of such a default could have a material adverse impact on ING. Such
distress of, or default by, a major financial institution could disrupt markets or clearance and settlement
systems and lead to a chain of defaults by other financial institutions, since the commercial and financial
soundness of many financial institutions may be closely related as a result of credit, trading, clearing or
other relationships. Also, the perceived lack of creditworthiness of a sovereign or a major financial institution
(or a default by any such entity) may lead to market-wide liquidity problems and losses or defaults by us or
by other institutions. This risk is also referred to as ‘systemic risk’ and may adversely affect financial
intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges with
whom we interact on a daily basis and financial instruments of sovereigns in which we invest. Systemic risk
could impact ING directly, by exposing it to material credit losses on transactions with defaulting
counterparties or indirectly by significantly reducing the available market liquidity on which ING and its
lending customers depend to fund their operations and/or leading to a write-down of loans or securities
held by ING. In addition, ING may also be faced with additional open market risk for which hedging or
mitigation strategies may not be available or effective (either by hedges eliminated by defaulting

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ING Bank Annual Report 2023 251
counterparties, or reduce market liquidity). Systemic risk could have a material adverse effect on our ability
to raise new funding and on our business, results and financial condition. In addition, such distress or failure
could impact future product sales as a potential result of reduced confidence in the financial services
industry.
Continued risk of political instability and fiscal uncertainty in Europe and the United
States, as well as ongoing volatility in the financial markets and the economy generally
have adversely affected, and may continue to adversely affect, our business, results
and financial condition.
Our global business and results are materially affected by conditions in the global capital markets and the
economy generally. In Europe, there are continuing concerns over weaker economic conditions, levels of
unemployment in certain countries, the availability and cost of credit, as well as credit spreads. In addition,
geopolitical issues, including trade tensions between the US and China, increasing protectionism between
key countries, and issues with respect to North Korea and the Middle East, including the ongoing conflict
between Israel and Hamas, may all contribute to adverse developments in the global capital markets and
the economy generally. In addition, Russia’s invasion of Ukraine and related international response
measures have had, and are expected to continue to have, a negative impact on regional and global
economic conditions, including heightened instability in global markets and increased inflation due in part
to supply chain constraints, as well as higher energy and commodity prices. Should prices remain elevated
for an extended period, most businesses and households would be negatively impacted, and our business in
Russia and Ukraine, as well as our broader business, may be adversely affected, including through spill-over
risk to our entire wholesale banking portfolio, in areas such as commodities financing, energy and utilities
and energy-consuming clients. Furthermore, the upcoming presidential election cycle in the United States
has the potential to be disruptive to the global economy as it may result in leadership changes in many
federal administrative agencies and result in a range of new policies, executive orders, rules, initiatives and
other changes to United States fiscal, tax, regulation, environmental, climate and other policies.
Moreover, there is a risk that an adverse credit event at one or more European sovereign debtors (including
a credit rating downgrade or a default) could trigger a broader economic downturn in Europe and
elsewhere. In addition, the confluence of these and other factors has resulted in volatile foreign exchange
markets. International equity markets have also continued to experience heightened volatility and turmoil,
with issuers, including ourselves, that have exposure to the real estate, mortgage, private equity and credit
markets particularly affected. These events, market upheavals and continuing risks, including high levels of
volatility, have had and may continue to have an adverse effect on our results, in part because we have a
large investment portfolio.
There is also continued uncertainty over the long-term outlook for the tax, spending and borrowing policies
of the US, the future economic performance of the US within the global economy and any potential future
budgetary restrictions in the US, with a potential impact on a future sovereign credit ratings downgrade of
the US government, including the rating of US Treasury securities. A downgrade of US Treasury securities
could also impact the ratings and perceived creditworthiness of instruments issued, insured or guaranteed
by institutions, agencies or instrumentalities directly linked to the US government. US Treasury securities
and other US government-linked securities are key assets on the balance sheets of many financial
institutions and are widely used as collateral by financial institutions to meet their day-to-day cash flows in
the short-term debt market. The impact of any further downgrades to the sovereign credit rating of the US
government or a default by the US government on its debt obligations would create broader financial
turmoil and uncertainty, which would weigh heavily on the global financial system and could consequently
result in a significant adverse impact to the Group’s business and operations.
In many cases, the markets for investments and instruments have been and remain illiquid, and issues
relating to counterparty credit ratings and other factors have exacerbated pricing and valuation
uncertainties. Valuation of such investments and instruments is a complex process involving the
consideration of market transactions, pricing models, management judgement and other factors, and is
also impacted by external factors, such as underlying mortgage default rates, interest rates, rating agency
actions and property valuations. Historically these factors have resulted in, among other things, valuation
and impairment issues in connection with our exposures to European sovereign debt and other investments.
Any of these general developments in global financial and political conditions could negatively impact our
business, results and financial condition in future periods.
Discontinuation of interest rate benchmarks may negatively affect our business, results
and financial condition.
Changes to major interest rates benchmarks may negatively affect our business, including the level of net
interest revenue. Financial markets have historically relied on Interbank Offered Rates (IBORs) benchmarks,
such as the London Interbank Offered Rate (LIBOR), the Euro Over Night Index Average (EONIA) and the Euro
Interbank Offered Rate (EURIBOR). While some interest rate benchmarks have been reformed and will
continue to exist, such as EURIBOR, others such as EONIA and LIBOR have been, or will be, replaced by
recommended alternative rates. EONIA ceased to be published on 3 January 2022, and was succeeded by
€STR. GBP, JPY, CHF and EUR LIBOR ceased in 2021/2022, and, more recently, USD LIBOR ceased on 30 June
2023. Synthetic rates of certain GBP and USD LIBOR rates are available for a limited time to facilitate the
transition of remaining legacy transactions.
In 2022 the Polish National Working Group published a roadmap indicating that the market should be
prepared for a cessation of, among others, the WIBOR reference rate. It is expected that the reform will be
completed by the end of 2027, with the offering of financial products using the new benchmark (WIRON) to
progress gradually in 2023 and 2024.

