Corporate Communications

Amsterdam, 2 August 2017

ING posts 2Q17 net result of EUR 1,371 million

ING records continued commercial growth and further progress on accelerating Think Forward strategic priorities

ING grew retail customer base in 1H17 by 700,000 to 36.5 million, and primary relationships increased by 400,000 to 10.1 million
Net core lending in 2Q17 increased by EUR 6.4 billion; net customer deposit infl ow amounted to EUR 5.3 billion

ING 2Q17 underlying pre-tax result of EUR 1,992 million; ING declares interim cash dividend of EUR 0.24 per ordinary share

Strong result refl ects volume growth at resilient margins, higher commission income and a gain on the sale of an equity stake
ING Group 2Q17 four-quarter rolling ROE was 10.8%; ING Group fully loaded common equity Tier 1 (CET1) ratio stable at 14.5%

CEO statement

"At ING, we are passionate about providing a diff erentiating experience to our customers, who are at the heart of everything we do," said Ralph Hamers, CEO of ING Group. "Banking and technology keep changing faster and faster. We keep pace by continuously adapting and improving to meet customers' needs, and we aim to exceed their expectations. Our strategy drives our consistent and sustainable growth, as evidenced by the strong increase in our worldwide customer base in the fi rst six months of the year to 36.5 million, of which 10.1 million are considered primary customers."

"Innovation is in our DNA and our diverse capabilities in this area constantly enhance the customer experience. During the second quarter of 2017, we introduced the 'Banking to go' app in Germany which includes new technologies that make banking easier and more personal. 'Banking to go' was co-created by a team from Germany and the Netherlands, using customer feedback. The app demonstrates how countries and teams are uniting across ING to meet our ambition to provide a uniform customer experience in all of our markets, anywhere and anytime. This goal of uniting services is also refl ected in our vision of ING for the future: off ering a single, borderless digital platform with a clear and easy experience wherever you are in the world. A platform where ING products and services are supplemented by third-party off erings, and where all of our customers' fi nancial needs can be satisfi ed."

"During the second quarter, we made important strides in establishing the internal operational framework for our digital transformation. We also realised further progress on our commercial ambitions, with EUR 6.4 billion of net core lending growth at stable margins, despite aggressive competition in some of our markets, and a EUR 5.3 billion increase in net customer deposits. In the second quarter of 2017, ING Group's underlying pre-tax result was EUR 1,992 million, driven by the continued volume growth at resilient interest margins, higher commission income and a one-time gain on the sale of an equity stake in the real estate run-off portfolio. Operating expenses remained under control, supported by the benefi ts from ongoing cost-saving initiatives, but they edged up higher due to a one-off legal provision related to a business that was discontinued in Luxembourg around the year 2000. On a four-quarter rolling basis, ING Group's underlying return on equity improved to 10.8% from 8.8% a year ago."

"ING Group's fully loaded CET1 ratio remained strong at 14.5% at the end of June 2017. We are committed to maintaining a capital position in excess of prevailing fully loaded requirements and to providing an attractive return to shareholders. In the second quarter, we reserved EUR 0.9 billion of the quarterly net profi t for future dividend payments, as we did with the fi rst-quarter net profi t. Today, we declare an interim cash dividend of EUR 0.24 per ordinary share over the fi rst half of 2017, which is equal to the amount paid over the fi rst half of 2016."

"Our second-quarter performance confi rms that the core elements of our strategy are as relevant as ever in the fast-changing worlds of banking and technology, and that we are able to execute steadily on our priorities. We're on the right track to achieve our strategic milestones while continuing to support our growing customer base as we build the bank of the future."

Investor enquiries

T: +31 (0)20 576 6396 E: [email protected]

Press enquiries T: +31 (0)20 576 5000 E: [email protected]

Investor conference call

2 August 2017 at 9:00 am CET +31 (0)20 341 8255 (NL) +44 203 365 3209 (UK) +1 866 349 6092 (US) Live audio webcast at www.ing.com

Media conference call

2 August 2017 at 11:00 am CET +31 (0)20 531 5871 (NL) +44 203 365 3210 (UK) Live audio webcast at www.ing.com

Business & Sustainability Highlights Share Information

Financial calendar

Share Information	2
Business & Sustainability Highlights	3
Consolidated Results	4
Retail Banking	9
Wholesale Banking	13
Corporate Line	16
Geographical Split	17
Consolidated Balance Sheet	19
Risk & Capital Management	21
Economic Environment	25
Appendix	26

Share information
				2Q2016 3Q2016 4Q2016 1Q2017 2Q2017
Shares (in millions, end of period)
Total number of shares				3,878.0 3,878.1 3,878.5 3,883.3 3,885.3
- Treasury shares	1.1	0.8	0.7	0.9	0.6
- Shares outstanding				3,876.9 3,877.3 3,877.8 3,882.4 3,884.7
Average number of shares				3,875.8 3,877.1 3,877.6 3,878.6 3,884.0
Share price (in euros)
End of period	9.18	10.99	13.37	14.17	15.10
High	11.47	11.45	13.72	14.62	15.75
Low	8.61	8.54	10.88	12.93	13.65
Net result per share (in euros)	0.33	0.35	0.19	0.29	0.35
Shareholders' equity per share (end of period in euros)	12.66	12.75	12.84	13.07	12.79
Dividend per share (in euros)	0.24	n.a.	0.42	n.a.	0.24
Price/earnings ratio1)	8.1	9.1	11.1	12.1	12.7
Price/book ratio	0.73	0.86	1.04	1.08	1.18

Ex-date for interim dividend 2017 (Euronext Amsterdam): Friday, 4 August 2017 Record date for interim dividend 2017 entitlement (Euronext Amsterdam): Monday, 7 August 2017 Record date for interim dividend 2017 entitlement (NYSE): Monday, 14 August 2017 Payment date interim dividend 2017 (Euronext Amsterdam): Monday, 14 August 2017 Payment date interim dividend 2017 (NYSE): Monday, 21 August 2017 Publication results 3Q2017: Thursday, 2 November 2017 All dates are provisional

1) Four-quarter rolling average

Market capitalisation (in EUR billion)

Listing information

The ordinary shares of ING Group are listed on the exchanges of Amsterdam, Brussels and New York (NYSE).

Stock exchanges	Tickers (Bloomberg, Reuters)	Security codes (ISIN, SEDOL1)
Euronext Amsterdam and Brussels	INGA NA, INGA.AS	NL0011821202, BZ57390
New York Stock Exchange ING US, ING.N		US4568371037, 2452643

American Depositary Receipts (ADRs)

For questions related to the ING ADR program, please visit J.P. Morgan Depositary Receipts Services at www.adr.com, or contact:

Broker/Institutional Investors

please contact: J.P. Morgan Chase Bank, N.A. Depositary Receipts 4 New York Plaza, Floor 12 New York, NY 10004 In the US: (866) JPM-ADRS Outside the US: +1 866 576-2377 ADR Shareholders can contact J.P. Morgan Transfer Agent Service Center: J.P. Morgan Chase Bank, N.A. P.O. Box 64504 St. Paul, MN 55164-0504 In the US: +1 800 990 1135 Outside the US: +1 651 453 2128

Email: [email protected]

Shareholders or holders of ADRs can request a hard copy of ING's audited fi nancial statements, free of charge, at www.ing.com/publications.htm

1 January 2016 to 30 June 2017

Relative share price performance

Business & Sustainability Highlights

In the second quarter ING made further progress accelerating our Think Forward strategy with the purpose to empower people to stay a step ahead in life and in business.

To continue delivering a diff erentiating customer experience, we are increasing innovation and accelerating our own digital transformation to keep pace with rapid changes in technology and customer behaviour. The goal is to provide a uniform experience in all our markets based on our clear and easy, anytime/anywhere Customer Promise. To support this, we are evolving toward one globally scalable digital banking platform that is capable of integrating into other online platforms that our customers use and that is open to third-party services that add value for our customers.

Innovation that empowers customers

The banking sector is being impacted by major changes in technology and customer behaviour. ING's strategic focus on innovation plays an important part in helping us to continuously improve the customer experience and meet customers' changing expectations.

During the second quarter, ING introduced its 'Banking to go' app in Germany, which allows customers to create their own PIN and authorise transfers using touch ID, making daily banking easier and faster. 'Banking to go' was created by an international team from Germany and the Netherlands that incorporated extensive customer feedback into the development. This demonstrates how teams are uniting across ING to improve the customer experience and how customer feedback is driving innovation at ING.

In Belgium, we partnered with other banks and with telecommunications companies to launch 'Itsme', an app that provides a digital ID that customers can use to access their bank accounts and authorise transactions, and to gain other online access, such as to government agencies and for e-commerce. Itsme is an example of partnering with outside parties to co-create solutions that add value for customers.

ING also launched a trade matching prototype for foreign exchange transactions using blockchain technology, demonstrating how this technology can facilitate faster and more effi cient transactions. The matching technology achieves a new level of effi ciency by replacing human intervention and manual reconciliation while also meeting banking requirements in areas like security. It was developed in collaboration with the R3 consortium, where ING and other global fi nancial institutions collaborate to develop blockchain solutions for the fi nancial services industry.

Open platforms

ING continued to develop the Yolt app in the UK market in the second quarter. The aggregation app gives users a better grip on their fi nances by allowing them to see the balances of all their accounts and credit cards across multiple fi nancial providers in one place. Yolt has now been released in Open Beta in the Apple App store and in Google Play, attracting

thousands of new users. ING sees Yolt as a step toward banking of the future and an improved customer experience through open platforms.

ING is also accelerating the pace of its own innovation through partnerships with external fi ntechs. We recently entered into an investment in Fintonic. Fintonic's aggregation app, available in Spain, provides advice to empower people in their fi nancial planning and decision-making.

Sustainable progress

ING's commitment to sustainability includes promoting sustainable progress in the communities where we are active. In July, we broke ground on a new global head offi ce in Amsterdam. With scheduled completion in 2019, it is expected to be one of the most sustainable buildings in the Netherlands. Together with four existing ING buildings, it will form part of a campus integrated with the surrounding community with green spaces for fl exible working and collaboration, playing sports and holding events and gatherings.

ING believes that banking must play a signifi cant role in facilitating society's shift to sustainability. One way we do this is by fi nancing sustainable projects and clients that are environmental and social outperformers in their sectors.

In the fi rst quarter, ING collaborated with client Royal Philips in the role of sustainability coordinator as part of the issue of the fi rst-ever syndicated loan with an interest rate linked to a company's sustainability rating. In the second quarter, we took part in similar sustainable loans whereby the interest rate is pegged to sustainability ratings for clients, including loans for Barry Callebaut and EDF.

We also served as joint bookrunner for the fi rst Austrian social covered bond. It was issued by Kommunalkredit Austria AG, a specialist bank that acts as a bridge between developers and institutional investors in areas including social infrastructure. The covered bond will fi nance hospitals, nursing homes, schools, universities and public building projects. In addition to this, ING has lead managed six other green bonds so far this year and has been mandated to issue another two in 2017.

We usually report on our Sustainable Transitions Financed ('STF') bi-annually. As part of an update of our Sustainability Direction and STF targets, and to ensure we are continually improving, we are revising and further strengthening our measurement methodology. Our upcoming Annual Report 2017 will provide more details.

