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ING Bank aims for 4%-5% growth by 2027 despite rising costs

ING has stated that it will prioritize local scale in retail banking and develop wholesale banking as a separate pillar

The Dutch bank ING aims for a yearly total income growth of 4% to 5% until 2027. This growth is expected to come from higher revenues from net interest income and fees, while decreased loan losses should balance out the rise in costs.

However, the bank may face reduced profits due to expected lower interest rates this year. In the first quarter of 2024, ING reported a slight decrease in profit compared to the previous year.

Despite this, RBC analysts stated in a note to clients that the updated guidance until 2027, released before a capital markets day event at 1200 GMT on Monday, indicates positive changes.

At 0826 GMT, ING shares rose by 2.6%, leading the AEX index in Amsterdam. The largest Dutch lender by assets announced its goal to achieve fee income of 5 billion euros ($5.35 billion) and a return on equity of 14% over the same period.

According to a presentation to investors, ING stated that their net interest income development is primarily driven by volume growth, while maintaining strong margins in a positive rate environment. They anticipate that cost inflation will surpass headline inflation due to the delayed impact of collective labour agreements.

Regulatory costs are expected to remain steady in 2025 compared with 2024 and are projected to increase in line with deposit volumes from 2026 onward.

After experiencing an increase in income from its retail banking unit in the first quarter, driven by higher fee income from both daily banking and investment products, ING plans to continue its focus on expanding its retail business.

The company aims to have risk-weighted assets (RWA) in the sector of 50% to 55% by 2027. ING has also stated that it will prioritise local scale in retail banking and develop wholesale banking as a separate pillar.

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