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> Risk factors
ING Bank Annual Report 2023 252
The discontinuation of WIBOR, CDOR and other local benchmarks in the future could result in a number of
risks for the Group, its customers, and the financial services industry more widely. These risks include legal
risks and costs in relation to changes required to documentation for existing transactions and for clients’
contracts. In addition to the heightened conduct and operational risks, the process of adopting new
reference rates may expose the Group to an increased level of financial risk, such as potential earnings
volatility resulting from contract modifications and changes in hedge accounting relationships.
ING continues to monitor market developments and reform plans for other rates to anticipate the impact on
our customers and any related risks.
Market conditions, including those observed over the past few years, may increase the
risk of loans being impaired and have a negative effect on our results and financial
condition.
We are exposed to the risk that our borrowers (including sovereigns) may not repay their loans according to
their contractual terms and that the collateral securing the payment of these loans may be insufficient. We
may see adverse changes in the credit quality of our borrowers and counterparties, for example, as a result
of their inability to refinance their indebtedness or in the case of a decline in financial performance. Adverse
changes in the credit quality of our borrowers and/or decreasing collateral values would result in increased
capital requirements and provisions, and any deterioration of market conditions may lead to increasing
delinquencies, defaults and insolvencies across a range of sectors. This may lead to impairment charges on
loans and other assets, higher costs and additions to loan loss provisions. A significant increase in the size of
our provision for loan losses could have a material adverse effect on our business, results and financial
condition.
If we are significantly exposed to a concentrated set of customers or counterparties, an adverse event
affecting these parties could lead to increased losses for the Group, and adversely affect our business,
results and financial condition.
We may incur losses due to failures of banks falling under the scope of state
compensation schemes.
While prudential regulation is intended to minimise the risk of bank failures, in the event such a failure
occurs, given our size, we may incur significant compensation payments to be made under the Dutch
Deposit Guarantee Scheme (DGS), which we may be unable to recover from the bankrupt estate, and
therefore the consequences of any future failure of such a bank could be significant to ING. Such costs and
the associated costs to be borne by us may have a material adverse effect on our results and financial
condition. On the basis of the EU Directive on deposit guarantee schemes, ING pays quarterly risk-weighted
contributions into a DGS-fund. The DGS-fund is to grow to a target size of 0.8 percent of all deposits
guaranteed under the DGS, which is expected to be reached in July 2024. In case of failure of a Dutch bank,
depositor compensation is paid from the DGS-fund. If the available financial means of the fund are
insufficient, Dutch banks, including ING, may be required to pay extraordinary ex-post contributions not
exceeding 0.5 percent of their covered deposits per calendar year. In exceptional circumstances, and with
the consent of the competent authority, higher contributions may be required. However, extraordinary ex-
post contributions may be temporarily deferred if, and for so long as, they would jeopardise the solvency or
liquidity of a bank. Depending on the size of the failed bank, the available financial means in the fund, and
the required additional financial means, the impact of the extraordinary ex-post contributions on ING may
be material.
Since 2015, the EU has been discussing the introduction of a pan-European deposit guarantee scheme
(EDIS), which would (partly) replace or complement national compensation schemes.
On 18 April 2023, the European Commission published its proposals for the revision of the common
framework for bank crisis management and deposit insurance (CMDI) that focuses on small and medium-
sized banks, but will affect all EU banks. The CMDI framework consists of the Bank Recovery and Resolution
Directive (BRRD), the Single Resolution Mechanism (SRMR) and the Deposit Guarantee Schemes Directive
(DGSD). The revision of the CMDI framework is part of the debate on the completion of the Banking Union
and in particular its third and missing pillar EDIS. As at the date hereof, EDIS has not yet been adopted by
the European Commission.
Risks related to the regulation and supervision of the Group
Non-compliance with applicable laws and/or regulations, including with respect to
financial economic crimes, could result in fines and other liabilities, penalties or
consequences for us, which could materially affect our business and reputation and
reduce our profitability.
ING has faced, and in the future may continue to face, the consequences of non-compliance with applicable
laws and regulations, including the potential commencement of regulatory investigations or legal
proceedings. For additional information on legal proceedings, see Note 42 ‘Legal proceedings’ in the
consolidated financial statements. There are potential risks in areas where applicable regulations may be
unclear: subject to multiple interpretations or under development; where regulations may conflict with one
another; or where regulators revise their previous guidance or courts overturn previous rulings. These could
result in our failure to meet applicable standards. Regulators and other authorities have the power to bring
investigations and/or administrative or judicial proceedings against us, which could result, among other
things, in suspension or revocation of our licences, cease and desist orders, fines, civil penalties, criminal

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> Risk factors
ING Bank Annual Report 2023 253
penalties or other disciplinary action, which could materially harm our results and financial condition as well
as ING’s reputation. If we fail to address, or appear to fail to address, any of these matters appropriately, our
reputation could be harmed and we could be subject to additional legal risk, which could, in turn, increase
the size and number of claims and damages brought against us or subject us to enforcement actions, fines
and penalties.
Furthermore, as a financial institution, we are exposed to the risk of unintentional involvement in criminal
activity in connection with financial economic crimes, including sanctions circumvention and money
laundering and the funding of terrorist and other criminal activities. The failure or perceived failure by us to
comply with legal and regulatory requirements with respect to financial economic crimes may result in
adverse publicity, claims and allegations, litigation and regulatory investigations and sanctions, which may
have a material adverse effect on our business, results, financial condition and/or prospects in any given
period. For further discussion on the impact of litigation, enforcement proceedings, investigations or other
regulatory actions with respect to financial economic crimes, see 'We may be subject to litigation,
enforcement proceedings, investigations or other regulatory actions, and adverse publicity' below.
Changes in laws and/or regulations governing financial services or financial institutions
or the application of such laws and/or regulations may increase our operating costs and
limit our activities.
We are subject to detailed banking laws and financial regulations in the jurisdictions in which we conduct
business. Regulation of the industries in which we operate has become more extensive and complex, while
also attracting supervisory scrutiny. Compliance with applicable and new laws and regulations is resource-
intensive, and may materially increase our operating costs. Moreover, these regulations intend to protect
our customers, markets and society as a whole and can limit or redirect our activities, among others,
through stricter net capital, market conduct and transparency requirements and restrictions on the
businesses in which we can operate or invest.
Our revenues and profitability and those of our industry have been and will continue to be impacted by
requirements relating to capital, additional loss-absorbing capacity, leverage, minimum liquidity and long-
term funding levels, requirements related to resolution and recovery planning, derivatives clearing and
margin rules and levels of regulatory oversight, as well as limitations on which and, if permitted, how certain
business activities may be carried out by financial institutions.
We are subject to additional legal and regulatory risk in certain countries where we
operate with less developed or predictable legal and regulatory frameworks.
In certain countries in which we operate or where our clients reside, judiciary and dispute resolution systems
may be less effective. As a result, in case of a breach of contract, we may have difficulties in making and
enforcing claims against contractual counterparties and, if claims are made against us, we might encounter
difficulties in mounting a defence against such allegations. If we become party to legal proceedings in a
market with an insufficiently developed judicial system, it could have an adverse effect on our operations
and net results.
In addition, as a result of our operations in certain countries, we are subject to risks of possible
nationalisation, expropriation, price controls, exchange controls and other restrictive government actions, as
well as the outbreak of hostilities and/or war, in these markets. In particular, we have wholesale banking
activities in both Russia and Ukraine, as well as investments in Russia, some of which are denominated in
local currency. Furthermore, the current economic environment in certain countries in which we operate
may increase the likelihood for regulatory initiatives to enhance consumer protection or to protect
homeowners from foreclosures. Any such regulatory initiative could have an adverse impact on our ability
to protect our economic interest, for instance in the event of defaults on residential mortgages.
We are subject to the regulatory supervision of the ECB and other regulators with
extensive supervisory and investigatory powers.
In its capacity as principal prudential supervisor in the EU, the ECB has extensive supervisory and
investigatory powers, including the ability to issue requests for information, to conduct regulatory
investigations and on-site inspections, and to impose monetary and other sanctions. For example, under the
Single Supervisory Mechanism (SSM), the relevant (national) competent authorities, including the ECB, may
conduct stress tests and have discretion to impose capital surcharges on financial institutions for risks that
are not otherwise recognised in risk-weighted assets or other surcharges depending on the individual
situation of the bank, and take or require other measures, such as restrictions on or changes to the Group’s
business. Competent authorities may also prohibit the Group from making dividend payments to
shareholders or distributions to holders of its regulatory capital instruments if the Group fails to comply with
regulatory requirements, in particular with supervisory actions, minimum capital requirements (including
buffer requirements) or with liquidity requirements, or if there are shortcomings in its governance and risk
management processes. A failure to comply with prudential or conduct regulations could have a material
adverse effect on the Group’s business, results and financial condition.
Failure to meet minimum capital and other prudential regulatory requirements as
applicable to us from time to time may have a material adverse effect on our business,
results and financial condition and on our ability to make payments on certain of our
securities.