Consolidated results
	2Q2017	2Q2016	Change	1Q2017	Change	1H2017	1H2016	Change
Profit or loss (in EUR million)
Net interest income	3,359	3,267	2.8%	3,352	0.2%	6,711	6,515	3.0%
Net commission income	714	610	17.0%	682	4.7%	1,396	1,217	14.7%
Investment income	43	172	-75.0%	48	-10.4%	91	243	-62.6%
Other income	415	498	-16.7%	314	32.2%	729	659	10.6%
Total underlying income	4,532	4,547	-0.3%	4,396	3.1%	8,928	8,634	3.4%
Staff expenses	1,309	1,258	4.1%	1,271	3.0%	2,580	2,525	2.2%
Regulatory costs1)	69	75	-8.0%	474	-85.4%	543	571	-4.9%
Other expenses	933	898	3.9%	865	7.9%	1,799	1,772	1.5%
Underlying operating expenses	2,311	2,231	3.6%	2,611	-11.5%	4,922	4,868	1.1%
Gross result	2,221	2,316	-4.1%	1,785	24.4%	4,005	3,766	6.3%
Addition to loan loss provisions2)	229	307	-25.4%	133	72.2%	362	571	-36.6%
Underlying result before tax	1,992	2,009	-0.8%	1,652	20.6%	3,644	3,195	14.1%
Taxation	565	569	-0.7%	456	23.9%	1,022	898	13.8%
Non-controlling interests	23	23	0.0%	21	9.5%	44	39	12.8%
Underlying net result	1,403	1,417	-1.0%	1,175	19.4%	2,578	2,259	14.1%
Special items after tax	0	0		0		0	-13
Net result Insurance Other	-32	-58		-32		-64	-136
Net result from continuing operations	1,371	1,359	0.9%	1,143	19.9%	2,514	2,110	19.1%
Net result from discontinued operations	0	-64		0		0	442
Net result ING Group	1,371	1,295	5.9%	1,143	19.9%	2,514	2,552	-1.5%
Net result per share (in EUR)	0.35	0.33		0.29		0.65	0.66
Capital ratios (end of period)
ING Group shareholders' equity (in EUR billion)				51	-2.1%	50	49	1.2%
ING Group common equity Tier 1 ratio fully loaded3)				14.5%		14.5%	13.1%
ING Group common equity Tier 1 ratio phased in				14.5%		14.5%	13.2%
Customer lending/deposits (end of period, in EUR billion)
Residential mortgages				283.6	-0.4%	282.4	281.1	0.5%
Other customer lending				283.1	0.7%	285.0	270.6	5.3%
Customer deposits				533.7	-0.1%	533.2	512.8	4.0%
Profitability and efficiency
Underlying interest margin	1.51%	1.50%		1.52%		1.51%	1.50%
Underlying cost/income ratio	51.0%	49.1%		59.4%		55.1%	56.4%
Underlying return on equity on IFRS-EU equity4)	11.7%	11.6%		9.6%		10.6%	9.3%
Employees (internal FTEs, end of period)				51,464	-0.2%	51,342	51,833	-0.9%
Four-quarter rolling average key figures
Underlying interest margin	1.52%	1.48%		1.52%
Underlying cost/income ratio	53.6%	57.9%		53.1%
Underlying return on equity on IFRS-EU equity4)	10.8%	8.8%		10.8%
Risk
Non-performing loans/total loans (end of period)				2.0%		2.1%	2.3%
Stock of provisions/provisioned loans (end of period)				39.9%		39.7%	40.9%
Underlying risk costs in bps of average RWA	30	39		17		23	36
Risk-weighted assets (end of period, in EUR billion)				309.8	0.2%	310.3	319.1	-2.8%

1) Regulatory costs represent bank taxes and contributions to the deposit guarantee schemes ('DGS') and the (European) single resolution fund ('SRF'). 2) The amount presented in 'Addition to loan loss provisions' (which is equivalent to risk costs) includes write-off s and recoveries on loans and receivables not included

in the stock of provision for loan losses.

3) Interim profi t not included in CET1 capital in 1H17 amounting to EUR 1,706 million (1H16: EUR 2,552 million; 1Q17: EUR 2,482 million). 4) Annualised underlying net result divided by average IFRS-EU shareholders' equity excluding declared dividend and interim profi t not included in CET1 capital as from 1Q2017.

Note: Underlying fi gures are non-GAAP measures. These are derived from fi gures according to IFRS-EU by excluding the impact from divestments, special items, Insurance Other, and discontinued operations. See the Appendix for a reconciliation between GAAP and non-GAAP fi gures.

ING recorded strong second-quarter 2017 results, primarily driven by continued business volume growth at resilient interest margins, higher commission income and a one-time gain on the sale of an equity stake. The net result rose to EUR 1,371 million from EUR 1,295 million in the second quarter of 2016, which included a EUR -64 million net result from the discontinued operations of NN Group. The net result from continuing operations rose 0.9% to EUR 1,371 million from a very strong second quarter of 2016, which was supported by a EUR 200 million one-time gain on the sale of Visa shares. Risk costs increased to more normalised levels as there were fewer releases than in the previous quarter, but they stayed well below our through-thecycle guidance of 40-45 basis points. ING Group's fully loaded CET1 ratio remained unchanged at 14.5%, as we again reserved EUR 0.9 billion of the net profi t for future dividend payments as we did in the fi rst quarter.

The underlying net result, defi ned as the net result from continuing operations excluding special items after tax and excluding the result on warrants on NN Group and Voya shares, declined slightly to EUR 1,403 million from EUR 1,417 million in the second quarter of 2016, which included the Visa gain. The underlying return on ING Group's IFRS-EU equity rose to 11.7% from 9.6% in the fi rst quarter of 2017, which was impacted by seasonally high regulatory costs. On a four-quarter rolling basis, the underlying return on equity remained stable at 10.8%.

Commercial performance was again robust in the second quarter of 2017: At comparable FX rates and excluding Bank Treasury, ING grew net core lending by EUR 6.4 billion and attracted EUR 5.3 billion of net customer deposits despite aggressive competition in some of our markets. Operating expenses remained under control, supported by the benefi ts from ongoing cost-saving initiatives; but they were higher, mainly due to a legal provision related to a discontinued business. The second quarter C/I ratio was 51.0%, whereas the four-quarter rolling average C/I ratio increased slightly to 53.6%. Sequentially, underlying net result rose 19.4%, predominantly due to lower regulatory costs. Net interest income and commission income were also up, driven by commercial growth.

Underlying results

The strong second-quarter 2017 underlying result before tax of EUR 1,992 million was mainly attributable to continued loan growth at resilient interest margins and higher commission income. Furthermore, results were supported by a one-time gain on the sale of an equity stake from the real estate run-off portfolio and relatively low risk costs. Regulatory expenses were EUR 69 million and broadly in line with a year ago, but they were substantially lower than the EUR 474 million recorded in the fi rst quarter of 2017. Risk costs were EUR 229 million, or 30 basis points of average riskweighted assets. Year-on-year the underlying result before tax declined marginally by 0.8%, as the year-ago quarter was supported by the gain on the sale of Visa shares. Compared with the fi rst quarter of 2017, the underlying result before tax rose 20.6%; this is largely explained by the aforementioned impact from regulatory expenses.

Total underlying income

Total underlying income was resilient at EUR 4,532 million compared with EUR 4,547 million a year ago. The second quarter of 2016 included a one-time EUR 200 million gain on the sale of Visa shares, whereas the current quarter included a EUR 97 million one-off gain on the sale of an equity stake from the real estate run-off portfolio. Excluding both of these items, income rose 2.0% year-on-year. The increase was supported by a 2.8% rise in net interest income, which largely refl ects volume growth in both customer lending and deposits, and a 17.0% increase in net commission income, which was visible in most segments and products. When excluding the one-off gains, investment and other income declined by EUR 109 million, or -23.2%. This decline was mainly recorded in Financial Markets (compared with the very strong quarter in the prior year) and the Corporate Line (which included the release of a hedge reserve in the second quarter of 2016).

Compared with the fi rst quarter of 2017, total underlying income rose by EUR 136 million, or 3.1%. Apart from the EUR 97 million one-off gain in the real estate run-off portfolio, the increase was supported by most segments. Financial Markets revenues declined, mainly due to a negative swing in credit and debt valuation adjustments (CVA/DVA), but the underlying income was resilient considering low volatility in the markets. Total CVA/DVA impacts in Wholesale Banking and the Corporate Line were EUR -42 million in the second quarter of 2017 compared with EUR -54 million one year ago and EUR 30 million of positive impacts in the fi rst quarter of 2017. Retail Germany revenues were slightly lower due to lower Bank Treasury results and lower mortgage prepayment fees, more than off setting the impact from a higher margin on savings after the core rate adjustment in March.

Total customer lending rose by EUR 0.7 billion in the second quarter of 2017 to EUR 567.4 billion, as volume growth was largely off set by negative currency impacts. However, adjusted for currency impacts and excluding Bank Treasury

and the run-off portfolios, net growth in the core lending book of Retail and Wholesale Banking was EUR 6.4 billion. Second-quarter net core lending growth was well diversifi ed across Retail and Wholesale Banking. Residential mortgages increased by EUR 1.7 billion, as a further decline in Retail Netherlands was more than off set by mortgage growth in most other countries. Other net core lending grew by EUR 4.7 billion, of which EUR 2.7 billion was in Retail Banking. In Wholesale Banking, other net core lending grew by EUR 2.0 billion and was largely attributable to Industry Lending.

Customer deposits decreased slightly by EUR 0.5 billion to EUR 533.2 billion in the second quarter of 2017. The net growth of customer deposits in Retail and Wholesale Banking (excluding a decline in Bank Treasury and adjusted for currency impacts) was EUR 5.3 billion. Retail Banking generated a net infl ow of EUR 8.1 billion, with growth in all segments. In Wholesale Banking, net customer deposits declined by EUR 2.8 billion.

Underlying net interest income rose 2.8% to EUR 3,359 million from EUR 3,267 million in the second quarter of 2016. Net interest income excluding Financial Markets increased by 3.2% in the same period. Net interest income on customer lending activities rose, driven by higher volumes in both mortgages and other customer lending, but the increase was partly off set by a lower overall lending margin. The interest result on customer deposits declined slightly compared with a year ago as volume growth was more than off set by margin pressure on both savings and current accounts due to lower reinvestment yields. The development of the interest result was furthermore supported by higher interest results from Bank Treasury activities and the Corporate Line. The net interest income at Financial Markets, which is volatile in nature, declined by EUR 10 million year-on-year. Compared with the fi rst quarter of 2017, total net interest income increased slightly by 0.2%, as higher interest results in the Retail Growth Markets as well as in the Corporate Line outpaced small declines in most other segments. Excluding Financial Markets, the net interest income increased 0.9% sequentially.

Interest result (in EUR million) and interest margin (in %)

The second-quarter 2017 underlying net interest margin was 1.51% compared with 1.52% in the fi rst quarter of 2017, due to a one-basis-point negative impact from the lower interest result in Financial Markets. Sequentially, the interest margin on lending activities narrowed somewhat, especially in Retail Banking. The interest margin on savings and current accounts improved slightly due to a further lowering of client savings rates in a number of countries, which off set the negative impact from the low interest rate environment. In the second quarter of 2017, client savings rates were reduced further in the Netherlands, Italy, France and Australia.

Net commission income rose 17.0% to EUR 714 million from EUR 610 million in the second quarter of 2016. The increase was recorded in all segments and products, with the relatively strongest growth in Retail Challengers & Growth Markets. Compared with the fi rst quarter of 2017, commission income grew by EUR 32 million, or 4.7%, predominantly in Financial Markets and the Retail Growth Markets.

Investment income fell to EUR 43 million from EUR 172 million in the second quarter of 2016, which had been supported by EUR 163 million of gains on the sale of Visa shares related to ING's direct memberships in Visa Europe. Compared with the fi rst quarter of 2017, investment income was EUR 5 million lower.

