the possibility that had ING Group applied IFRS-IASB as its primary accounting framework it might have applied

alternative hedge strategies where those alternative hedge strategies could have qualified for IFRS-IASB compliant

hedge accounting. These decisions could have resulted in different shareholders’ equity and net result amounts

compared to those indicated in this Annual Report on Form 20-F.

In 2025 forward interest rates Increased resulting in a positive EU IAS 39 carve out adjustment after tax of EUR

1,996 million (2024: EUR 1,058 million negative; 2023: EUR 3,147 million negative). The impact of the adjustment is

mainly reflected in line item 'Valuation results and net trading income' in the statement of profit or loss. A

reconciliation between IFRS-EU and IFRS-IASB is included below.

Both IFRS-EU and IFRS-IASB differ in several areas from accounting principles generally accepted in the United

States of America (US GAAP).


Reconciliation net result under IFRS-EU and IFRS-IASB
in EUR million	2025	2024	2023
In accordance with IFRS-EU (attributable to the shareholders of the parent)	6,327	6,392	7,287
Adjustment of the EU IAS 39 carve-out	2,643	-1,528	-4,455
Tax effect of the adjustment	-647	470	1,308
Effect of adjustment after tax	1,996	-1,058	-3,147
In accordance with IFRS-IASB (attributable to the shareholders of the parent)	8,324	5,334	4,140


Reconciliation shareholders’ equity under IFRS-EU and IFRS-IASB
in EUR million	2025	2024	2023
In accordance with IFRS-EU (attributable to the shareholders of the parent)	49,698	50,314	51,240
Adjustment of the EU IAS 39 carve-out	6,022	3,378	4,902
Tax effect of the adjustment	-1,636	-989	-1,457
Effect of adjustment after tax	4,386	2,389	3,444
In accordance with IFRS-IASB Shareholders’ equity	54,083	52,703	54,684

1.3 Changes to accounting policies and presentation

ING Group has consistently applied its accounting policies to all periods presented in these Consolidated financial

statements.

During 2025, ING Group has revised the presentation in Note 26 'Other operating expenses', to enhance its

relevance and improve comparability. Consequently, comparative figures for 2024 and 2023 have been updated

accordingly.

1.3.1 Changes in IFRS effective in 2025

The following amendments to IFRS became effective in the current reporting period with no significant impact for

ING Group:

§Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates': Lack of Exchangeability (issued in

August 2023). Amendments provide guidance on determining exchange rates when a currency lacks

exchangeability, including estimation methods and disclosure requirements.

1.3.2 Upcoming changes in IFRS after 2025

ING Group has not early adopted any of the following Standards, interpretations or amendments that have been

issued but are not yet effective:

Effective in 2026:

§Amendments to IFRS 9 'Financial Instruments' and IFRS 7 'Financial Instruments: Disclosures': Classification and

Measurement of Financial Instruments (issued in May 2024). The amendments clarify that a financial liability is

derecognised on the ‘settlement date’ and introduce an accounting policy choice to derecognise financial

liabilities settled using an electronic payment system before the settlement date. Other clarifications relate to

the classification of financial assets with ESG linked features, non-recourse loans and contractually linked

instruments. Further, additional disclosure requirements introduced for equity investments at fair value

through other comprehensive income (FVOCI) and financial instruments with contingent cash flow features.

§Amendments to IFRS 9 'Financial Instruments' and IFRS 7 'Financial Instruments: Disclosures': Contracts

Referencing Nature-dependent Electricity (issued in December 2024). Amendments clarify accounting for

renewable electricity contracts, including own-use and hedge accounting and related disclosures.

§Annual Improvements to IFRS Accounting Standards: Volume 11 (issued in July 2024). Amendments include

minor clarifications and corrections across a number of Standards to improve consistency and clarity.

The implementation of the above amendments is expected to have no significant impact on ING Group's

Consolidated financial statements as they become effective.

Effective in 2027:

§Amendments to IAS 21 'The Effects of Changes in Foreign Exchange Rates': Translation to a hyperinflationary

presentation currency (issued in November 2025). Amendments clarify accounting when translating from a

non-hyperinflationary functional currency to a hyperinflationary presentation currency. There is no impact

expected on ING Group's financial statements.

§New Standard IFRS 18 'Presentation and Disclosure in Financial Statements' (issued in April 2024). IFRS 18

replaces IAS 1 'Presentation of Financial Statements', carrying forward many of the requirements in IAS 1

unchanged and complementing them with new requirements. In addition, some paragraphs from IAS 1 have

been moved to IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' and IFRS 7.