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> Risk factors
ING Bank Annual Report 2023 254
ING is subject to a variety of regulations that require us to comply with minimum requirements for capital
(own funds) and additional loss-absorbing capacity, as well as for liquidity, and to comply with leverage
restrictions. In addition, such capital, liquidity and leverage requirements and their application and
interpretation may change. Any changes may require us to maintain more capital or to raise a different
type of capital by disqualifying existing capital instruments from continued inclusion in regulatory capital,
requiring replacement with new capital instruments that meet the new criteria. Sometimes changes are
introduced subject to a transitional period during which the new requirements are being phased in,
gradually progressing to a fully phased-in, or fully-loaded, application of the requirements.
Any failure to comply with these requirements, or to adapt to changes in such requirements, may have a
material adverse effect on our business, results and financial condition, and may require us to seek
additional capital. Failures to meet minimum capital or other prudential requirements may also result in ING
being prohibited from making payments on certain of our securities. Because implementation phases and
transposition into EU or national regulation where required may often involve a lengthy period, the impact
of changes in capital, liquidity and leverage regulations on our business, results and financial condition, and
on our ability to make payments on certain of our securities, is often unclear.
Our US commodities and derivatives business is subject to CFTC and SEC regulation
under the Dodd-Frank Act.
Our affiliate ING Capital Markets LLC is registered with the Commodity Futures Trading Commission (CFTC) as
a swap dealer and is subject to CFTC regulation of the off-exchange derivatives market pursuant to Title VII
of the US Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Operating as a swap
dealer requires compliance with CFTC regulatory requirements, which may be burdensome, impose
additional compliance costs and could adversely affect the profitability of this business, as well as exposing
ING to the risk of non-compliance with these regulations.
ING Capital Markets LLC is also registered with the SEC as a security-based swap dealer. Operating as a
security-based swap dealer requires compliance with SEC regulatory requirements, which may be
burdensome, impose additional compliance costs and could adversely affect the profitability of this
business, as well as exposing ING to the risk of non-compliance with these regulations. While most of these
SEC requirements apply to ING Capital Markets LLC, in addition to its CFTC swap dealer requirements, SEC
rules have permitted an Alternative Compliance Mechanism that allows for compliance, subject to eligibility
requirements, with CFTC capital and margin rules applying to swap dealers in lieu of SEC capital and margin
rules applying to security-based swap dealers. ING Capital Markets LLC has elected to use the Alternative
Compliance Mechanism. However, should ING Capital Markets LLC in the future be ineligible for the
Alternative Compliance Mechanism it would be subject to SEC security-based swap dealer rules for margin,
capital, and related financial reporting instead of the CFTC swap dealer rules which could be more capital-
intensive.
On 15 December 2021, the SEC proposed new rules that would for the first time impose public reporting
requirements for some significant security-based swaps positions. The rules would apply even to trades
between non-US counterparties, including ING Bank, provided that the issuer of the reference securities
underlying the security-based swaps is organised in the US, the issuer of the reference securities underlying
the security-based swaps has its principal place of business in the US, or the securities are in certain
categories registered with the SEC.
These proposed regulations, if adopted in their current form, could constrain trading activity in security-
based swaps. In addition, there are, or may be in the future, regulatory requirements or limitations related
to other categories of equity derivatives, such as options or forwards, that could similarly constrain trading
activity in such instruments as well. These various requirements and limitations with respect to equity
derivatives generally could have a significant impact on the liquidity and utility of these markets, materially
impacting ING’s business in this market.
In addition, position limits requirements have been imposed by the CFTC for enumerated listed futures
referencing twenty-five physical commodities. In addition, on 1 January 2023, these position limits were
extended to certain positions in swaps that are “economically equivalent” to the enumerated futures
contracts. The position limits on futures and related swaps could limit ING’s position sizes in these swaps
referencing specified physical commodities and similarly limit the ability of counterparties to utilise certain
of our products, to the extent that hedging exemptions from the position limits are unavailable. Any of the
foregoing factors, and any further regulatory developments with respect to commodities and derivatives,
could have a material impact on our business, results and financial condition.
We are subject to several other bank recovery and resolution regimes that include
statutory write-down and conversion as well as other powers, which remains subject to
significant uncertainties as to scope and impact on us.
We are subject to several recovery and resolution regimes, including the Single Resolution Mechanism (SRM),
the ‘Bank Recovery and Resolution Directive’ (BRRD) as implemented in national legislation, such as the
Dutch Financial Supervision Act. The SRM applies to banks that are supervised by the ECB under the SSM,
with the aim of ensuring an orderly resolution of failing banks at minimum cost for taxpayers and the real
economy. The BRRD establishes a common framework for the recovery and resolution of banks within the
European Union, with the aim of providing supervisory authorities and resolution authorities with common
tools and powers to address banking crises pre-emptively to safeguard financial stability and minimise
taxpayers’ exposure to losses. Any application of statutory write-down and conversion or other powers
would not be expected to constitute an event of default under our securities entitling holders to seek
repayment. If any of these powers were to be exercised in respect of ING, there could be a material adverse
effect on both ING and on holders of ING securities, including through a material adverse effect on credit
ratings and/or the price of our securities. Investors in our securities may lose their investment if resolution
measures are taken under current or future regimes.

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> Risk factors
ING Bank Annual Report 2023 255
Risks related to litigation, enforcement proceedings and investigations and to changes
in tax laws
We may be subject to litigation, enforcement proceedings, investigations or other
regulatory actions, and adverse publicity.
We are involved in governmental, regulatory, arbitration and legal proceedings and investigations involving
claims by and against us which arise in the ordinary course of our businesses, including in connection with
our activities as financial services provider, employer, investor and taxpayer. As a financial institution, we
are subject to specific laws and regulations governing financial services and/or financial institutions. See
'Risks related to the regulation and supervision of the Group. Changes in laws and/or regulations governing
financial services or financial institutions or the application of such laws and/or regulations may increase our
operating costs and limit our activities' and 'Our US commodities and derivatives business is subject to CFTC
and SEC regulation under the Dodd-Frank Act' above. Financial reporting irregularities involving other large
and well-known companies, possible findings of government authorities in various jurisdictions which are
investigating several processes, notifications made by whistleblowers, increasing regulatory and law
enforcement scrutiny of ‘know your customer’ anti-money laundering regulations, tax evasion, prohibited
transactions with countries or persons subject to sanctions, and bribery or other anti-corruption measures
and anti-terrorist-financing procedures and their effectiveness, regulatory investigations of the banking
industry, and litigation that arises from the failure or perceived failure by us to comply with legal,
regulatory, tax and compliance requirements could result in adverse publicity and reputational harm, lead
to increased regulatory supervision, affect our ability to attract and retain customers and employees and
maintain access to the capital markets, result in cease and desist orders, claims, enforcement actions, fines
and civil and criminal penalties, other disciplinary action or have other material adverse effects on us in
ways that are not predictable. With respect to sanctions, Russia’s invasion of Ukraine has fundamentally
changed the global political landscape, resulting in a world-wide response, whereby new and significant
sanctions packages were imposed against Russia and Belarus during 2022 and 2023. During 2023, there
have been several noteworthy developments highlighting the increasing focus of the EU, US, and other
governments on the potential circumvention of sanctions against Russia, and the roles of third countries
and companies in facilitating the circumvention or undermining of such sanction’s measures. This has
prompted a concerted effort by governments to impose pressure on companies operating in these
jurisdictions, and to stop the sanctions measures from being sidestepped by targeted Russian parties. The
EU introduced additional measures combating sanctions circumvention and several locations have come
into focus as potential diversion hubs. While various sanctions include grace periods before full compliance
is required, there is no guarantee that ING will be able to implement all required procedures within the
applicable grace periods. In addition, some claims and allegations may be brought by or on behalf of a class
and claimants may seek large or indeterminate amounts of damages, including compensatory, liquidated,
treble and punitive damages. Our reserves for litigation liabilities may prove to be inadequate. Claims and
allegations, should they become public, need not be well founded, true or successful to have a negative
impact on our reputation. In addition, press reports and other public statements that assert some form of
wrongdoing could result in inquiries or investigations by regulators, legislators and law enforcement
officials, and responding to these inquiries and investigations, regardless of their ultimate outcome, is time
consuming and expensive. Adverse publicity, claims and allegations, litigation and regulatory investigations
and sanctions may have a material adverse effect on our business, results, financial condition and/or
prospects in any given period.
We are subject to different tax regulations in each of the jurisdictions where we
conduct business, and are exposed to changes in tax laws, and risks of non-compliance
with or proceedings or investigations with respect to, tax laws.
Changes in tax laws (including case law) and tax treaties (including the termination thereof) could increase
our taxes and our effective tax rates and could materially impact our tax receivables and liabilities as well as
deferred tax assets and deferred tax liabilities, which could have a material adverse effect on our business,
results and financial condition. Changes in tax laws could also make certain ING products less attractive,
which could have adverse consequences for our businesses and results. On 7 June 2021, the Dutch
government received a formal notice of termination of the Dutch-Russian tax treaty from Russia, and as a
result, the tax treaty was terminated as of 1 January 2022. The termination of the Dutch-Russian tax treaty
or any other similar developments may have adverse effects on ING and ING’s customers.
Because of the geographic spread of its business, ING may be subject to tax audits, investigations and
procedures in numerous jurisdictions at any point in time. Although we believe that we have adequately
provided for all our tax positions, the ultimate resolution of these audits, investigations and procedures may
result in liabilities which are different from the amounts recognized. In addition, increased bank taxes in
countries where the Group is active result in increased taxes on ING’s banking operations, which could
negatively impact our operations, financial condition and liquidity.
We may be subject to tax investigations under EU, US and local laws if we fail to comply
with our obligations
Due to the nature of its business, ING is subject to various provisions of EU, US, and other local tax laws in
relation to its customers. These include amongst others the Foreign Account Tax Compliance Act (“FATCA”),
which requires ING to provide certain information for the US Internal Revenue Service (IRS), the Qualified
Intermediary (QI) requirements, which require withholding tax on certain US-source payments, and the
Common Reporting Standards (CRS) which requires ING to provide certain information to local tax
authorities. Failure to comply with these requirements and regulations could harm our reputation and could
subject the Group to enforcement actions, fines and penalties, which could have a material adverse effect
on our business, reputation, revenues, results, financial condition and prospects.
ING is exposed to the risk of claims from customers or stakeholders who feel misled or
treated unfairly because of advice or information received.