Other income declined to EUR 415 million from EUR 498 million in the second quarter of 2016. The current quarter included a EUR 97 million one-off gain on the sale of an equity stake from the real estate run-off portfolio, whereas the year-ago quarter included EUR 38 million of gains on the sale of Visa shares related to ING's indirect memberships in Visa Europe. Excluding both of these items, other income declined by EUR 143 million, mainly in the Corporate Line, which benefi ted from the release of a hedge reserve in the year-ago quarter, as well as lower revenues from Financial Markets and Bank Treasury-related items. Sequentially, other income rose by EUR 101 million, primarily due to the aforementioned one-off gain in the real estate run-off portfolio.

Operating expenses

Underlying operating expenses increased by EUR 80 million, or 3.6%, compared with the second quarter of 2016. Regulatory expenses were EUR 69 million, which is EUR 6 million lower than a year ago and supported by a downward adjustment of the 2017 contribution to the Belgian deposit guarantee scheme. Expenses excluding regulatory costs rose by EUR 86 million, or 3.9%, to EUR 2,242 million, mainly due to a legal provision in Wholesale Banking Luxembourg related to a business that was discontinued around the year 2000, as well as higher expenses in Retail Challengers & Growth Markets and Wholesale Banking's Industry Lending to support business growth. Cost savings and favourable currency impacts compensated for the impact of the one-off s recorded in the second quarter of 2016 (which had mainly been related to the EUR 137 million addition to the provision for Dutch SME and Real Estate Finance clients with interest rate derivatives, additional restructuring costs in Retail Netherlands and the EUR -116 million expense adjustment in Belgium).

Compared with the fi rst quarter of 2017, expenses dropped by EUR 300 million, or 11.5%. This decline was fully attributable to the seasonality in regulatory costs, which dropped to EUR 69 million from EUR 474 million in the fi rst quarter of 2017, as ING is required to recognise certain annual charges (such as contributions to the European single resolution fund and bank taxes in Belgium) in full in the fi rst quarter of the year. Expenses excluding regulatory costs increased by EUR 105 million, or 4.9%, mainly due to the aforementioned legal provision in Wholesale Banking as well as higher expenses in Retail Benelux.

ING's second-quarter underlying cost/income ratio was 51.0% compared with 49.1% one year ago and 59.4% in the previous quarter. On a four-quarter rolling basis, which reduces the seasonal impact of the regulatory costs, the underlying cost/income ratio improved to 53.6% from 57.9% one year ago, but was slightly higher than the 53.1% in the previous four-quarter rolling period.

The total number of internal staff declined in the second quarter by 122 FTEs to 51,342 FTEs at the end of June 2017. Declines in internal staff were mainly recorded in the Benelux, Turkey and France. They were partly off set by FTE increases in the other Challengers & Growth Markets and in the international network of Wholesale Banking in order to support commercial growth.

Addition to loan loss provisions

ING recorded EUR 229 million of risk costs in the second quarter of 2017, down from EUR 307 million a year ago, but up from EUR 133 million in the previous quarter. The increase compared with the fi rst quarter was mainly caused by lower releases.

Net additions to loan loss provisions in Wholesale Banking were EUR 135 million, up slightly from EUR 123 million in the second quarter of 2016, but signifi cantly higher than the EUR 35 million recorded in the previous quarter. The increase compared with the fi rst quarter of 2017 was mainly caused by higher risk costs for some larger fi les in Structured Finance, combined with lower releases, whereas the net additions for the Italian lease run-off book remained at a high level.

Risk costs in Retail Netherlands declined further in line with improved macroeconomic conditions and positive momentum in the Dutch housing market. Second-quarter risk costs were EUR 12 million compared with EUR 17 million in the previous quarter and EUR 50 million in the second quarter of 2016. In Retail Belgium, risk costs were EUR 13 million, which is also substantially lower than in previous quarters. Net additions in the Retail Challengers & Growth Markets were EUR 68 million, down from EUR 77 million one year ago, but up from EUR 45 million in the previous quarter, which benefi ted from a release due to a model update for mortgages in Italy.

Addition to loan loss provisions (in EUR million)

The non-performing loan (NPL) ratio of ING Group was 2.1% compared with 2.0% at the end of March 2017. Total second-quarter risk costs were 30 basis points of average risk-weighted assets (RWA) versus 17 basis points in the fi rst quarter of 2017 and 39 basis points in the second quarter of 2016, which is well below ING's through-the-cycle guidance range for risk costs of 40-45 basis points of average RWA.

Underlying result before tax

ING's second-quarter 2017 underlying result before tax was EUR 1,992 million, down slightly from EUR 2,009 million one year ago, as lower risk costs compensated for higher expenses, while income was almost stable compared with the second quarter of 2016. Quarter-on-quarter, the underlying result before tax rose 20.6%, predominantly due to lower regulatory costs. Net interest income and commission income were also up, driven by commercial growth.

Underlying net result

ING's underlying net result amounted to EUR 1,403 million, slightly lower than the EUR 1,417 million in the second quarter of 2016, but up 19.4% from EUR 1,175 million in the fi rst quarter of 2017. The eff ective underlying tax rate was almost stable at 28.4% compared with 28.3% a year ago, and slightly higher than 27.6% in the previous quarter.

Segment Reporting: Retail Banking Consolidated Results

Net result ING Group

ING Group's second-quarter net result increased to EUR 1,371 million from EUR 1,295 million in the second quarter of 2016 and EUR 1,143 million in the fi rst quarter of 2017. The net result of ING Group also includes the net result from Insurance Other (included under continuing operations) and – when applicable - special items after tax and the net result from discontinued operations.

In the second quarter of 2017, ING Group's net result from Insurance Other recorded a loss of EUR 32 million. The loss refl ects a lower valuation of warrants on Voya and NN Group shares compared with the end of March 2017, as well as the result on the sale of 6.5 million warrants on Voya shares in June 2017. In the year-ago quarter, the lower valuation of warrants on NN Group and Voya shares resulted in a loss of EUR 58 million. This was followed by profi ts of EUR 12 million and EUR 158 million in the third and fourth quarters of 2016, respectively, due to higher valuations, whereas the fi rst quarter of 2017 included a loss of EUR 32 million on the valuation of the warrants.

At the end of June 2017, ING Group held warrants for approximately 35 million shares in NN Group at an exercise price of EUR 40.00 per share, and warrants for almost 20 million shares in Voya at an exercise price of USD 48.75 per share. The combined book value of these warrants was EUR 103 million at quarter-end.

In the fi rst two quarters of 2017, there were no special items. In 2016, special items after tax were only recorded in the fi rst quarter (EUR -13 million, related to older restructuring programmes in Retail Netherlands) and in the fourth quarter of the year (EUR -787 million, fully related to the transformation programmes as announced at ING's Investor Day in October 2016).

Currently, there are no discontinued operations. In the second quarter of 2016, ING Group recorded a net result of EUR -64 million on the discontinued operations of NN Group, predominantly refl ecting the loss on the sale of ING's fi nal 14.1% stake in NN Group on 14 April 2016.

In the second quarter of 2017, ING Group's underlying return on IFRS-EU equity was 11.7%. This is in line with the reported 11.6% over the second quarter of 2016, but up strongly from 9.6% in the previous quarter, which was negatively aff ected by seasonally high regulatory costs charged in the fi rst quarter. On a four-quarter rolling basis, which eliminates this timing impact, the underlying return on ING Group's average IFRS-EU equity improved to 10.8% from 8.8% one year ago, and was stable compared with the previous fourquarter rolling period. With eff ect from the end of the fi rst quarter of 2017, ING Group's return on equity is calculated using IFRS-EU shareholders' equity after excluding 'interim profi t not included in CET1 capital'. As of 30 June 2017, this amounted to EUR 1,706 million, or two-thirds of the dividend paid over 2016, following ING's decision to reserve one-third

of the aggregate prior-year dividend in each of the fi rst three quarters of the fi nancial year.

Return on equity ING Group (in %)

ING Group's net result per share was EUR 0.35 in the second quarter of 2017, based on an average number of shares outstanding of 3,884 million during the quarter.

Dividend

ING will pay an interim cash dividend of EUR 0.24 per ordinary share over the fi rst half of 2017. This is equal to the interim dividend paid over the fi rst half of 2016. ING is committed to maintaining a CET1 ratio above the prevailing fully loaded requirement, currently estimated to be 11.8%, plus a comfortable management buff er to accommodate for factors such as Pillar 2 Guidance. ING aims to pay a progressive dividend over time. The Board's fi nal dividend proposal will be made at year-end and will refl ect considerations including expected future capital requirements, growth opportunities available to the Group, net earnings, and regulatory developments.

Other events

On 1 August 2017, ING annouced that it will redeem a USD 0.5 billion Additional Tier 1 instrument in September 2017.

Segment Reporting: Retail Banking

					2Q2016

					505
					96
					6
					91
1,770	1,778	1,117	1,080	654	698
870	927	520	697	350	231
5	18	19	8	-13	9
875	945	539	705	336	240
895	833	578	375	317	458
25	107	12	50	13	57
870	726	565	325	304	401

154.2	159.6	117.4	124.8	36.9	34.8
78.8	77.8	36.8	37.5	42.0	40.3
221.0	219.2	138.3	137.2	82.7	82.0

49.4%	53.2%	48.3%	65.3%	51.4%	34.4%
25.2%	19.6%	29.0%	14.9%	19.7%	27.7%
					8,701

					70
85.5	86.5	50.7	53.6	34.8	32.9
	2Q2017 1,359 265 20 126 17,137 12	Retail Benelux 2Q2016 1,413 228 17 120 17,972 49	2Q2017 889 150 5 73 8,750 10	Netherlands 2Q2016 908 132 11 29 9,271 37	Belgium 2Q2017 470 115 16 53 8,387 15

1) Key fi gures based on underlying fi gures. 2) Underlying after-tax return divided by average equity based on 12.0% CET1 ratio (annualised).

Retail Benelux

"As previously announced, we reached an agreement with the trade unions in March regarding a social plan related to our transformation plan in Belgium. Since then, we have initiated many processes to lay the foundation for our integrated banking platform in the Netherlands and Belgium. We are convinced that our digital transformation in Market Leaders is the right way forward to deliver a diff erentiating customer experience by using one brand, one set of product off erings, one customer approach and one integrated network of systems.

I am delighted to see our colleagues collaborating to make our digital transformation a reality, while continuing to place their highest priority on our customers. Positive business momentum was visible in Belgium with higher lending volumes and commission income. Despite the low interest rate environment, pre-tax result in Belgium rose 10.1% from the second quarter of 2016, excluding one-off items recorded in that quarter. In the Netherlands, the lending mix improved sequentially as business lending volumes gained pace. The pre-tax result of the Netherlands was up 73.8% year-on-year, mainly as expenses fell due to last year's one-off s, while income was resilient."

Roland Boekhout, Member Management Board Banking, Head of Market Leaders

Retail Netherlands

The second-quarter underlying result before tax of Retail Netherlands was EUR 565 million, up 73.8% from the second quarter of 2016 and 18.4% higher than in the previous quarter. Income was resilient versus a year ago due to higher margins on savings accounts and higher Bank Treasury revenues, which largely off set the impact of lower lending volumes. Underlying expenses were EUR 166 million lower than a year ago, mainly refl ecting one-off impacts (including additional redundancy provisions and a EUR 117 million specifi c provision taken for the SME segment in the second quarter of 2016) and benefi ts from cost-saving programmes coming through. Risk costs further improved: they fell to 10 basis points of average risk-weighted assets, refl ecting positive economic conditions in the Netherlands. The return on equity, based on a 12% common equity Tier 1 ratio, rose to 29.0% for the quarter.

