ING net profit rises 3.5% to €1.85 billion, misses expectations
Key Facts
ING Group posted net profit of €1.85 billion in the third quarter of 2026, up 3.5% year on year but below the average analyst forecast of €1.97 billion. The results showed a divergence between growth in some income sources and the bottom line: commercial net interest income rose, while operating expenses exceeded analysts' expectations. Additions to loan loss provisions totaled €403 million during the quarter. On October 29, the group announced an additional €1.9 billion distribution after completing the share buyback program it disclosed in April 2026. The figures combine annual profit growth and a shortfall against expectations with a large return of capital to shareholders.
Commercial net interest income rose 13.4% to €4.34 billion, broadly in line with the average analyst forecast of €4.34 billion, according to Investing.com. ING said growth in commercial balances contributed to the increase in net interest income, while lower other income reflected the effects of interest rate volatility, which the group expects to reverse over time. Total income was €6.23 billion, below the average forecast of €6.31 billion. By contrast, fee income rose to €1.273 billion, up 9.3% year on year. Profit before tax increased 5.7% year on year to €2.705 billion, according to the bank's statement.
Operating expenses were €3.12 billion, exceeding the average analyst forecast of €3.08 billion, while additions to loan loss provisions rose to €403 million. ING said operating expenses increased 1.1% from the previous quarter, as cost-cutting initiatives partly offset higher staff expenses linked to wage inflation. The group's chief risk officer attributed the rise in provisions mainly to a methodological change and said it did not reflect a deterioration in underlying credit quality. He added that, excluding non-recurring items, risk costs remained largely stable and in line with previous quarters. This explanation places the increase in provisions within a methodological change rather than signaling broader weakness in credit quality.
On activity, ING recorded net growth of €11 billion in core lending and a €12.1 billion increase in net core deposits during the quarter. The mortgage portfolio grew by €6.9 billion, while retail lending increased by €8.5 billion, equivalent to annual growth of 6%. In wholesale banking, lending grew by €2.5 billion and deposits by €9.4 billion, while fee income in the segment rose 9.4% year on year. The bank added 259,000 mobile primary customers during the quarter, with strong contributions from Germany, the Netherlands and Romania. Assets under management and online brokerage also increased by €6.7 billion during the quarter to €328 billion, up 22% year on year.
The common equity Tier 1 ratio was 13.3%, compared with the group's target of around 13%, according to Investing.com. ING said return on tangible equity was 16.3% for the quarter, while its four-quarter rolling average was 14.8%. During the quarter, the group completed two significant risk transfer transactions, delivering total risk-weighted asset relief of €3 billion. These metrics come as the group announced a total additional distribution of €1.9 billion after completing its previous buyback program. The new distribution includes a €1.65 billion share buyback and an additional €250 million cash distribution in January 2027.
ING reaffirmed its 2026 outlook, targeting total income of more than €24.5 billion, operating expenses of between €12.6 billion and €12.8 billion, and return on tangible equity of more than 15%. After the results were announced on October 29, the group's shares fell about 3% in early trading, according to Reuters coverage via AOL. The coverage quoted KBC Securities as describing market expectations as "slightly ambitious" and saying they had not been met. According to EL7 data, ING's New York-listed American depositary receipt closed at $32.57 on October 27 and $32.89 on October 28; these closing prices do not represent the share's movement in early trading on October 29. The group's shares are also listed in Amsterdam and Brussels, while its American depositary receipts trade on the New York Stock Exchange. The chief executive said the group would provide a strategy update at its Capital Markets Day scheduled for June 14, 2027.