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ING Bank Annual Report 2023 256
Our products and services, including banking products and advice services for third-party products are
exposed to claims from customers who might allege that they have received insufficient advice or
misleading information from advisers (both internal and external) as to which products were most
appropriate for them, or that the terms and conditions of the products, the nature of the products or the
circumstances under which the products were sold, were misrepresented to them. When new financial
products are brought to the market, it is ING’s policy to engage in a multidisciplinary product approval
process in connection with the development and distribution of such products, including production of
appropriate marketing and communication materials. Notwithstanding these processes, customers may
make claims against ING if the products do not meet their expectations , either at the purchase/execution of
the product and/or through the life of the product. Customer protection regulations, as well as changes in
interpretation and perception by both the public at large and governmental authorities of acceptable
market practices, influence customer expectations
Products distributed through person-to-person sales forces have a higher exposure to such claims as the
sales forces may provide face-to-face financial planning and advisory services. Complaints may also arise if
customers feel that they have not been treated reasonably or fairly, or that the duty of care has not been
complied with. While a considerable amount of time and resources have been invested in reviewing and
assessing historical sales practices and products that were sold in the past, and in the maintenance of risk
management, legal and compliance procedures to monitor current sales practices, there can be no
assurance that all of the issues associated with current and historical sales practices have been or will be
identified, nor that any issues already identified will not be more widespread than presently estimated.
The negative publicity associated with any sales practices, any compensation payable in respect of any
such issues and regulatory changes resulting from such issues, has had and could have a material adverse
effect on our reputation, business, results, financial condition and prospects. For additional information
regarding legal proceedings or claims, see Note 45 ‘Legal proceedings’ to the consolidated financial
statements.
Risks related to the Group’s business and operations
ING may be unable to meet internal or external aims or expectations or requirements
with respect to ESG-related matters.
Environmental, Social and Governance (ESG) is an area of significant and increased focus for governments
and regulators, investors, ING’s customers and employees, and other stakeholders or third parties (e.g., non-
governmental organisations or NGOs). As a result, an increasing number of laws, regulations and legislative
actions have been introduced to address climate change, sustainability and other ESG-related matters,
including in relation to the financial sector’s operations and strategy. Such recent regulations include the EU
Sustainable Finance Disclosure Regulation (SFDR), EU Taxonomy regulation and EU Green Bond Standards,
which broadly focus on disclosure obligations, standardized definitions and classification frameworks for
environmentally sustainable activities, and the EU Corporate Sustainability Reporting Directive (CSRD), which
requires certain companies, including us, to disclose information on what they see as the risks and
opportunities arising from social and environmental issues, and on the impact of their activities on people
and the environment. Third parties may pursue litigation against ING in connection with ESG-related
matters, such as the recently announced potential claims by Friends of the Earth Netherlands
(Milieudefensie) in connection with financing provided by ING to certain companies whose business is reliant
on fossil fuels.
These laws, regulations and legislative frameworks may directly and indirectly impact the business
environment in which ING operates and may expose ING to significant risks, including amongst others,
greenwashing risk and the risk of litigation if governmental standards or community expectations are not
met.
National or international regulatory actions or developments may also result in financial institutions coming
under increased pressure from internal and external stakeholders regarding the management and
disclosure of their ESG risks and related lending and investment activities. ING may from time to time
disclose ESG-related initiatives or aims in connection with the conduct of its business and operations.
However, there is no guarantee that ING will be able to implement such initiatives or meet such aims within
anticipated timeframes, or at all. ING may fail to fulfil internal or external ESG-related initiatives, aims or
expectations, or may be perceived to fail to do so, or may fail to adequately or accurately report
performance or developments with respect to such initiatives, aims or expectations. ING could therefore be
criticised or held responsible for the scope of its initiatives or goals regarding such matters. In addition, ING
might face requests for specific strategies, plans or commitments to address ESG-related matters, which
may or may not be viewed as satisfactory to the relevant internal and external stakeholders (including
NGOs). Any of these factors may have an adverse impact on ING’s reputation and brand value, or on ING’s
business, financial condition and operating results.
ING may be unable to adapt its products and services to meet changing customer
behaviour and demand, including as a result of ESG-related matters.
Customers or other counterparties may increasingly assess sustainability or other ESG-related matters in
their economic decisions. For instance, customers may choose investment products or services based on
sustainability or other ESG criteria, or may look at a financial institution’s ESG-related lending strategy when
choosing to make deposits. To remain competitive and to safeguard its reputation, ING is required to
continuously adapt its business strategy, products and services to respond to emerging, increasing or
changing sustainability and other ESG-related demands from customers, investors and other stakeholders.
However, there is no guarantee that ING’s current or future products or services will meet applicable ESG-
related regulatory requirements, customer preferences or investor expectations.
ING’s business and operations are exposed to transition risks related to climate change.

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> Risk factors
ING Bank Annual Report 2023 257
The transition to a low-carbon or net-zero economy gives rise to risks and uncertainties associated with
climate change-related laws, regulations and oversight, changing or new technologies, and shifting
customer sentiment. For instance, ING may be required to change its lending portfolio to comply with new
climate change-related regulations and other ESG-related demands from customers, investors and other
stakeholders. As a result, it might be unable and unwilling to lend to certain prospective customers, or lead
to the termination of certain existing relationships with certain customers. This could result in claims or legal
challenges from such customers against ING. This transition may also adversely impact the business and
operations of ING’s customers and other counterparties. Further, there is a risk that changing community
standards and market expectations could lead to a reduction in demand and a decline in valuations for
certain assets, which may affect the value of collateral we hold or the financial strength of certain of our
portfolios. If ING fails to adequately factor in such risks in its lending or other business decisions, ING could
be exposed to losses.
The low carbon or net zero transition may also require ING to modify or implement new compliance
systems, internal controls and procedures or governance frameworks. The integration and automation of
internal governance, compliance, and disclosure and reporting frameworks across ING could lead to
increased operational costs for ING and other execution and operational risks. The implementation cost of
these systems may especially be higher in the near term as ING seeks to adapt its business, or address
overlapping, duplicative or conflicting regulatory or other requirements in this fast-developing area.
Furthermore, ING’s ongoing implementation of appropriate systems, controls and frameworks increasingly
requires ING to develop adequate climate change-related risk assessment and modelling capabilities (as
there is currently no standard approach or methodology available), and to collect customer, third party or
other data. There are significant risks and uncertainties inherent in the development of new risk modelling
methodologies and the collection of data, potentially resulting in systems or frameworks that could be
inadequate, inaccurate or susceptible to incorrect customer, third party or other data.
Any delay or failure in developing, implementing or meeting ING’s climate change-related commitments
and regulatory requirements may have a material adverse impact on our business, financial condition,
operating results and reputation, and lead to climate change or ESG-related investigations, enforcement
proceedings or litigation.
ING’s business and operations are exposed to physical risks, including as a direct result
of climate change.
ING’s business and operations may be exposed to the impacts of physical risks arising from climate and
weather-related events, including heatwaves, droughts, flooding, storms, rising sea levels, other extreme
weather events or natural disasters, and to the impacts of physical risks arising from the environmental
degradation, including loss of biodiversity, water or resources scarcity, pollution or waste management.
Such physical risks could disrupt ING’s business continuity and operations or impact ING’s premises or
property portfolio, as well as its customers’ property, business or other financial interests. These risks could
potentially result in impairing asset values, financial losses, declining creditworthiness of customers and
increased defaults, delinquencies, write-offs and impairment charges in ING’s portfolio, etc. In particular,
changing climate patterns resulting in more frequent and extreme weather events, such as the severe
flooding that occurred in Western Europe in July 2021, the long-lasting bushfires in Australia in February
2021 or the severe flooding in the eastern states of Australia in early 2022, could lead to unexpected
business interruptions or losses for ING or its customers.
For a description of physical risks to our operations and business other than resulting from natural disasters
as a result of climate change, see 'Operational and IT risks, such as systems disruptions or failures, breaches
of security, cyber attacks, human error, changes in operational practices, inadequate controls including in
respect of third parties with which we do business or outbreaks of communicable diseases may adversely
impact our reputation, business and results' below.
Operational and IT risks, such as systems disruptions or failures, breaches of security,
human error, changes in operational practices, inadequate controls including in respect
of third parties with which we do business or outbreaks of communicable diseases may
adversely impact our reputation, business and results.
Operational and IT risks are inherent to our business. Our clients depend on our ability to process and report
a large number of transactions efficiently and accurately. In addition, we routinely transmit, receive and
store personal, confidential and proprietary information electronically. Losses can result from inadequately
trained or skilled personnel, IT failures (including due to a cyber attack), inadequate or failed internal control
processes and systems (including, as the role of Artificial Intelligence in the finance industry and in our
business increases, any errors as a result of incomplete, inaccurate, or otherwise flawed outputs from the
algorithms and data sets utilized), regulatory breaches, human errors, employee misconduct, including
fraud, or from natural disasters or other external events that interrupt normal business operations. Such
losses may adversely affect our reputation, business and results.
We depend on the secure processing, storage and transmission of confidential and other information in our
computer systems and networks. The equipment and software used in our computer systems and networks
may not always be capable of processing, storing or transmitting information as expected. Despite our
business continuity plans and procedures, certain of our computer systems and networks may have
insufficient recovery capabilities in the event of a malfunction or loss of data. We are consistently managing
and monitoring our IT risk profile globally. ING is subject to increasing regulatory requirements including EU
General Data Protection Regulation (GDPR) and EU Payment Services Directive (PSD2) and the new Digital
Operational Resilience Act (DORA) which will enter into force in January 2025. Failure to appropriately
manage and monitor our IT risk profile could affect our ability to comply with these regulatory
requirements, to securely and efficiently serve our clients or to timely, completely or accurately process,
store and transmit information, and may adversely impact our reputation, business and results. For further
description of the particular risks associated with cybercrime, which is a specific risk to ING as a result of its