Total underlying income increased 3.4% year-on-year to EUR 1,117 million. The increase was mainly attributable to higher income from savings accounts and Bank Treasury,

Segment Reporting: Retail Banking

which more than off set the impact from lower volumes in mortgages (due to customers' repayments and run-off in the WUB portfolio) and lower margins in business lending. The margin pressure on current accounts was off set by higher fee income.

Customer lending increased by EUR 0.6 billion in the second quarter to EUR 154.2 billion, of which EUR 1.6 billion was in Bank Treasury-related items and EUR -0.7 billion in the WUB run-off portfolio. Excluding these items, net core lending decreased by EUR 0.3 billion, as EUR 0.4 billion of other lending growth was more than off set by a EUR 0.7 billion decrease in mortgages. Net customer deposits (excluding Bank Treasury) grew by EUR 3.1 billion.

Underlying operating expenses fell 23.5% from a year ago to EUR 539 million. The decline in expenses was mainly caused by one-off s in the second quarter of 2016 (a EUR 117 million provision for potential compensation to Dutch SME clients with interest rate derivatives and some additional redundancy provisions), but was also supported by benefi ts coming through from the ongoing cost-saving initiatives. Sequentially, expenses declined 7.4%, due to lower regulatory costs. Excluding regulatory costs, expenses were up 4.8%, mainly due to higher IT expenses and some smaller one-off items.

Second-quarter 2017 risk costs decreased to EUR 12 million, or 10 basis points of average risk-weighted assets, compared with EUR 50 million one year ago and EUR 17 million in the previous quarter. Risk costs are low for both mortgages and business lending, refl ecting the positive macroeconomic conditions in The Netherlands.

Risk-weighted assets increased by EUR 3.8 billion in the second quarter of 2017 to EUR 50.7 billion, mainly refl ecting a model update for Dutch mortgages. The increase was partly off set by positive risk migration in both the mortgage and business lending portfolios.

Retail Belgium

Retail Belgium, including Luxembourg, posted a strong second-quarter 2017 underlying result before tax of EUR 304 million, despite continued margin pressure. The positive business momentum was refl ected in higher lending volumes and higher commission income, both year-on-year and sequentially. The underlying result before tax was EUR 97 million lower than in the second quarter of 2016, which had benefi ted from a EUR -95 million one-off procured cost savings and a EUR 30 million gain on the sale of Visa shares. Excluding the one-off items, the pre-tax result rose by EUR 28 million, or 10.1%, mainly due to lower risk costs. Sequentially, the underlying result before tax was EUR 231 million higher than in the fi rst quarter, predominantly due to lower regulatory costs and lower risk costs. The return on equity, based on a 12% common equity Tier 1 ratio, rose to 19.7% for the quarter.

Total underlying income was EUR 654 million, or 6.3% lower than a year ago, mainly due to the EUR 30 million Visa gain in the second quarter of 2016. Excluding this gain, income decreased 2.1%, mainly because of margin compression on customer deposits due to the low interest rate environment, as well as lower prepayment and renegotiation fees on mortgages. Compared with the fi rst quarter of 2017, underlying income rose 1.4%, driven by higher investment income, while commission income remained at the same high level. Net interest income declined slightly as higher business volumes did not fully compensate for the impact from margin pressure. A further decline in savings margins is expected, as customer savings rates have already reached the legal fl oor in Belgium.

Underlying operating expenses were EUR 336 million, up 40.0% from a year ago, as the second quarter of 2016 had included a one-off procured cost savings of EUR -95 million. Excluding the expense adjustment, expenses increased 0.3% year-on-year. Sequentially, expenses decreased 37.3% due to lower regulatory costs as the full-year contributions to the European single resolution fund, the Belgian deposit guarantee scheme (DGS) and Belgian bank taxes were recorded in full in the fi rst quarter of 2017. The second quarter of 2017 included a downward adjustment of the DGS contribution. Excluding regulatory costs, expenses increased 2.9% sequentially, mainly due to accelerated depreciation for the branch network related to the announced transformation programme.

Customer lending increased by EUR 1.3 billion in the second quarter to EUR 78.8 billion. Net core lending, which excludes Bank Treasury products, grew by EUR 1.2 billion, of which EUR 0.7 billion was in mortgages and EUR 0.5 billion in other customer lending. Customer deposits increased by EUR 1.9 billion to EUR 82.7 billion, with infl ows primarily in current accounts.

Second-quarter 2017 risk costs were EUR 13 million, or 15 basis points of average risk-weighted assets, compared with EUR 57 million a year ago and EUR 36 million in the previous quarter. The decline was mainly due to lower risk costs in business lending.

Risk-weighted assets in the second quarter of 2017 decreased by EUR 0.2 billion to EUR 34.8 billion.

Segment Reporting: Retail Banking

Retail Challengers & Growth Markets: Consolidated profi t or loss account
	Retail Challengers & Growth Markets		Germany		Other
In EUR million	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Profit or loss
Net interest income	1,013	920	405	408	607	512
Net commission income	154	110	51	42	103	69
Investment income	18	139	0	44	18	95
Other income	18	78	-2	14	20	63
Total underlying income	1,203	1,247	455	508	748	740
Expenses excl. regulatory costs	623	567	222	200	401	367
Regulatory costs	55	54	15	15	40	39
Operating expenses	679	621	237	215	441	406
Gross result	525	627	218	293	307	334
Addition to loan loss provisions	68	77	5	14	63	63
Underlying result before tax	457	550	214	279	243	271
Customer lending/deposits (end of period, in EUR billion)1)
Residential mortgages	127.2	120.1	69.3	67.4	57.9	52.7
Other customer lending	35.9	33.0	11.0	10.3	24.9	22.7
Customer deposits	250.2	232.9	132.8	123.6	117.3	109.4
Profitability and efficiency1)
Cost/income ratio	56.4%	49.8%	52.1%	42.3%	59.0%	54.9%
Return on equity based on 12.0% common equity Tier 12)	14.8%	18.8%	19.6%	27.1%	12.4%	14.5%
Employees (internal FTEs, end of period)	22,617	22,427	4,645	4,392	17,972	18,035
Risk1)
Risk costs in bps of average RWA	37	42	7	23	51	51
Risk-weighted assets (end of period, in EUR billion)	74.2	74.2	24.5	25.1	49.7	49.0

1) Key fi gures based on underlying fi gures. 2) Underlying after-tax return divided by average equity based on 12.0% CET1 ratio (annualised).

Retail Challengers & Growth Markets

"In the second quarter of 2017, Retail Challengers & Growth Markets maintained strong momentum in acquiring new clients, particularly in Australia and Germany. We grew our total customer base by 300,000 to 25.9 million customers, of which almost fi ve million are primary relationships. This strong commercial performance is a testament to our ability to deliver a diff erentiating customer experience in today's fast-paced digital banking environment.

I am pleased that – despite the diffi cult interest rate environment – Retail Challengers & Growth Markets continued to maintain its positive trend in interest income growth, recording 10% growth year-on-year. Our strategic focus on income diversifi cation is yielding strong results and we grew fee income by 40% compared with a year ago.

Looking ahead, we will remain focused on optimising the cost base and delivering on our Think Forward priorities, while working on the transformation in fi ve of our Challengers countries towards a Model Bank."

Aris Bogdaneris, Member Management Board Banking, Head of Challengers & Growth Markets

Retail Germany

The second-quarter 2017 underlying result before tax of Retail Germany, including Austria, was EUR 214 million, down from EUR 279 million in the second quarter of 2016. The decrease was largely attributable to the one-time gain on the sale of Visa shares realised a year ago (EUR 44 million), whereas the current quarter included higher expenses from investments in Project Welcome and higher staff costs to support business growth. Compared with the fi rst quarter of 2017, the result before tax increased by EUR 29 million. The increase was mainly driven by lower regulatory expenses, which were only slightly off set by lower income and higher risk costs. Business momentum remained strong as ING Germany grew the number of primary customers by more than 50,000 in the quarter. The return on equity, based on a 12% common equity Tier 1 ratio, was a healthy 19.6% for the quarter.

Segment Reporting: Wholesale Banking Retail Banking

Total underlying income was EUR 455 million, down 10.4% from the second quarter of 2016, which included a EUR 44 million one-time gain on the sale of Visa shares. Excluding the Visa gain, total income was down 1.9% year-on-year, mainly due to negative hedge ineff ectiveness results and lower margins on savings and deposits. Commission income grew by 21.4%. Compared with the fi rst quarter of 2017, total income decreased 1.7% due to lower Bank Treasury revenues related to the low interest rate environment. Although the margin on savings and deposits improved after the adjustment of the core savings rate in March, net interest income for Retail Germany declined mainly due to the impact of Bank Treasury and lower mortgage prepayment fees. This was partly off set by continued volume growth.

Total customer lending rose by EUR 0.8 billion in the second quarter of 2017 to EUR 80.3 billion. Net core lending, which excludes Bank Treasury products, increased by EUR 0.9 billion, of which EUR 0.6 billion was attributable to residential mortgages and EUR 0.3 billion to consumer lending. Customer deposits, excluding Bank Treasury, recorded net growth of EUR 1.1 billion in the quarter.

Operating expenses rose 10.2% from a year ago to EUR 237 million. Excluding regulatory costs, operating expenses were EUR 222 million, up 11.0% year-on-year. The increase was mainly attributable to higher headcount to support business growth, higher costs related to the acquisition of primary customers, and investments in Project Welcome, which aims to digitise Germany's banking platform further and open it up to third-party product providers as well. Compared with the previous quarter, expenses excluding regulatory costs decreased 1.3%.

Risk costs were EUR 5 million compared with EUR 14 million in the second quarter of 2016 and EUR 2 million in the fi rst quarter of 2017. Second-quarter 2017 risk costs were low at 7 basis points of average risk-weighted assets, refl ecting the benign credit environment in Germany.

Risk-weighted assets rose by EUR 0.3 billion in the second quarter to EUR 24.5 billion, mainly due to lending growth.

Retail Other Challengers & Growth Markets

The underlying result before tax of Retail Other Challengers & Growth Markets decreased to EUR 243 million from EUR 271 million in the second quarter of 2016. The decrease was mainly attributable to the EUR 109 million one-time gain on the sale of Visa shares that was realised last year. Excluding the Visa gain, the underlying result before tax increased by EUR 81 million, refl ecting business and revenue growth in most countries, partly off set by higher expenses to support business growth. Compared with the fi rst quarter of 2017, which included a EUR 21 million release in risk costs due to a model update, the underlying result before tax increased by EUR 5 million due to higher income and lower regulatory expenses. The return on equity, based on 12% common equity Tier 1 ratio, was 12.4% in the current quarter.

Total underlying income rose to EUR 748 million from EUR 740 million in the second quarter of 2016. When adjusting for the Visa gain, total income was up by EUR 117 million, or 18.5%. This increase was driven by improved commercial results across most of the countries, refl ecting continued customer and volume growth. Income was furthermore supported by the lowering of core savings rates in Italy, Australia and France in the second quarter of 2017. Compared with the fi rst quarter of 2017, underlying income increased by EUR 19 million, supported by growth in both interest and commission income.