Furthermore, the IASB has made minor amendments to IAS 7 'Statement of Cashflows' and IAS 33 'Earnings per

Share'. IFRS 18 introduces new requirements to:

–present specified categories (operating, investing, financing, income tax and discontinued operations) and

defined subtotals in the statement of profit or loss;

–provide disclosures on management-defined performance measures (MPMs) in the notes to the financial

statements; and

–improve aggregation and disaggregation.

The implementation of IFRS 18 is expected to have no significant impact on ING Group's consolidated financial

statements as it only affects the presentation and disclosure of items in the financial statements and does not

change the underlying recognition or measurement of assets, liabilities, income or expenses.

ING Group is currently assessing the impact the amendments will have on the Consolidated financial statements.

To date, the following potential impacts have been identified:

§IFRS 18 will not affect ING's net profit, but will reclassify income and expenses into new categories in the

statement of profit or loss and introduce a new subtotal line item 'operating profit'.

§The line items presented in the primary financial statements might change as a result of the enhanced

principles introduced on 'aggregation and disaggregation'. ING does not expect there to be a significant change

in the information that is currently disclosed in the notes because the requirements to disclose material

information remain unchanged.

§New disclosure requirements for management-defined performance measures (MPMs).

§For the statement of cash flows, the starting point for calculating cash flows from operating activities will

change to 'operating profit' as noted above.

In addition, in May 2024, the IASB also issued a new accounting Standard IFRS 19 'Subsidiaries without Public

Accountability: Disclosures'. However, it is not applicable for the consolidated financial statements of ING Group.

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 Group 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 Note 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 ‘Investment in associates and joint ventures');

§Investment in associate - determination of significant influence over associates (refer to Note 1.10 'Investment

in associates and joint ventures'); and

§Provisions (refer to Note 1.15 ‘Provisions, contingent liabilities and contingent assets’).

In addition, in January 2025 ING has reached an agreement on the sale of the business in Russia (ING Bank

(Eurasia) JSC), subject to several conditions, including substantive and uncertain regulatory approvals. Judgement

is required to evaluate the probability of the sale. Given the prevailing uncertainties around substantive regulatory

approvals as at 31 December 2025, no loss was recognised for the year ended 31 December 2025 and assets and

liabilities of the disposal group were not classified as held for sale. Reference is made to Note 32 'Potential sale of

ING Bank (Eurasia) JSC'.

In March 2024 ING repaid the final EUR 6 billion of its Targeted Longer-Term Refinancing Operations (TLTRO) III

participation. As a result, accounting for TLTRO is no longer an area of significant judgement in 2025 and 2024,

while it was as such in 2023.

1.5 Financial instruments

ING Group 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. ING 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 Group 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 Group 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

Group 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 Group 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 Group 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 Group’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 Group 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.

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 Group 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 Group 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 repos) 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 Other interest income or Other 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 Other interest income or Other interest expense in the

period in which it arises.

ING Group 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 Group applies the fair value through OCI option to

investments which are considered strategic, consisting of investments that add value to ING Group’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 Group’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 ‘Other interest income (expense)'.

A financial guarantee contract is a contract that requires ING Group 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’.

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 as ING Group 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 mandatorily at FVPL. Otherwise, the counterparty liability is included in

Deposits from banks, Customer deposits, or Trading.

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.

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 Group 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

Group 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 Group 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 Group 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 Group’s own credit risk by means of a DVA. To include the funding risk, ING Group applies

an additional ‘Funding Valuation Adjustment’ (FVA) to the uncollateralised derivatives based on the market price of

funding liquidity. ING Group also applies to certain positions other valuation adjustments to arrive at the fair value,

such as Bid-Offer adjustments, Model Risk Adjustments and Collateral Valuation Adjustments (CollVA).



	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 Group 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 35 '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 Group decided to exercise this accounting policy choice and did not adopt IFRS

9 hedge accounting as of 1 January 2018.

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 or 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 Group’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 Group 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 Group documents the relationship between hedging instruments and

hedged items, its risk management objective, together with the methods selected to assess hedge effectiveness.

ING Group 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 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.

Benchmark rate reform – specific policies for hedges directly affected by the benchmark rate reform

As explained in the ‘Impact of the benchmark rate reform’ paragraph of the ‘Risk management’ section, a

fundamental review of important interest rate benchmarks has been carried out, and is still ongoing for some of

them (for instance, WIBOR). Interest Rate Benchmark Reform Phase 1 and Phase 2 amendments to IFRS provide

specific reliefs that allow hedge accounting relationships to continue when the benchmark rate reform is ongoing.