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> Risk factors
ING Bank Annual Report 2023 258
strategic focus on technology and innovation, see 'We are subject to increasing risks related to cybercrime
and compliance with cybersecurity regulation' below.
In addition, as finance industry participants are increasingly incorporating Artificial Intelligence into their
processes and systems, the risk of data and information leaks is correspondingly increasing. Our or our
customers’ sensitive, proprietary, or confidential information could be leaked, disclosed, or revealed as a
result of or in connection with our or our third-party providers’ use of generative or other Artifical
Intelligence technologies. Any such information that we input into a third-party generative or other Artificial
Intelligence or machine learning platform could be revealed to others, including if information is used to
train the third party's Artificial Intelligence models. Additionally, where an Artificial Intelligence model
ingests personal information and makes connections using such data, those technologies may reveal other
sensitive, proprietary, or confidential information generated by the model.
Widespread outbreaks of communicable diseases may impact the health of our employees, increasing
absenteeism, or may cause a significant increase in the utilisation of health benefits offered to our
employees, either or both of which could adversely impact our business. Further, as a result of the Covid-19
pandemic, a significant portion of our staff continue to work from home on a full- or part-time basis, which
may raise operational risks, including with respect to information security, data protection, availability of
key systems and infrastructure integrity. In addition, other events including unforeseeable and/or
catastrophic events can lead to an abrupt interruption of activities, and our operations may be subject to
losses resulting from such disruptions. Losses can result from destruction or impairment of property,
financial assets, trading positions, and the loss of key personnel. If our business continuity plans are not able
to be implemented, are not effective or do not sufficiently take such events into account, losses may
increase further.
We are subject to increasing risks related to cybercrime and compliance with
cybersecurity regulation.
Like other financial institutions and global companies, we are regularly the target of cyber attacks, which is
a specific risk to ING as a result of its strategic focus on technology and innovation. In particular, threats
from Distributed Denial of Service (DDoS), targeted attacks (also called Advanced Persistent Threats) and
ransomware have intensified worldwide, and attempts to gain unauthorised access and the sophistication
of techniques used for such attacks is increasing. Cyber threats are constantly evolving and the techniques
used in these attacks change, develop and evolve rapidly, including the use of emerging technologies, such
as advanced forms of Artificial Intelligence and quantum computing. The new cyber risks introduced by
these changes in technology require us to devote significant attention to identification, assessment and
analysis of the risks and implementation of corresponding preventative measures. We have faced, and
expect to continue to face, an increasing number of cyber attacks (both successful and unsuccessful) as we
have further digitalised. This includes the continuing expansion of our mobile- and other internet-based
products and services, as well as our usage and reliance on cloud technology.
Cybersecurity, the use and safeguarding of customer data and data privacy have become the subject of
increasing legislative and regulatory focus. The EU’s second Payment Services Directive (PSD2), GDPR and
DORA are examples of such regulations. The resilience of financial institutions against ransomware attacks
is now subject of the yearly stress test executed by the ECB in 2024. In certain locations where ING is active,
there are additional local regulatory requirements and legislation on top of EU regulations that must be
followed for business conducted in that jurisdiction. Some of these legislations and regulations may be
conflicting due to local regulatory interpretations. We may become subject to new EU and local legislation
or regulation concerning cybersecurity, security of customer data in general or the privacy of information
we may store or maintain. Compliance with such new legislation or regulation could increase the Group’s
compliance cost. Failure to comply with new and existing legislation or regulation could harm our reputation
and could subject the Group to enforcement actions, fines and penalties.
ING may be exposed to the risks of misappropriation, unauthorised access, computer viruses or other
malicious code, cyber attacks and other external attacks or internal breaches for purposes of
misappropriating assets or sensitive information, corrupting data, or impairing operational performance,
each of which could have a security impact. These events could also jeopardise our confidential information
or that of our clients or our counterparties. These events can potentially result in financial loss and harm to
our reputation, hinder our operational effectiveness, result in regulatory censure, compensation costs or
fines resulting from regulatory investigations and could have a material adverse effect on our business,
reputation, revenues, results, financial condition and prospects. Even when we are successful in defending
against cyber attacks, such defence may consume significant resources or impose significant additional
costs on ING.
Although the Covid-19 pandemic has now largely subsided, there has been an increase in the digital
behaviour of our customers leading to reduced traffic in branches. Over 95 percent of our customers now
interact with us via digital channels only. This increased reliance on digital banking and remote working may
increase the risk of cybersecurity breaches, loss of personal data and related reputational risk. If any of
these risks were to materialise that may adversely affect our business, results and financial condition.
Because we operate in highly competitive markets, including our home market, we may
not be able to increase or maintain our market share, which may have an adverse
effect on our results.
There is substantial competition in the Netherlands and the other countries in which we do business for the
types of wholesale banking, retail banking, investment banking and other products and services we provide.
Customer loyalty and retention can be influenced by several factors, including brand recognition,
reputation, relative service levels, the prices and attributes of products and services, scope of distribution,
credit ratings and actions taken by existing or new competitors (including non-bank or financial technology
competitors). A decline in our competitive position as to one or more of these factors could adversely
impact our ability to maintain or further increase our market share, which would adversely affect our
results. Such competition is most pronounced in our more mature markets of the Netherlands, Belgium, the