Customer lending grew by EUR 0.3 billion in the second quarter to EUR 82.8 billion. Excluding currency impacts and Bank Treasury, net core lending grew by EUR 2.6 billion and was mainly generated in Poland, Australia, Spain and Turkey. Of the total growth, EUR 1.1 billion was in mortgages and EUR 1.5 billion in other lending. Net customer deposits, excluding currency impacts and Bank Treasury, increased by EUR 2.0 billion, primarily refl ecting net infl ows from customers in Australia and Spain.

Operating expenses rose by EUR 35 million, or 8.6%, year-onyear to EUR 441 million. Excluding regulatory costs, operating expenses were EUR 401 million, up 9.3% year-on-year. This was due to higher marketing and staff expenses in most of the countries to support business growth, as well as higher investments related to strategic projects. Compared with the fi rst quarter of 2017, operating expenses excluding regulatory costs increased 0.8%.

Risk costs remained stable at EUR 63 million compared with the second quarter of 2016. On a sequential basis, they increased by EUR 20 million as fi rst-quarter 2017 risk costs included a release of EUR 21 million to refl ect model updates for mortgages in Italy.

Risk-weighted assets increased by EUR 1.1 billion in the second quarter of 2017 to EUR 49.7 billion, mainly refl ecting lending volume growth and model updates, partly off set by currency impacts and a lower value of our stake in Bank of Beijing.

Segment Reporting: Wholesale Banking

Wholesale Banking: Consolidated profi t or loss account
	Total Wholesale Banking		Industry Lending		General Lending & Transaction Services		Financial Markets		Bank Treasury & Other
In EUR million	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Profit or loss
Net interest income	941	902	549	520	284	250	66	76	42	56
Net commission income	297	273	156	150	103	95	39	29	-1	-2
Investment income	11	15	1	-2	0	0	0	2	10	15
Other income excl. CVA/DVA	378	338	10	9	9	10	218	272	141	47
Underlying income excl. CVA/DVA	1,627	1,528	716	678	396	354	323	379	192	117
CVA/DVA	-39	-57					-39	-57
Total underlying income	1,588	1,471	716	678	396	354	285	322	192	117
Expenses excl. regulatory costs	667	587	174	157	190	185	220	219	84	26
Regulatory costs	7	2	0	-1	1	5	2	-12	4	11
Operating expenses	675	590	174	156	191	191	222	207	88	37
Gross result	914	881	542	522	205	164	63	115	104	80
Addition to loan loss provisions	135	123	94	60	5	50	1	-1	36	14
Underlying result before tax	778	758	448	462	200	114	63	116	68	66
Customer lending/deposits (end of period, in EUR billion)1)
Residential mortgages	1.0	1.4	0.0	0.0	0.0	0.0	0.0	0.0	1.0	1.4
Other customer lending	170.2	159.1	110.8	106.0	51.0	44.7	1.1	1.3	7.3	7.1
Customer deposits	62.4	60.8	1.6	1.3	47.4	45.4	5.0	4.9	8.4	9.2
Profitability and efficiency1)
Cost/income ratio	42.5%	40.1%	24.4%	23.0%	48.2%	53.8%	77.8%	64.2%	45.8%	31.4%
Return on equity based on 12.0% common equity Tier 12)	12.7%	10.8%	16.5%	18.7%	10.5%	6.4%	4.9%	8.3%	16.0%	-9.1%
Employees (internal FTEs, end of period)	11,586	11,431
Risk1)
Risk costs in bps of average RWA	36	32	54	38	4	45	1	-1	148	51
Risk-weighted assets (end of period, in EUR billion)	148.0	153.7	68.0	64.7	45.8	45.8	24.6	32.4	9.6	10.8

1) Key fi gures based on underlying fi gures. 2) Underlying after-tax return divided by average equity based on 12.0% CET1 ratio (annualised).

"We maintained positive business momentum in the second quarter, recording EUR 2.0 billion of net core lending growth generated mainly in Industry Lending. Income was strong and refl ected a higher interest result consistent with portfolio growth, and a gain on the sale of an equity stake in the real estate run-off portfolio. This gain off set negative CVA/DVA impacts and a one-off provision for a discontinued business in Luxembourg. Risk costs were 36 basis points of average RWA, which is within our through-the-cycle guidance.

We made further progress on our target operating model objectives by streamlining and centralising various front offi ce processes, which will increase productivity. Our innovation eff orts also continued – using blockchain, we launched a trade matching prototype for FX transactions, which demonstrated how this technology can facilitate faster and more effi cient transactions.

In the previous quarter, we issued the fi rst-ever syndicated loan with an interest rate linked to a company's sustainability rating. We are pleased to have issued similar loans this quarter for our clients, including Barry Callebaut and EDF, as we support their sustainable ambitions."

Isabel Fernandez, Member Management Board Banking, Head of Wholesale Banking

Wholesale Banking Wholesale Banking delivered a solid quarterly underlying profi t before tax of EUR 778 million, up 2.6% on the strong second quarter in 2016. The result refl ects strong performance in General Lending & Transaction Services and Industry Lending, while income in Financial Markets held up despite low volatility. The current second-quarter result included some non-recurring and volatile items (sale of an equity stake, negative CVA/DVA in income and higher legal claims in operating expenses) that largely off set each other. Risk costs for Wholesale Banking, at 36 basis points of average RWA, reverted back to more normalised levels as the impact from releases was smaller than in prior quarters; but risk costs remained below our through-the-cycle guidance of 40-45 basis points. The Wholesale Bank maintained positive business momentum, with EUR 2.0 billion of net core lending growth in the second quarter and a return on equity, based on a 12% common equity Tier 1 ratio, of 12.7%.

Total underlying income was 8.0% higher than in the second

Segment Reporting: Wholesale Banking

quarter of 2016 and 2.8% higher than in the previous quarter. Credit and debt valuation adjustments (CVA/DVA) amounted to EUR -39 million for the current quarter compared with EUR -57 million in the same quarter of last year and EUR 36 million in the fi rst quarter.

Total underlying income excluding CVA/DVA impacts improved 7.7% compared with the fi rst quarter of 2017 and was up 6.5% year-on-year. The year-on-year increase was mainly related to the EUR 97 million gain on the sale of an equity stake in the real estate run-off portfolio and higher revenues from General Lending & Transaction Services and Industry Lending. These factors combined more than compensated for lower Financial Markets results. Sequentially, the income increase was mainly related to the aforementioned equity stake sale and stronger General Lending & Transaction Services revenues.

The interest result grew 4.3% from the second quarter of 2016, as stronger interest results in General Lending & Transaction Services and Industry Lending were only partly off set by lower interest results in Financial Markets and Bank Treasury. On a sequential basis, the interest result was down 1.5% due to lower interest results in Financial Markets and Industry Lending.

Commission income was up 8.8% from the same quarter of last year and up 6.1% from the previous strong quarter. Compared with the second quarter of 2016, commission income increased, mainly in Corporate Finance and General Lending & Transaction Services. Sequentially, stronger commission income was mainly reported in Financial Markets (notably Corporate Finance and Global Capital Markets) and General Lending & Transaction Services.

Investment income declined to EUR 11 million from EUR 15 million in the second quarter of 2016. Compared with the fi rst quarter of 2017, which included the gain on the sale of an equity stake in Corporate Investments, investment income fell by EUR 12 million.

Total other income amounted to EUR 340 million, up from EUR 281 million in the second quarter of 2016 and EUR 287 million in the previous quarter. The increase was mainly due to resilient Financial Markets income and the aforementioned sale of an equity stake in the real estate run-off portfolio. Excluding CVA/DVA impacts, other income was EUR 378 million, or EUR 281 million when excluding the sale of the equity stake.

Operating expenses increased to EUR 675 million from EUR 590 million in the second quarter of 2016. A large part of the increase is explained by a provision for a litigation related to a business that was discontinued in Luxembourg around the year 2000. The remaining year-on-year cost growth was due to higher headcount to support business growth, wage infl ation and a EUR 5 million increase in regulatory costs. Sequentially, operating expenses decreased to EUR 675 million from EUR 698 million in the fi rst quarter of 2017 due to lower regulatory costs. In the current quarter, regulatory expenses were EUR 7 million, while in the previous quarter an amount of

EUR 91 million was recognised, largely related to the annual contributions to the European single resolution fund and to the full-year Belgian bank taxes. Excluding regulatory costs, expenses increased by EUR 59 million, or 9.7%, predominantly due to the aforementioned provision for litigation.

Risk costs for Wholesale Banking amounted to EUR 135 million, or 36 basis points of average RWA, which is higher than the EUR 123 million in the second quarter of 2016 and EUR 35 million in the previous quarter, but below our through-the-cycle guidance of 40-45 basis points. The low risk costs in the fi rst quarter were supported by net releases for larger clients in the Netherlands, Asia and Latin America.

Risk-weighted assets decreased by EUR 3.9 billion in the second quarter to EUR 148.0 billion, mainly refl ecting currency impacts and lower market risk-weighted assets.

Industry Lending

Underlying result before tax - Industry Lending (in EUR million)

Industry Lending posted an underlying result before tax of EUR 448 million, down 3.0% from the second quarter of 2016 due to higher risk costs. Compared with the fi rst quarter of 2017, the underlying result before tax declined 12.3% as a result of higher risk costs.

Income increased 5.6% from the same quarter of last year, driven by continued and robust volume growth in Structured Finance and Real Estate Finance. Portfolio growth, excluding FX eff ects, totalled EUR 6.7 billion year-on-year, of which EUR 4.6 billion was related to Structured Finance and EUR 2.1 billion attributable to Real Estate Finance. In the second quarter of 2017, net core lending grew by EUR 1.5 billion.

Expenses rose 11.5% from the second quarter of 2016, mainly due to personnel-related expenses and investments in business growth. However, expenses decreased 2.2% sequentially as the fi rst quarter of 2017 included EUR 17 million of regulatory costs. Excluding regulatory costs, expenses were up 8.1%.

Risk costs amounted to EUR 94 million and primarily included some larger Structured Finance fi les in Rest of the World. Second-quarter risk costs were up higher than the EUR 60 million in the second quarter of 2016 and EUR 17 million in the previous quarter.

Segment Reporting: Wholesale Banking

General Lending & Transaction Services

Underlying result before tax - General Lending & Transaction Services (in EUR million)

The underlying result before tax from General Lending & Transaction Services was EUR 200 million, up 75.4% from one year ago as a result of stronger income and lower risk costs. Compared with the fi rst quarter of 2017, the underlying result before tax rose 7.0% due to stronger income and lower regulatory expenses.

Income rose 11.9% year-on-year, attributable to almost all products. Both General Lending and Working Capital Solutions income grew due to continued portfolio growth. Stronger income in Payments & Cash Management was primarily the result of higher net interest income as well as increased commissions. Trade Finance Services income grew on the back of a strong increase in committed off -balance assets. Bank Mendes Gans recorded higher income as margins improved along with higher volumes. Sequentially, total income from General Lending & Transaction Services rose 4.5%, driven by the strong performance in most products.

Year-on-year, net customer lending (excluding currency eff ects) grew by EUR 6.6 billion, of which EUR 1.9 billion was attributable to General Lending and EUR 4.1 billion to Working Capital Solutions. In the second quarter of 2017, net core lending growth was EUR 0.4 billion.

Operating expenses, excluding regulatory costs, increased 2.7% from the second quarter of 2016, mainly refl ecting higher staff -related costs. Sequentially, expenses excluding regulatory costs increased 1.6%.

Risk costs showed a net addition of EUR 5 million for the quarter versus a net addition of EUR 50 million in the second quarter of 2016 and a net release of EUR 13 million in the previous quarter.