Phase 1 reliefs remained relevant for ING Group as at 31 December 2025 for WIBOR hedges, and will cease to apply

once uncertainty about the timing and amount of the benchmark rate-based cash flows is resolved, or when the

hedging instrument is discontinued. ING Group’s policy is to cease applying Phase 1 reliefs when the relevant

contract (hedging instrument or hedged item) is modified. When this occurs, Phase 2 reliefs become applicable still

allowing hedge accounting relationships to continue. Refer to note ‘Risk management/Impact of the benchmark

rate reform’ for further details on WIBOR transition and ING’s exposures related to WIBOR that have yet to

transition.

Non-trading derivatives that do not qualify for hedge accounting

Derivative instruments that are used by ING Group as part of its risk management strategies, but which do not

qualify for hedge accounting under ING Group’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 Group 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

derivatives, repurchase and reverse repurchase agreements and cash pooling agreements. A significant portion of

offsetting is applied to derivatives and related cash margin balances, which are either directly cleared through

central clearing parties or cleared through clearing members of central clearing parties. For more information,

reference is made to Note 40 ‘Offsetting financial assets and liabilities’.

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 Group

calculates the 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. 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 Group 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. Reference is made to the ‘Criteria for identifying a significant increase in credit risk (SICR)’ in the ‘Risk

management’ section of the Annual Report.

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 the '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 Group 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 Group has established a quarterly process whereby forward-looking macroeconomics scenarios and

probability weightings are developed for the purpose of ECL. ING Group applies data predominantly from a leading

service provider enriched with the internal ING Group view. A baseline, up-scenario and down-scenario are

determined to reflect an unbiased and probability-weighted ECL amount. As a baseline scenario, ING Group 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 Group uses three macroeconomic scenarios when determining IFRS 9 ECL (baseline, upside and downside). The

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 is disclosed in the 'Alternative Scenarios and

Probability Weights' section. Additionally, this approach is detailed in the sensitivity analysis within the 'Risk

management' section of the Annual Report.

Measurement of ECL

ING Group 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 Group 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 the 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.

For the measurement of ECL, ING Group’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 Group 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 Group’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 other things, 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 income is no longer recognised based on the gross carrying

amount of the asset. Instead, interest income is calculated by applying the original effective interest rate to the

amortised cost 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

if the lifetime ECL at the reporting date is lower than the estimated lifetime ECL at initial recognition.

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; and

§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 also involves the forgiveness of a legal obligation, in

whole or in part. This means that ING Group 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 is deducted from the gross carrying amount of the assets. For debt

instruments at FVOCI, the ECL is recognised in OCI, instead of deducting it from 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, is recognised as liabilities and presented in Other provisions. ECL are presented in profit

or loss in Addition to loan loss provision.



	Significant judgements and critical accounting estimates and assumptions: The calculation of ECL requires a number of judgements and estimates. In particular: §ING Group 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 Group 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 Group 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 constitutes a significant judgement. Analysis of the sensitivity associated with the assessment of a 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 (including climate risk), a number of management adjustments to the model-based ECL were necessary as at 31 December 2025, which required significant judgement. Reference is made to the ‘Management adjustments applied this reporting period’ paragraph in the ‘risk management’ section of the Annual Report.

1.5.7 Modification of financial instruments

In certain circumstances, ING Group 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 are

executed based on credit concerns, they are also referred to as forbearance (refer to the ‘Risk management’

section of the Annual Report for more details) and require analysis on whether the contractual terms have been

substantially modified or not. A similar assessment is needed when contractual terms are modified for reasons

other than forbearance.

ING Group 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 Group participated in the Targeted Longer-Term Refinancing Operations (TLTRO III), which mainly affected

comparative periods as, in March 2024, ING repaid the final EUR 6 billion of its TLTRO III participation. ING Group

considered 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

was considered to be a market conforming rate and TLTRO funding was recognised fully as a financial liability.

ING Group interpreted 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 resulted in discrete rates for discrete interest periods over the

life of TLTRO. The change in the applicable rate between interest periods was seen as a change in the floating rate

and was accounted for prospectively. Similarly, if the ECB announced changes in the rate for the amounts already

drawn under the existing TLTRO, then such changes also represented a change in a floating rate. Following this,

such changes led 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 related to the periods already passed, the impact for those past periods was

recognised in profit or loss immediately. Reference is made to Note 20 ‘Net interest income’ for the presentation of

ING Group’s participation in TLTRO programmes.

1.5.9 Financial guarantees purchased (ING as holder)

When ING purchases a financial guarantee, it assesses whether the guarantee is integral or non‑integral to the

related loan.