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ING Bank Annual Report 2023 259
rest of Western Europe and Australia. In recent years, however, competition in emerging markets, such as
Asia and Central and Eastern Europe, has also increased as large financial services companies from more
developed countries have sought to establish themselves in markets which are perceived to offer higher
growth potential, and as local institutions have become more sophisticated and competitive and proceeded
to form alliances, mergers or strategic relationships with some of our competitors. The Netherlands is our
largest market. Our main competitors in the banking sector in the Netherlands are ABN AMRO Bank and
Rabobank.
Competition could also increase due to new entrants (including non-bank and financial technology
competitors) in the markets that may have new operating models that are not burdened by potentially
costly legacy operations and that are subject to reduced regulation. New entrants may rely on new
technologies, advanced data and analytic tools, lower cost to serve, less extensive oversight from regulators
compared to the frameworks established in respect of traditional banks and/or faster processes to challenge
traditional banks. Developments in technology have also accelerated the use of new business models, and
ING may not be successful in adapting to this pace of change or may incur significant costs in adapting its
business and operations to meet such changes. For example, new business models have been observed in
retail payments, consumer and commercial lending (such as peer-to-peer lending), foreign exchange and
low-cost investment advisory services. In particular, the emergence of disintermediation in the financial
sector resulting from new banking, lending and payment solutions offered by rapidly evolving incumbents,
challengers and new entrants, in particular with respect to payment services and products, and the
introduction of disruptive technology may impede our ability to grow or retain our market share and impact
our revenues and profitability.
Increasing competition in the markets in which we operate (including from non-banks and financial
technology competitors) may significantly impact our results if we are unable to match the products and
services offered by our competitors. Future economic turmoil may accelerate additional consolidation
activity. Over time, certain sectors of the financial services industry have become more concentrated, as
institutions involved in a broad range of financial services have been acquired by or merged into other firms
or have declared bankruptcy. These developments could result in our competitors gaining greater access to
capital and liquidity, expanding their ranges of products and services, or gaining geographic diversity. We
may experience pricing pressures as a result of these factors in the event that some of our competitors seek
to increase market share by reducing prices, which may have a material adverse impact on our business,
results and financial condition.
We may not always be able to protect our intellectual property developed in our
products and services and may be subject to infringement claims, which could
adversely impact our core business, inhibit efforts to monetize our internal innovations
and restrict our ability to capitalize on future opportunities.
In the conduct of our business, we rely on a combination of contractual rights with third parties and
copyright, trademark, trade name, patent and trade secret laws to establish and protect our intellectual
property, which we develop in connection with our products and services. Third parties may infringe or
misappropriate our intellectual property. We may have to litigate to enforce and protect our copyrights,
trademarks, trade names, patents, trade secrets and know-how or to determine their scope, validity or
enforceability. In that event, we may be required to incur significant costs, and our efforts may not prove
successful. The inability to secure or protect our intellectual property assets could have an adverse effect on
our core business and our ability to compete, including through the monetisation of our internal
innovations.
We may also be subject to claims made by third parties for (i) patent, trademark or copyright infringement,
(ii) breach of copyright, trademark or licence usage rights, or (iii) misappropriation of trade secrets. Any such
claims and any resulting litigation could result in significant expense and liability for damages. If we were
found to have infringed or misappropriated a third-party patent or other intellectual property right
(including where we or a third party have used generative Artificial Intelligence outputs based on data for
which the generative model may not have had consent), we could in some circumstances be enjoined from
providing certain products or services to our customers or from utilising and benefiting from certain
methods, processes, copyrights, trademarks, trade secrets or licences. Alternatively, we could be required to
enter into costly licensing arrangements with third parties or to implement a costly workaround. Any of
these scenarios could have a material adverse effect on our business and results and could restrict our
ability to pursue future business opportunities.
The inability of counterparties to meet their financial obligations or our inability to fully
enforce our rights against counterparties could have a material adverse effect on our
results.
Third parties that have an payment obligations to ING, or obligations to return money, securities or other
assets, may not pay or perform under their obligations. These parties include the issuers and guarantors
(including sovereigns) of securities we hold, borrowers under loans originated, reinsurers, customers, trading
counterparties, securities lending and repurchase counterparties, counterparties under swaps, credit default
and other derivative contracts, clearing agents, exchanges, clearing houses and other financial
intermediaries. Defaults by one or more of these parties on their obligations to us due to bankruptcy, lack of
liquidity, downturns in the economy or real estate values, continuing low oil or other commodity prices,
operational failure or other factors, or even rumours about potential defaults by one or more of these
parties or regarding a severe distress of the financial services industry generally, could have a material
adverse effect on our results, financial condition and liquidity. Given the high level of interdependence
between financial institutions, we are and will continue to be subject to the risk of deterioration of the
commercial and financial soundness, or perceived soundness, of sovereigns and other financial services
institutions. This is particularly relevant to our franchise as an important and large counterparty in equity,
fixed income and foreign exchange markets, including related derivatives.

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ING Bank Annual Report 2023 260
We routinely execute a high volume of transactions, such as unsecured debt instruments, derivative
transactions and equity investments with counterparties and customers in the financial services industry,
including brokers and dealers, commercial and investment banks, mutual and hedge funds, insurance
companies, institutional clients, futures clearing merchants, swap dealers, and other institutions, resulting in
large periodic settlement amounts, which may result in us having significant credit exposure to one or more
of such counterparties or customers. As a result, we could face concentration risk with respect to liabilities or
amounts we expect to collect from specific counterparties and customers. We are exposed to increased
counterparty risk as a result of recent financial institution failures and weakness and will continue to be
exposed to the risk of loss if counterparty financial institutions fail or are otherwise unable to meet their
obligations. As a result of the Russian invasion of Ukraine and related international response measures,
including sanctions and capital controls, we may be exposed to increased risk of default of counterparties
located in Russia and Ukraine, counterparties of which the ultimate parent is located in Russia or may be
considered effectively controlled or influenced through Russian involvement, and other counterparties in
sectors affected by the response measures. Also, liquidity or currency controls enforced by the Russian
central bank may impact Russian companies’ ability to pay. In addition, we have counterparty exposure to
Russian entities in connection with foreign exchange derivatives for future receipt of foreign currencies
against Russian rouble (RUB). Remaining at risk for ING at year-end 2023 is €0.4 billion local equity and €1.3
billion credit exposures booked outside of Russia, and €0.6 billion with clients in Ukraine. A default by, or
even concerns about the creditworthiness of, one or more of these counterparties or customers or other
financial services institutions could therefore have an adverse effect on our results or liquidity.
With respect to secured transactions, our credit risk may be exacerbated when the collateral held by us
cannot be liquidated or is liquidated at prices not sufficient to recover the full amount of the loan or
derivative exposure due to us. We also have exposure to a number of financial institutions in the form of
unsecured debt instruments, derivative transactions and equity investments. For example, we hold certain
hybrid regulatory capital instruments issued by financial institutions which permit the issuer to cancel
coupon payments on the occurrence of certain events or at their option. The ECB has indicated that, in
certain circumstances, it may require these financial institutions to cancel payment. If this were to happen,
we expect that such instruments may experience ratings downgrades and/or a drop in value and we may
have to treat them as impaired, which could result in significant losses. There is no assurance that losses on,
or impairments to the carrying value of, these assets would not materially and adversely affect our
business, results or financial condition.
In addition, we are subject to the risk that our rights against third parties may not be enforceable in all
circumstances. The deterioration or perceived deterioration in the credit quality of third parties whose
securities or obligations we hold could result in losses and/ or adversely affect our ability to rehypothecate
or otherwise use those securities or obligations for liquidity purposes. A significant downgrade in the credit
ratings of our counterparties could also have a negative impact on our income and risk weighting, leading to
increased capital requirements. While in many cases we are permitted to require additional collateral from
counterparties that experience financial difficulty, disputes may arise as to the amount of collateral we are
entitled to receive and the value of pledged assets. Also in this case, our credit risk may also be exacerbated
when the collateral we hold cannot be liquidated at prices sufficient to recover the full amount of the loan or
derivative exposure due to us, which is most likely to occur during periods of illiquidity and depressed asset
valuations, such as those experienced during the financial crisis of 2008. The termination of contracts and
the foreclosure on collateral may subject us to claims. Bankruptcies, downgrades and disputes with
counterparties as to the valuation of collateral tend to increase in times of market stress and illiquidity. Any
of these developments or losses could materially and adversely affect our business, results, financial
condition, and/or prospects.
Ratings are important to our business for a number of reasons, and a downgrade or a
potential downgrade in our credit ratings could have an adverse impact on our results
and net results.
Credit ratings represent the opinions of rating agencies regarding an entity’s ability to repay its
indebtedness. Our credit ratings are important to our ability to raise capital and funding through the
issuance of debt and to the cost of such financing. In the event of a downgrade, the cost of issuing debt will
increase, having an adverse effect on our net results. Certain institutional investors may also be obliged to
withdraw their deposits from ING following a downgrade, which could have an adverse effect on our
liquidity. They can also have lower risk appetite for our debt notes, leading to lower purchases of (newly
issued) debt notes. We have credit ratings from S&P, Moody’s Investor Service and Fitch Ratings. Each of the
rating agencies reviews its ratings and rating methodologies on a recurring basis and may decide on a
downgrade at any time.
As rating agencies continue to evaluate the financial services industry, it is possible that rating agencies will
heighten the level of scrutiny that they apply to financial institutions, increase the frequency and scope of
their credit reviews, request additional information from the companies that they rate and potentially
adjust upward the capital and other requirements employed in the rating agency models for maintenance
of certain ratings levels. It is possible that the outcome of any such review of us would have additional
adverse ratings consequences, which could have a material adverse effect on our results and financial
condition. We may need to take actions in response to changing standards or capital requirements set by
any of the rating agencies, which could cause our business and operations to suffer. We cannot predict
what additional actions rating agencies may take, or what actions we may take in response to the actions
of rating agencies.
Furthermore, ING’s assets are risk-weighted. Downgrades of these assets could result in a higher risk-
weighting, which may result in higher capital requirements. This may impact net earnings and the return on
capital, and may have an adverse impact on our competitive position.
An inability to retain or attract key personnel may affect our business and results.
ING relies to a considerable extent on the quality of its senior management, such as members of the
executive committee, and management in the jurisdictions which are material to ING’s business and