Financial Markets

Financial Markets posted an underlying result before tax of EUR 63 million, down from EUR 116 million in the strong second quarter of 2016 and EUR 98 million in the previous quarter. The result in the current quarter included EUR -39 million of CVA/DVA impacts compared with EUR -57 million of CVA/DVA impacts a year ago and EUR 36 million in the previous quarter.

Income excluding CVA/DVA impacts decreased 14.8% yearon-year, mainly due to lower income in the Equities and Rates businesses. The Rates business was aff ected by the lower volatility in the market. Sequentially, income excluding CVA/DVA impacts was resilient and rose 0.6%, supported by higher income in the Structured Rates, Corporate Finance and Securitisation businesses.

Operating expenses increased 7.2% year-on-year due to higher regulatory expenses. Excluding regulatory costs, expenses increased 0.5% year-on-year, refl ecting higher investments in IT infrastructure. Compared with the fi rst quarter of 2017, expenses decreased 14.0%, due to lower regulatory costs.

Bank Treasury & Other

Underlying result before tax - Bank Treasury & Other (in EUR million)

Bank Treasury & Other recorded an underlying result before tax of EUR 68 million compared with EUR 66 million in the second quarter of 2016 and EUR 17 million in the previous quarter. Total income rose by EUR 75 million to EUR 192 million compared to a year ago. This was mainly caused by the EUR 97 million gain on the sale of an equity stake in the real estate run-off portfolio, partly off set by lower income from Corporate Investments. Bank Treasury income also increased year-on-year due to higher capital gains. Sequentially, total income rose by EUR 88 million.

Operating expenses rose by EUR 51 million year–on–year and by EUR 31 million sequentially, mainly due to a one-off litigation provision related to a discontinued business. Risk costs, predominantly related to the Italian lease run-off portfolio, were EUR 36 million versus EUR 14 million one year ago and EUR 31 million in the fi rst quarter of 2017.

Segment Reporting: Geographical Split Corporate Line Banking

Corporate Line: Consolidated profi t or loss account
In EUR million	2Q2017	2Q2016
Profit or loss
Net interest income	46	31
Net commission income	-2	-1
Investment income	-6	1
Other income	-68	20
Total underlying income	-30	51
Expenses excl. regulatory costs	82	76
Regulatory costs	1	1
Operating expenses	82	76
Gross result	-113	-25
Addition to loan loss provisions	1	0
Underlying result before tax	-113	-25
of which:
Income on capital surplus	23	36
Financing charges	-25	-14
Other Capital Management	35	73
Capital Management excl. DVA	34	95
Bank Treasury excl. DVA	-90	-59
DVA	-3	3
Other excl. DVA	-54	-64

Corporate Line Banking posted an underlying result before tax of EUR -113 million in the second quarter of 2017 compared with EUR -25 million in the same quarter of 2016. The underlying pre-tax result decreased due to lower income and slightly higher expenses. Underlying income fell to EUR -30 million from EUR 51 million one year ago; this was due to higher costs for net investment hedging, negative DVA and a higher income allocation to the business units. Expenses were EUR 6 million higher than a year ago, mainly due to higher fi nancing charges and share-based payments, which were only partly off set by lower shareholder expenses.

The Capital Management-related result, excluding DVA, was EUR 34 million in the second quarter of 2017 compared with EUR 95 million in the same quarter of last year.

Within the Capital Management-related results, income on capital surplus was EUR 23 million compared with EUR 36 million in the second quarter of 2016. The EUR 13 million lower result was due to lower income on capital, higher solvency cost and updated capital benefi t allocations to the business units. The result of Other Capital Management declined to EUR 35 million from EUR 73 million in the same quarter of last year. This decrease was mainly caused by the higher cost of net investment hedging, as well as negative results on equity participations.

Bank Treasury-related results primarily include the isolated legacy costs (mainly negative interest results) due to the replacement of short-term funding with long-term funding during 2012 and 2013. The second-quarter 2017 result amounted to EUR -90 million compared with EUR -59 million one year ago. The result declined mainly due to the positive impact of the release of the TLTRO hedge reserve in the second quarter of 2016. This was only partly compensated by maturing high-cost legacy bonds and the switch to the new TLTRO facility at negative rates, the impact of which was not fully allocated to the business units.

DVA on own-issued debt was EUR -3 million compared with EUR 3 million in the second quarter of 2016. The negative quarterly result was due to some tightening of credit spreads in the second quarter of 2017 versus a widening in the same quarter of the previous year.

The 'Other' result, which comprises items such as overhead costs and non-allocated general and regulatory expenses, improved by EUR 10 million. This was mainly driven by lower charges for supervision by regulators as well as lower shareholder expenses.

Segment Reporting: Geographical Split

Geographical split: Consolidated profi t or loss account
	Netherlands		Belgium		Germany		Other Challengers		Growth Markets		Wholesale Banking Rest of World		Other1)
In EUR million											2Q2017 2Q2016 2Q2017 2Q2016 2Q2017 2Q2016 2Q2017 2Q2016 2Q2017 2Q2016 2Q2017 2Q2016 2Q2017 2Q2016
Profit or loss
Net interest income	1,129	1,136	528	553	522	484	373	354	384	303	376	407	47	31
Net commission income	224	203	148	127	65	61	57	34	88	70	133	114	-2	-1
Investment income	8	29	20	3	0	44	3	11	22	84	-4	-1	-6	1
Other income excl. CVA/DVA	144	92	137	228	3	24	5	28	35	67	102	80	31	33
Underlying income excl. CVA/DVA	1,506	1,459	834	912	590	614	439	427	528	524	608	600	69	65
CVA/DVA 2)	-23	-8	-12	-17	0	0	0	0	0	0	-3	-33	-3	3
Underlying income	1,482	1,452	822	895	590	614	439	427	529	524	604	567	66	68
Expenses excl. regulatory costs	686	886	481	285	250	223	235	202	244	232	261	251	84	77
Regulatory costs	19	7	-13	6	15	14	15	14	31	34	2	-1	1	1
Operating expenses	705	893	468	291	265	237	250	216	275	266	263	250	85	78
Gross result	777	558	354	604	325	376	189	211	253	257	341	318	-19	-10
Addition to loan loss provisions	17	103	19	93	2	16	57	37	57	43	76	15	1	0
Underlying result before tax	760	456	335	512	322	360	132	175	197	214	265	302	-19	-10
Retail Banking	565	325	304	401	214	279	84	102	159	169	0	0	0	0
Wholesale Banking	195	131	30	111	109	81	48	72	37	45	265	302	94	15
Corporate Line	0	0	0	0	0	0	0	0	0	0	0	0	-113	-25
Underlying result before tax	760	456	335	512	322	360	132	175	197	214	265	302	-19	-10
Customer lending/deposits (end of period, in EUR billion)3)
Residential mortgages	118.3	126.0	36.9	34.9	69.4	67.5	49.6	45.3	8.3	7.4	0.0	0.0	0.0	0.0
Other lending	76.9	76.2	57.8	54.6	35.2	27.7	26.6	24.6	27.6	26.2	60.8	60.5	0.1	0.8
Customer deposits	164.5	162.2	98.0	97.7	133.8	124.4	88.9	82.6	34.0	32.4	14.5	13.7	-0.3	-0.2
Profitability and efficiency3)
Cost/income ratio	47.6%	61.5%	56.9%	32.5%	45.0%	38.7%	57.0%	50.5%	52.0%	50.8%	43.5%		44.0% 128.1% 114.6%
Return on equity based on 12.0% common equity Tier 14)	23.4%	12.7%	14.1%	22.7%	19.2%	25.3%	10.3%	15.7%	11.5%	12.6%	10.0%	8.2%	-10.0%	17.1%
Employees (internal FTEs, end of period) 12,306		12,672	9,875	10,347	4,952	4,673	4,153	4,009	15,782	16,119	4,267	4,007	8	7
Risk3)
Risk costs in bps of average RWA	8	45	15	73	3	19	77	55	52	38	48	9	7	0
Risk-weighted assets (end of period, in EUR billion)	82.5	89.8	51.6	51.3	38.0	34.7	29.7	26.4	43.9	46.1	61.5	65.8	3.0	5.1

1) Region Other consists of Corporate Line and Real Estate run-off portfolio. 2) CVA/DVA reported within Wholesale Banking and Corporate Line.

3) Key fi gures based on underlying fi gures. 4) Underlying after-tax return divided by average equity based on 12.0% CET1 ratio (annualised).

Risk-weighted assets - 2Q2017 Geographical split (in percentages) excluding Other

The Netherlands

Underlying result before tax was EUR 760 million, up from EUR 456 million one year ago. The increase was driven by lower expenses, mainly refl ecting ongoing cost savings, whereas the second quarter of 2016 included additional redundancy costs and a provision for Dutch SME and Real Estate Finance clients with interest rate derivatives. Risk costs fell due to improved macroeconomic conditions. Income rose 2.1%, driven by higher commission and other income. Net interest income declined slightly due to margin pressure on current accounts and nonmortgage lending combined with lower mortgage volumes, partly off set by a higher margin on savings.

Underlying result before tax - Netherlands (in EUR million)

Consolidated Balance Sheet Segment Reporting: Geographical Split

Belgium

Belgium, including ING Luxembourg, recorded an underlying result before tax of EUR 335 million versus EUR 512 million in the second quarter of 2016. The decline was caused by EUR 177 million of higher expenses, mainly due to a litigation provision related to a discontinued business in Luxembourg, whereas the year-ago quarter included a EUR -116 million one-off procured cost saving. Total income fell by EUR 73 million, or 8.2%, mainly due to lower Financial Markets revenues and the EUR 30 million gain from the sale of Visa shares in the second quarter of 2016. The decline in income was off set by a EUR 74 million decline in risk costs, which was attributable to both Retail and Wholesale Banking.

Underlying result before tax - Belgium (in EUR million)

Germany

The underlying result before tax of Germany, including ING Austria, decreased 10.6% year-on-year to EUR 322 million from EUR 360 million in the second quarter of 2016, which included a EUR 44 million one-time gain on the sale of Visa shares. Excluding the Visa gain, total income increased 3.5%, mainly refl ecting higher net interest income from Wholesale Banking, stemming from volume growth. Expenses increased by EUR 28 million, or 11.8%, mainly due to higher headcount to support business growth as well as investments in Project Welcome. Risk costs were negligible at EUR 2 million, down from EUR 16 million in the second quarter of 2016.

200 300 400 500 360 81 279 366 84 282 322 289 104 394 73 321

Underlying result before tax - Germany (in EUR million)

0 100 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 Retail Banking Wholesale Banking 214 185

Other Challengers

The segment Other Challengers includes ING's activities in Australia, France, Italy, Spain & Portugal and the Czech Republic. The second-quarter 2017 result before tax declined 24.6% to EUR 132 million from EUR 175 million in the second quarter of 2016, which included a EUR 27 million one-time Visa gain. Excluding the Visa gain, income rose by EUR 39 million, or 9.8%, due to improved commercial results in most countries. This was mostly off set by EUR 34 million of higher

expenses, mainly due to higher marketing and staff costs to support business growth. Risk costs increased by EUR 20 million to EUR 57 million, mainly related to the Italian lease run-off portfolio.

Growth Markets

The segment Growth Markets consists of ING's activities in Poland, Romania and Turkey, as well as the Asian bank stakes. The underlying result before tax decreased by EUR 17 million to EUR 197 million compared with EUR 214 million in the second quarter of 2016, which included a EUR 82 million gain from the sale of Visa shares. Excluding the Visa gain, the result before tax increased by EUR 65 million, or 49.2%, driven by higher income due to strong commercial results in Poland, Turkey and Romania. These impacts were partly off set by 3.4% higher expenses and EUR 14 million of higher risk costs.