Integral financial guarantees are not accounted for separately but included in the accounting for the loan under

IFRS 9:

§For loans measured at amortised cost or FVOCI, the guarantee is reflected in the expected credit loss (ECL)

measurement. Premiums paid are treated as transaction costs and recognised as part of Interest income using

the effective interest rate method.

§For loans measured at FVTPL, the guarantee is included in the fair value of the loan. Premiums paid are treated

as transaction costs and recognised within Fee and commission expense.

Non‑integral financial guarantees are accounted for separately, within Other assets, by analogy to

reimbursements under IAS 37 'Provisions, Contingent Liabilities and Contingent Assets':

§For loans measured at amortised cost or FVOCI, a compensation right asset is recognised and measured based

on ECL, provided recovery is virtually certain.

§Changes in compensation right assets are recognised as a reduction in risk costs within Addition to loan loss

provisions line in profit or loss. Premiums paid are recognised within Fee and commission expense.

§For loans measured at FVTPL, non‑integral financial guarantees are designated at FVTPL, with premiums

recognised within Fee and commission expense.

1.6 Consolidation

ING Group comprises ING Groep N.V. (the Parent Company), ING Bank N.V. and all other subsidiaries. Subsidiaries

are entities controlled by ING Groep N.V. Control exists if ING Groep N.V. is exposed to 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.

Transactions between ING Groep N.V. and its subsidiaries are eliminated on consolidation. Reference is made to

Note 43 'Principal subsidiaries, investments in associates and joint ventures' for a list of principal subsidiaries and

their statutory place of incorporation. A description of ING’s activities involving structured entities is included in

Note 44 '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 Groep 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 regarding the 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 Group, engaged in providing products or services,

whose operating results are regularly reviewed by the Executive Board of ING Group and the Management Board

Banking (together they make up the Chief Operating Decision Maker (CODM)) who decide which resources to

allocate to the segment and assess its performance.

The CODM reviews and assesses ING Group's performance primarily by line of business. As a result, ING identified

five operating segments which are also disclosed as reportable segments.

1.8 Hyperinflation accounting

Since the second quarter of 2022, Türkiye has been considered a hyperinflationary economy for accounting

purposes. As ING Group has a subsidiary in Türkiye, ING Group has applied IAS 29 ‘Financial Reporting in

Hyperinflationary Economies’ to its operations since then. IAS 29 continued to be relevant for ING’s operations in

Türkiye in 2023, 2024 and 2025. 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 2025 was 3,513.87, at 31

December 2024 was 2,684.55 and at 31 December 2023 it was 1,859.38 (movement 2025: 30.89%, 2024: 44.38%,

2023: 64.77%). 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 were translated and presented in EUR at the exchange rate on 31

December 2025. 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 Group chose to present both the restatement effect resulting from restating ING Group’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 Group’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 Group’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 Investment in associates and joint ventures

Associates are all entities over which ING Group 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 Group 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 Group’s investment in associates and joint ventures (net of any

accumulated impairment loss) includes goodwill identified on acquisition. ING Group’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 reserves is recognised in equity. The cumulative post-acquisition changes are adjusted

against the carrying amount of the investment. When ING Group’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 Group

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 Group and its associates and joint ventures are eliminated to the

extent of ING Group’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 Group.

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. In case

of an indication of potential 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. In case of an indication of a potential reversal of impairment, 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:
	Potential impairment and reversal assessment Identification of impairment indicators as well as indicators of potential reversal of previous impairments of ING Group’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. See Note 8 ‘Investment in associates and joint ventures’. Determination of significant influence over associates It is presumed that an entity has significant influence when it holds 20% or more of the voting power of the investee. Conversely, it is presumed that an entity does not have significant influence when voting power is less than 20% in the investee. Depending on the facts and circumstances, the presumption is rebutted when ING can clearly demonstrate whether or not it has power to participate in the investee’s financial and operating policy decisions. The consideration of all relevant factors requires judgement, including, amongst others, the investment purpose, investee’s governance structure and legal regime, ability to obtain meaningful board representation and participation in policymaking decisions. Refer to Note 5 'Financial assets at fair value through other comprehensive income' regarding ING’s accounting for its investment in Van Lanschot Kempen.

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: two to five

years for data processing equipment, 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 Group 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 Group. 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.

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 decreases 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 Group as lessor

When ING Group acts as a lessor, a distinction should be made between finance leases and operating leases. For

ING Group 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 Group 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 Group 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 Group 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.

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 Group 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 Group, 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

Group. 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 Group 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 Group 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 Group 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 42 '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 in Note 41 '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.

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 Group pays contributions to publicly or privately administered pension

insurance plans on a mandatory, contractual or voluntary basis. ING Group 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.