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ING Bank Annual Report 2023 261
operations. The success of ING’s operations is dependent, among other things, on its ability to attract and
retain highly qualified personnel. Competition for key personnel in most countries in which ING operates,
and globally for senior management, is intense. ING’s ability to attract and retain key personnel, in senior
management and in particular areas such as technology and operational management, client relationship
management, finance, risk and product development, is dependent on a number of factors, including
prevailing market conditions and compensation packages offered by companies competing for the same
talent.
The increasing restrictions on, and public and political scrutiny of, remuneration (especially in the
Netherlands), may continue to have an impact on existing ING remuneration policies and individual
remuneration packages for personnel. For example, under the EU’s amended Shareholder Rights Directive,
known as SRD II, which came into effect on 10 June 2019, ING is required to hold a shareholder binding vote
on ING’s Executive Board remuneration policy and Supervisory Board remuneration policy at least every four
years. Furthermore the shareholders have an advisory vote on ING’s remuneration report annually. This
may restrict our ability to offer competitive compensation compared with companies (financial and/or non-
financial) that are not subject to such restrictions and it could adversely affect ING Group’s ability to retain
or attract key personnel, which, in turn, may affect our business and results.
We may incur further liabilities in respect of our defined benefit retirement plans if the
value of plan assets is not sufficient to cover potential obligations, including as a result
of differences between actual results and underlying actuarial assumptions and
models.
ING Group companies operate various defined benefit retirement plans covering the post-employment
benefits of a number of our employees. The liability recognised in our consolidated balance sheet in respect
of our defined benefit plans is the present value of the defined benefit obligations at the balance sheet date,
less the fair value of each plan’s assets, together with adjustments for unrecognised actuarial gains and
losses and unrecognised past service costs. We determine our defined benefit plan obligations based on
internal and external actuarial models and calculations using the projected unit credit method. Inherent in
these actuarial models are assumptions, including discount rates, rates of increase in future salary and
benefit levels, mortality rates and consumer price index. These assumptions are based on available market
data and are updated annually. Nevertheless, the actuarial assumptions may differ significantly from actual
results due to changes in market conditions, economic and mortality trends and other assumptions. Any
changes in these assumptions could have a significant impact on our present and future liabilities and costs
associated with our defined benefit plans.
Risks related to the Group’s risk management practices
Risks relating to our use of quantitative models or assumptions to model client
behaviour for the purposes of our market calculations may adversely impact our
reputation or results.
We use quantitative methods, systems or approaches that apply statistical, economic financial, or
mathematical theories, techniques and assumptions to process input data into quantitative estimates.
Errors in the development, implementation, use or interpretation of such models, or from incomplete or
incorrect data, can lead to inaccurate, noncompliant or misinterpreted model outputs, which may adversely
impact our reputation and results. In addition, we use assumptions in to model client behaviour for the risk
calculations in our banking books. Assumptions are used to determine the interest rate risk profile of savings
and current accounts and to estimate the embedded option risk in the mortgage and investment portfolios.
Assumptions based on past client behaviour may not always be a reliable indicator of future behaviour. The
realisation or use of different assumptions to determine client behaviour could have a material adverse
effect on the calculated risk figures and, ultimately, our future results or reputation. Furthermore, we may
be subject to risks related to changes in the laws and regulations governing the risk management practices
of financial institutions. For further information, see 'Risks related to the regulation and supervision of the
Group – Changes in laws and/or regulations governing financial services or financial institutions or the
application of such laws and/or regulations may increase our operating costs and limit our activities' above.
As noted there, regulation of the industries in which we operates is becoming increasingly more extensive
and complex, while also attracting supervisory scrutiny. Compliance failures may lead to changes in the
laws and regulations governing the risk management practices and materially increase our operating costs.
We may be unable to manage our risks successfully through derivatives.
We employ various economic hedging strategies with the objective of mitigating the market risks that are
inherent in our business and operations. These risks include currency fluctuations, changes in the fair value
of our investments, the impact of interest rates, equity markets and credit spread changes, the occurrence
of credit defaults and changes in client behaviour. We seek to control these risks by, among other things,
entering into a number of derivative instruments, such as swaps, options, futures and forward contracts,
including, from time to time, macro hedges for parts of our business, either directly as a counterparty or as
a credit support provider to affiliate counterparties. Developing an effective strategy for dealing with these
risks is complex, and no strategy can completely insulate us from risks associated with those fluctuations.
Our hedging strategies also rely on assumptions and projections regarding our assets, liabilities, general
market factors and the creditworthiness of our counterparties that may prove to be incorrect or prove to be
inadequate. Accordingly, our hedging activities may not have the desired beneficial impact on our results or
financial condition. Poorly designed strategies or improperly executed transactions could actually increase
our risks and losses. Hedging strategies involve transaction costs and other costs, and if we terminate a
hedging arrangement, we may also be required to pay additional costs, such as transaction fees or
breakage costs. There have been periods in the past, and it is likely that there will be periods in the future,