Underlying result before tax - Growth Markets (in EUR million)

Wholesale Banking Rest of World

Wholesale Banking Rest of World includes ING's activities in the UK, Americas, Asia and other countries in Central and Eastern Europe. This segment recorded an underlying result before tax of EUR 265 million, down from EUR 302 million in the second quarter of 2016. The decline year-on-year was mainly caused by higher risk costs related to some larger clients in the Americas and Asia. The gross result (excluding risk costs) rose by 7.2% to EUR 341 million. Income was up EUR 37 million, of which EUR 30 million was caused by lower negative CVA/DVA impacts. Expenses increased by EUR 13 million, or 5.2%, mainly due to increased personnel costs.

Underlying result before tax - WB Rest of World (in EUR million)

Consolidated Balance Sheet

ING Group: Consolidated balance sheet

Assets				Liabilities
Cash and balances with central banks	17,894	40,466	18,144	Deposits from banks	39,248	39,182	31,964
Loans and advances to banks	27,987	30,857	28,858	Customer deposits	533,210	533,737	522,942
Financial assets at fair value through profi t or loss	143,143	136,536	122,093	- savings accounts	323,023	320,810	315,697
- trading assets	135,246	129,332	114,504	- credit balances on customer accounts	177,827	175,694	173,230
- non-trading derivatives	2,926	2,356	2,490	- corporate deposits	31,174	35,746	32,687
- designated as at fair value through profi t or loss	4,971	4,848	5,099	- other	1,186	1,487	1,328
Investments	83,441	87,310	91,663	Financial liabilities at fair value through profi t or loss	103,202	110,116	98,974
- debt securities available-for-sale	69,199	74,082	78,888	- trading liabilities	88,677	95,330	83,167
- debt securities held-to-maturity	10,306	9,083	8,751	- non-trading derivatives	2,939	3,070	3,541
- equity securities available-for-sale	3,936	4,145	4,024	- designated as at fair value through profi t or loss	11,586	11,716	12,266
Loans and advances to customers	568,237	569,065	563,660	Other liabilities	20,724	20,584	20,345
- customer lending	567,436	566,739	561,367	Debt securities in issue	98,968	113,048	103,234
- securities at amortised cost	5,835	7,426	7,471	Subordinated loans	16,340	16,752	17,223
- provision for loan losses	-5,034	-5,100	-5,178	Total liabilities	811,692	833,419	794,682
Investments in associates and joint ventures	1,066	1,180	1,141	Equity
Property and equipment	1,938	1,990	2,002	Shareholders' equity	49,685	50,741	49,793
Intangible assets	1,491	1,477	1,484	Non-controlling interests	674	655	606
Other assets	16,854	15,934	16,036	Total equity	50,359	51,396	50,399
Total assets	862,051	884,815	845,081	Total liabilities and equity	862,051	884,815	845,081

ING Group's total assets decreased by EUR 22.8 billion in the second quarter to EUR 862.1 billion, including EUR 11.0 billion of negative currency impacts. The decrease was mostly due to lower cash and balances with central banks. On the liability side, the balance sheet decrease was mainly visible in debt securities in issue and trading liabilities. Customer lending and customer deposits were relatively stable compared with the end of March 2017. However, adjusted for currency impacts and excluding Bank Treasury, net core lending increased by EUR 6.4 billion and net growth in customer deposits was EUR 5.3 billion. ING Group's loan-to-deposit ratio remained stable at 1.05 compared with the end of March 2017.

Cash and balances with central banks

Cash and balances with central banks decreased by EUR 22.6 billion to EUR 17.9 billion. This was related to lower debt securities in issue, the temporary placement at central banks of the proceeds of ING's TLTRO participation in March 2017 and the higher reverse repo activity in the quarter.

Loans and advances to and deposits from banks

Loans and advances to banks decreased by EUR 2.9 billion to EUR 28.0 billion. Deposits from banks slightly increased by EUR 0.1 billion to EUR 39.2 billion.

Financial assets/liabilities at fair value

Financial assets at fair value through profi t or loss increased by EUR 6.6 billion to EUR 143.1 billion, mainly due to higher reverse repo activity, which was partly off set by lower trading

ING Group: Consolidated balance sheet
in EUR million	30 Jun. 17	31 Mar. 17	31 Dec. 16			30 Jun. 17 31 Mar. 17 31 Dec. 16
Assets				Liabilities
Cash and balances with central banks	17,894	40,466	18,144	Deposits from banks	39,248	39,182	31,964
Loans and advances to banks	27,987	30,857	28,858	Customer deposits	533,210	533,737	522,942
Financial assets at fair value through profi t or loss	143,143	136,536	122,093	- savings accounts	323,023	320,810	315,697
- trading assets	135,246	129,332	114,504	- credit balances on customer accounts	177,827	175,694	173,230
- non-trading derivatives	2,926	2,356	2,490	- corporate deposits	31,174	35,746	32,687
- designated as at fair value through profi t or loss	4,971	4,848	5,099	- other	1,186	1,487	1,328
Investments	83,441	87,310	91,663	Financial liabilities at fair value through profi t or loss	103,202	110,116	98,974
- debt securities available-for-sale	69,199	74,082	78,888	- trading liabilities	88,677	95,330	83,167
- debt securities held-to-maturity	10,306	9,083	8,751	- non-trading derivatives	2,939	3,070	3,541
- equity securities available-for-sale	3,936	4,145	4,024	- designated as at fair value through profi t or loss	11,586	11,716	12,266
Loans and advances to customers	568,237	569,065	563,660	Other liabilities	20,724	20,584	20,345
- customer lending	567,436	566,739	561,367	Debt securities in issue	98,968	113,048	103,234
- securities at amortised cost	5,835	7,426	7,471	Subordinated loans	16,340	16,752	17,223
- provision for loan losses	-5,034	-5,100	-5,178	Total liabilities	811,692	833,419	794,682
Investments in associates and joint ventures	1,066	1,180	1,141	Equity
Property and equipment	1,938	1,990	2,002	Shareholders' equity	49,685	50,741	49,793
Intangible assets	1,491	1,477	1,484	Non-controlling interests	674	655	606
Other assets	16,854	15,934	16,036	Total equity	50,359	51,396	50,399
Total assets	862,051	884,815	845,081	Total liabilities and equity	862,051	884,815	845,081

derivatives. Financial liabilities at fair value through profi t or loss decreased by EUR 6.9 billion, mainly due to lower trading derivatives and securities, and lower repo activity. Financial assets and liabilities at fair value consist predominantly of derivatives, securities and (reverse) repos, and are mainly used to facilitate client needs.

Investments

Investments decreased by EUR 3.9 billion to EUR 83.4 billion, mainly due to bond sales and redemptions.

Loans and advances to customers

Loans and advances to customers decreased by EUR 0.8 billion to EUR 568.2 billion. This was mainly due to EUR 1.6 billion of lower securities at amortised cost, partly off set by a EUR 0.7 billion increase in customer lending. When adjusted for EUR 7.3 billion of negative currency impacts, customer lending increased by EUR 8.0 billion. This was mainly due to EUR 6.4 billion of net core lending growth and a EUR 2.8 billion increase in short-term Bank Treasury lending, which were off set by a further decline in the run-off portfolios of WUB and Lease. Retail Banking grew its net core lending assets by EUR 4.4 billion, despite a small decline in the Netherlands. The growth in Retail Banking was in both residential mortgages and other customer lending. The EUR 2.0 billion net growth in Wholesale Banking was mainly generated by Industry Lending.

Debt securities in issue

Debt securities in issue decreased by EUR 14.1 billion to EUR 99.0 billion. The decrease was mainly caused by EUR 9.3 billion of lower CD/CPs. Other debt securities, mainly long-term debt, declined by EUR 4.7 billion because maturities and redemptions exceeded issuances.

Risk & Capital Management Consolidated Balance Sheet

Customer deposits

Customer deposits decreased by EUR 0.5 billion to EUR 533.2 billion. Adjusted for EUR 2.4 billion of negative currency impacts and a EUR 3.5 billion decline in Bank Treasury deposits, the net production of customer deposits was EUR 5.3 billion. Retail Banking recorded EUR 8.1 billion of net production, of which EUR 6.4 billion was in PCM/current accounts and EUR 1.7 billion in savings deposits. Growth was visible in most countries, particularly in the Netherlands, Belgium and Germany. In Wholesale Banking, net customer deposits decreased by EUR 2.8 billion.

Shareholders' equity

Shareholders' equity decreased by EUR 1.1 billion to EUR 49.7 billion in the second quarter. The decrease was mainly attributable to the EUR 1.6 billion payment of the fi nal dividend over 2016, a EUR 0.4 billion decline in the currency translation reserve and a EUR 0.2 billion decline in the cashfl ow hedge reserve. These impacts were partly off set by the EUR 1.4 billion net result for the quarter.

Shareholders' equity per share decreased to EUR 12.79 as per 30 June 2017 from EUR 13.07 as per 31 March 2017.

ING Group: Change in shareholders' equity
in EUR million	2Q2017	1Q2017
Shareholders' equity beginning of period	50,741	49,793
Net result for the period	1,371	1,143
Unrealised revaluations of equity securities	-136	154
Unrealised revaluations of debt securities	-24	-102
Realised gains/losses equity securities transferred to profi t or loss	-20	-8
Realised gains/losses debt securities transferred to profi t or loss	-13	-28
Change in cashfl ow hedge reserve	-183	-212
Other revaluations	298	-202
Defi ned benefi t remeasurement	1	9
Exchange rate diff erences	-722	171
Changes in treasury shares	3	-4
Employee stock options and share plans	6	27
Dividend	-1,632
Other	-5
Total changes	-1,056	948
Shareholders' equity end of period	49,685	50,741

ING Group: Shareholders' equity
in EUR million	30 Jun. 17	31 Mar. 17
Share premium/capital	17,042	17,036
Revaluation reserve equity securities	2,647	2,802
Revaluation reserve debt securities	1,007	1,044
Revaluation reserve cashfl ow hedge	382	565
Other revaluation reserves	199	203
Defi ned benefi t remeasurement reserve	-361	-362
Currency translation reserve	-1,221	-801
Treasury shares	-10	-12
Retained earnings and other reserves	27,486	29,123
Net result year to date	2,514	1,143
Total	49,685	50,741

Risk & Capital Management

ING Group: Loan book1)
	Credit outstandings		Non-performing loans		NPL%
in EUR million	30 Jun. 2017	31 Mar. 2017	30 Jun. 2017	31 Mar. 2017	30 Jun. 2017	31 Mar. 2017
Residential mortgages Netherlands	120,487	121,983	1,366	1,376	1.1%	1.1%
Other lending Netherlands	33,607	34,468	1,997	2,101	5.9%	6.1%
of which business lending Netherlands	24,245	24,637	1,761	1,855	7.3%	7.5%
Residential mortgages Belgium	36,411	35,880	1,007	1,033	2.8%	2.9%
Other lending Belgium	48,660	50,187	1,364	1,357	2.8%	2.7%
of which business lending Belgium	37,799	37,372	1,081	1,065	2.9%	2.8%
Retail Benelux	239,165	242,518	5,734	5,867	2.4%	2.4%
Residential mortgages Germany	68,496	67,877	467	490	0.7%	0.7%
Other lending Germany	14,748	15,679	203	197	1.4%	1.3%
Residential mortgages Other C&G Markets	59,019	59,650	365	390	0.6%	0.7%
Other lending Other C&G Markets	26,272	25,638	914	903	3.5%	3.5%
Retail Challengers & Growth Markets	168,535	168,844	1,949	1,980	1.2%	1.2%
Industry Lending	127,907	131,979	3,333	3,181	2.6%	2.4%
of which: Structured Finance	98,084	102,826	2,752	2,473	2.8%	2.4%
of which: Real Estate Finance	29,823	29,153	581	708	1.9%	2.4%
General Lending & Transaction Services	83,389	84,793	1,096	1,160	1.3%	1.4%
FM, Bank Treasury, Real Estate & Other	14,270	17,403	887	932	6.2%	5.4%
of which General Lease run-off	2,749	2,838	828	872	30.1%	30.7%
Wholesale Banking	225,566	234,175	5,316	5,273	2.4%	2.3%
Total loan book	633,266	645,537	12,999	13,120	2.1%	2.0%

1) Lending and money market credit outstandings, including guarantees and letters of credit but excluding undrawn committed exposures (off -balance positions).