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ING Bank Annual Report 2023 262
during which we have incurred or may incur losses on transactions, possibly significant, after taking into
account our hedging strategies. Further, the nature and timing of our hedging transactions could actually
increase our risk and losses. Hedging instruments we use to manage product and other risks might not
perform as intended or expected, which could result in higher realised or unrealised losses, such as credit
value adjustment risks or unexpected P&L effects, and unanticipated cash needs to collateralise or settle
such transactions. Adverse market conditions can limit the availability and increase the costs of hedging
instruments, and such costs may not be recovered in the pricing of the underlying products being hedged.
In addition, hedging counterparties may fail to perform their obligations, resulting in unhedged exposures
and losses on positions that are not collateralised. As such, our hedging strategies and the derivatives that
we use or may use may not adequately mitigate or offset the risks they intend to cover, and our hedging
transactions may result in losses.
Our hedging strategy additionally relies on the assumption that hedging counterparties remain able and
willing to provide the hedges required by our strategy. Increased regulation, market shocks, worsening
market conditions, and/or other factors that affect or are perceived to affect the financial condition, liquidity
and creditworthiness of ING may reduce the ability and/or willingness of such counterparties to engage in
hedging contracts with us and/or other parties, affecting our overall ability to hedge our risks and adversely
affecting our business, results and financial condition.
Risks related to the Group’s liquidity and financing activities
We depend on the capital and credit markets, as well as customer deposits, to provide
the liquidity and capital required to fund our operations, and adverse conditions in the
capital and credit markets, or significant withdrawals of customer deposits, may
impact our liquidity, borrowing and capital positions, as well as the cost of liquidity,
borrowings and capital.
Adverse capital market conditions have in the past affected, and may in the future affect, our cost of
borrowed funds and our ability to borrow on a secured and unsecured basis, thereby impacting our ability
to support and/or grow our businesses. Furthermore, although interest rates are still relatively low by
historical standards and have been since the financial crisis in 2008, interest rates are rising and we have
experienced, and may continue to experience, increased funding costs due in part due to the withdrawal of
perceived government support of financial institutions in the event of future financial crises. In addition,
liquidity in the financial markets has also been negatively impacted as market participants and market
practices and structures adjust to new regulations.
We need liquidity to fund new and recurring business, to pay our operating expenses, interest on our debt
and dividends on our capital stock, maintain our securities lending activities and replace certain maturing
liabilities. Without sufficient liquidity, we will be forced to curtail our operations and our business will suffer.
The principal sources of our funding include a variety of short-and long-term instruments, including deposit
fund, repurchase agreements, commercial paper, medium- and long-term debt, subordinated debt
securities, capital securities and shareholders’ equity.
In addition, because we rely on customer deposits to fund our business and operations, the confidence of
customers in financial institutions may be tested in a manner that may adversely impact our liquidity and
capital position. Consumer confidence in financial institutions may, for example, decrease due to our or our
competitors’ failure to communicate to customers the terms of, and the benefits and risks to customers of,
complex or high-fee financial products. Reduced confidence could have an adverse effect on our liquidity
and capital position through withdrawal of deposits, in addition to our revenues and results. Because a
significant percentage of our customer deposit base is originated via internet banking, a loss of customer
confidence may result in a rapid withdrawal of deposits over the internet.
In the event that our current resources do not satisfy our needs, we may need to seek additional financing.
The availability of additional financing will depend on a variety of factors, such as market conditions, the
general availability of credit, the volume of trading activities, the overall availability of credit to the financial
services industry, our credit ratings and credit capacity, as well as the possibility that customers or lenders
could develop a negative perception of our long- or short-term financial prospects. Also see under the
heading 'Ratings are important to our business for a number of reasons, and a downgrade or a potential
downgrade in our credit ratings could have an adverse impact on our results and net results'. Similarly, our
access to funds may be limited if regulatory authorities or rating agencies take negative actions against us.
If our internal sources of liquidity prove to be insufficient, there is a risk that we may not be able to
successfully obtain additional financing on favourable terms, or at all. Any actions we might take to access
financing may, in turn, cause rating agencies to re-evaluate our ratings.
Disruptions, uncertainty or volatility in the capital and credit markets may also limit our access to capital.
Such market conditions may in the future limit our ability to raise additional capital to support business
growth, or to counterbalance the consequences of losses or increased regulatory capital and rating agency
capital requirements. This could force us to (i) delay raising capital, (ii) reduce, cancel or postpone payment
of dividends on our shares, (iii) reduce, cancel or postpone interest payments on our other securities, (iv)
issue capital of different types or under different terms than we would otherwise, or (v) incur a higher cost of
capital than in a more stable market environment. This would have the potential to decrease both our
profitability and our financial flexibility. Our results, financial condition, cash flows, regulatory capital and
rating agency capital position could be materially adversely affected by disruptions in the financial markets.
Furthermore, regulatory liquidity requirements in certain jurisdictions in which we operate are remain
stringent, undermining our efforts to maintain centralised management of our liquidity. These
developments may cause trapped pools of liquidity and capital, resulting in inefficiencies in the cost of
managing our liquidity and solvency, and hinder our efforts to integrate our balance sheet. An example of
such trapped liquidity includes our operations in Germany where German regulations impose separate
liquidity requirements that restrict ING’s ability to move a liquidity surplus out of the German subsidiary.

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ING Bank Annual Report 2023 263
Disclaimer
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
and the regional and global economic impact of the invasion of Russia into Ukraine and related international
response measures (2) changes affecting interest rate levels (3) any default of a major market participant
and related market disruption (4) changes in performance of financial markets, including in Europe and
developing markets (5) fiscal uncertainty in Europe and the United States (6) discontinuation of or changes
in ‘benchmark’ indices (7) inflation and deflation in our principal markets (8) changes in conditions in the
credit and capital markets generally, including changes in borrower and counterparty creditworthiness (9)
failures of banks falling under the scope of state compensation schemes (10) non-compliance with or
changes in laws and regulations, including those concerning financial services, financial economic crimes
and tax laws, and the interpretation and application thereof (11) geopolitical risks, political instabilities and
policies and actions of governmental and regulatory authorities, including in connection with the invasion of
Russia into Ukraine and related international response measures (12) legal and regulatory risks in certain
countries with less developed legal and regulatory frameworks (13) prudential supervision and regulations,
including in relation to stress tests and regulatory restrictions on dividends and distributions (also among
members of the group) (14) ING’s ability to meet minimum capital and other prudential regulatory
requirements (15) changes in regulation of US commodities and derivatives businesses of ING and its
customers (16) application of bank recovery and resolution regimes, including write-down and conversion
powers in relation to our securities (17) outcome of current and future litigation, enforcement proceedings,
investigations or other regulatory actions, including claims by customers or stakeholders who feel misled or
treated unfairly, and other conduct issues (18) changes in tax laws and regulations and risks of non-
compliance or investigation in connection with tax laws, including FATCA (19) operational and IT 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 we do business and
including any risks as a result of incomplete, inaccurate, or otherwise flawed outputs from the algorithms
and data sets utilized in artificial intelligence (20) risks and challenges related to cybercrime including the
effects of cyberattacks and changes in legislation and regulation related to cybersecurity and data privacy ,
including such risks and challenges as a consequence of the use of emerging technologies, such as
advanced forms of artificial intelligence and quantum computing (21) changes in general competitive
factors, including ability to increase or maintain market share (22) inability to protect our intellectual
property and infringement claims by third parties (23) inability of counterparties to meet financial
obligations or ability to enforce rights against such counterparties (24) changes in credit ratings (25)
business, operational, regulatory, reputation and other risks and challenges in connection with climate
change and Environmental, Social and Governance (ESG)-related matters, including data and reporting (26)
inability to attract and retain key personnel (27) future liabilities under defined benefit retirement plans (28)
failure to manage business risks, including in connection with use of models, use of derivatives, or
maintaining appropriate policies and guidelines (29) 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, and (30) the other risks and uncertainties detailed in the most recent annual report of ING Bank
N.V. (including the Risk Factors contained therein) and ING’s more recent disclosures, including press
releases, which are available on www.ING.com.
This document may contain ESG-related material that has been prepared by ING on the basis of publicly
available information, internally developed data and other third-party sources believed to be reliable. ING
has not sought to independently verify information obtained from public and third-party sources and makes
no representations or warranties as to accuracy, completeness, reasonableness or reliability of such
information.
Materiality, as used in the context of ESG, is distinct from, and should not be confused with, such term as
defined in the Market Abuse Regulation or as defined for Securities and Exchange Commission (‘SEC’)
reporting purposes. Any issues identified as material for purposes of ESG in this annual report are therefore
not necessarily material as defined in the Market Abuse Regulation or for SEC reporting purposes. In
addition, there is currently no single, globally recognized set of accepted definitions in assessing whether
activities are “green” or “sustainable.” Without limiting any of the statements contained herein, we make no
representation or warranty as to whether any of our securities constitutes a green or sustainable security or
conforms to present or future investor expectations or objectives for green or sustainable investing. For
information on characteristics of a security, use of proceeds, a description of applicable project(s) and/or
any other relevant information, please reference the offering documents for such security.
This annual report may contain 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 annual report. 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 filing of this annual report or that any information found at such
websites will not change following the filing of this annual report. Many of those factors are beyond ING’s
control.
This document is the PDF version of the 2023 Annual Report of ING made available on ing.com. Another
version of this document has been prepared in the European single electronic reporting format (ESEF) and

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> Disclaimer
ING Bank Annual Report 2023 264
such ESEF reporting package is also available on ing.com. In the event of any discrepancies between this PDF
version and the ESEF reporting package, the ESEF reporting package governs.
Any forward-looking statements made by or on behalf of ING speak only as of the date they are made, and
ING assumes no obligation to publicly update or revise any forward-looking statements, whether as a result
of new information or for any other reason.
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.

Contents |  | Introduction |  | Report of Management Board |  | Our leadership and corporate governance |  | Risk management |  | Consolidated financial statements |  | Parent company financial statements |  | Other information |  |

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ING Bank Annual Report 2023 265