ING Group's non-performing loans (NPL) ratio slightly increased to 2.1% in the second quarter of 2017 as a reduction in credit outstandings more than off set the lowered NPL amounts. ING Group's fully loaded common equity Tier 1 ratio remained strong at 14.5%.

Credit risk management

ING Group's non-performing loans ratio increased compared with the previous quarter as the decline in NPL amounts was more than off set by the decrease in credit outstandings, especially in Structured Finance and Bank Treasury.

Within Retail Netherlands, the NPL ratio for residential mortgages remained fl at at 1.1% compared with the previous quarter. The decrease of the portfolio size of the business lending portfolio in the Netherlands was outstripped by the decline in NPLs, resulting in a continued decline in the NPL

ratio to 7.3% from 7.5% in the fi rst quarter of 2017. For Retail Belgium, the NPL ratio for the residential mortgage portfolio came down to 2.8% from 2.9% in the previous quarter, while the NPL ratio of the business lending portfolio increased to 2.9% from 2.8%. For Retail Challengers & Growth Markets, the NPL ratio remained fl at at 1.2%.

In Wholesale Banking, the NPL ratio increased slightly to 2.4% from 2.3% in the previous quarter, mainly due to a few fi les in Structured Finance. The NPL ratio for Real Estate Finance continued its improving trend, decreasing to 1.9% from 2.4% in the fi rst quarter of 2017.

ING Group's stock of provisions remained stable at EUR 5.2 billion in the second quarter, as net additions were fully off set by amounts written off . Although ING Group's provision coverage ratio at consolidated level hardly moved, at business line level some modest changes were observable. ING Group's

vING Group: Stock of provisions1)
-----------------------------------

in EUR million	Retail Benelux	Retail Challengers & Growth Markets	Wholesale Banking	Total2) 2Q 2017	Total 1Q 2017
Stock of provisions at beginning of period	1,818	1,268	2,146	5,232	5,308
Changes in composition of the Bank				0	0
Amounts written off	-109	-41	-91	-241	-235
Recoveries of amounts written off	12		-5	7	25
Increases in loan loss provisioning	134	98	202	435	424
Releases from loan loss provisioning	-109	-30	-67	-206	-291
Net addition to loan loss provisions	25	68	135	229	133
Exchange or other movements	6	-1	-73	-69	1
Stock of provisions at end of period	1,752	1,294	2,112	5,159	5,232
Coverage ratio 2Q 2017	30.6%	66.4%	39.7%	39.7%
Coverage ratio 1Q 2017	31.0%	64.0%	40.7%	39.9%

1) At the end of June 2017, the stock of provisions included provisions for amounts due from banks (EUR 13 million) and provisions for contingent liabilities recorded under Other Provisions (EUR 112 million).

2) Net addition to the loan loss provisions includes EUR 1 million at Corporate Line

Risk & Capital Management

loan portfolio consists predominantly of asset-based and/ or well-secured loans, including residential mortgages, Structured Finance and Real Estate Finance.

Securities portfolio

ING Group's overall exposure to debt securities decreased to EUR 85.5 billion in the second quarter from EUR 90.8 billion in the fi rst quarter, mainly due to bond sales and redemptions. The main decreases were in government bonds and covered bonds, down EUR 2.5 billion and EUR 1.9 billion respectively. The revaluation reserve of debt securities remained stable at EUR 1.0 billion after tax.

ING Group: Debt securities1)
in EUR billion	30 Jun. 17	31 Mar. 17
Government bonds	45.7	48.2
Sub-sovereign, supranationals and agencies (SSA)	20.1	20.8
Covered bonds	9.9	11.8
Financial institutions2)	2.4	2.6
Corporate bonds	2.2	2.2
ABS	5.3	5.2
Total	85.5	90.8

1) Excluding positions at fair value through the P&L but including securities

classifi ed as Loans & Receivables. 2) Including Central Bank bills.

Breakdown government bonds
in EUR billion	30 Jun. 17	31 Mar. 17
The Netherlands	8.2	9.2
Belgium	6.0	6.6
United States	5.8	4.4
Poland	5.6	6.3
Germany	5.1	5.7
Austria	3.8	3.8
France	3.1	4.0
Finland	2.2	2.2
Spain	2.2	2.6
Romania	0.7	0.6
Turkey	0.6	0.6
Other	2.2	2.2
Total	45.7	48.2

Funding and liquidity

In the second quarter, ING Group issued EUR 1.4 billion of RMBS, senior debt and Tier 2 instruments. As the maturities and redemptions strongly exceeded this amount, long-term debt securities decreased by EUR 4.7 billion. As already announced in the 1Q17 press release, EUR 1.0 billion of ING Bank Tier 2 bonds were exchanged for ING Group Tier 2 notes at similar terms. ING Group's loan-to-deposit ratio, excluding securities recognised at amortised cost, remained stable at 1.05 compared with the end of March 2017. The liquidity position was above the minimum requirements.

Market risk

In the second quarter, the average Value-at-Risk (VaR) remained stable at EUR 7 million for the third quarter in a row. The minimum and maximum of the total overnight VaR for ING Group's trading portfolio remained unchanged compared with the previous quarter and fl uctuated between EUR 6 million and EUR 9 million.

ING Group: Consolidated VaR trading books
in EUR million	Minimum	Maximum		Average Quarter-end
Foreign exchange	1	3	2	2
Equities	2	4	3	2
Interest rate	3	5	4	4
Credit spread	5	7	6	5
Diversifi cation			-8	-7
Total VaR1)	6	9	7	7

1) The total VaR for the columns Minimum and Maximum cannot be calculated by taking the sum of the individual components since the observations for both the individual markets as well as for total VaR may occur on diff erent dates.

Risk & Capital Management

ING Group: Capital position
	2019 rules (fully loaded)		2017 rules (phased in)
in EUR million	30 June 17	31 Mar. 17	30 June 17	31 Mar. 17
Shareholders' equity (parent)	49,685	50,741	49,685	50,741
- Interim profi t not included in CET1 capital 1)	-1,706	-2,482	-1,706	-2,482
- Other regulatory adjustments	-3,119	-3,299	-3,092	-3,321
Regulatory adjustments	-4,825	-5,781	-4,798	-5,803
Available common equity Tier 1 capital	44,860	44,960	44,888	44,939
Additional Tier 1 securities 2)	6,212	6,598	6,212	6,598
Regulatory adjustments additional Tier 1	0	0	-434	-401
Available Tier 1 capital	51,072	51,559	50,666	51,136
Supplementary capital - Tier 2 bonds 3)	10,212	10,186	10,212	10,186
Regulatory adjustments Tier 2	115	106	21	10
Available BIS capital	61,399	61,851	60,899	61,332
Risk-weighted assets	310,336	309,796	310,336	309,796
Common equity Tier 1 ratio	14.5%	14.5%	14.5%	14.5%
Tier 1 ratio	16.5%	16.6%	16.3%	16.5%
Total capital ratio	19.8%	20.0%	19.6%	19.8%
Leverage Ratio	4.6%	4.5%	4.6%	4.5%

1) The interim profi t not included in CET1 capital included EUR 1,706 million for YTD June 2017. 2) Including EUR 2,827 million, which is CRR/CRD IV-compliant (Q1 2017: EUR 3,018 million), and EUR 3,386 million to be replaced as capital recognition is subject to CRR/CRD IV grandfathering rules (Q1 2017 EUR 3,580 million). 3) Including EUR 8,122 million, which is CRR/CRD IV-compliant (Q1 2017: EUR 8,047 million), and EUR 2,090 million to be replaced as capital recognition is subject to CRR/CRD IV grandfathering rules (Q1 2017: EUR 2,139 million).

Capital ratios

ING Group's fully loaded common equity Tier 1 ratio remained strong at the end of the second quarter of 2017 at 14.5%, which was stable compared to the end of March 2017. Similarly, common equity Tier 1 capital has remained approximately constant at EUR 44.9 billion. This is mainly due to the inclusion of EUR 0.5 billion of net profi t stemming from second-quarter earnings, off set by a EUR 0.4 billion reduction in FX reserves and a EUR 0.2 billion reduction in debt and equity reserves. The remaining quarterly profi t of EUR 0.9 billion has been reserved for future dividend payments. This follows the decision to reserve one third of the aggregate prior-year dividend in each of the fi rst three quarters of the fi nancial year. This treatment of interim profi ts is in line with ING's aim to pay a progressive dividend over time, and facilitates a smoother quarterly capital development. The 2016 fi nal dividend payment of EUR 1,632 million on 18 May 2017 did not have an impact on the common equity Tier 1 ratio.

The development of the common equity Tier 1 ratio was further impacted by a slight increase of EUR 0.5 billion in riskweighted assets (RWA), primarily due to a rise in credit RWA.

ING Group's fully loaded Tier 1 ratio (including grandfathered securities) decreased slightly from 16.6% to 16.5% compared to the end of March 2017. This is the result of changes in common equity Tier 1 capital (as explained above) as well as foreign currency movements, resulting in a EUR 0.5 billion decrease in the Available Tier 1 capital base. On 1 August 2017, ING has announced that it will redeem a USD 0.5 billion Additional Tier 1 instrument in September 2017. The redemption is in line with ING's strategy to continuously optimise its capital structure. The fully loaded total capital ratio (including grandfathered securities) decreased to 19.8% at the end of June 2017 from 20.0% in the previous quarter.

The development primarily refl ects the change in the fully loaded Tier 1 ratio, as Tier 2 capital remained approximately stable. This is attributable to negative FX movements, largely neutralising the EUR 0.3 billion ING Group Tier 2 private placements issued during the quarter.

ING Group's phased-in common equity Tier 1 ratio remained stable at 14.5% compared to the fi rst quarter of 2017. The phased-in Tier 1 ratio decreased to 16.3%, and the phased-in total capital ratio decreased to 19.6%. The developments in the phased-in capital ratios largely mirror trends in the fully loaded capital ratios in combination with the application of the transitional rules under CRR/CRDIV. All ratios remain signifi cantly ahead of regulatory requirements.

The leverage ratio of ING Group according to the Delegated Act (including grandfathered securities) takes into account the impact of grossing up the notional cash pool activities. The leverage ratio on 30 June 2017 was 4.6%, up 0.1 percentage point compared to the end of March 2017. This is attributable to the decrease in the total exposure measure, which more than off sets the reduction in Tier 1 capital.

Risk-weighted assets (RWA)

At the end of June 2017, ING Group's total RWA were EUR 310.3 billion, EUR 0.5 billion higher than at the end of the previous quarter. The increase includes a EUR 4.5 billion decrease as a result of foreign currency movements that were mainly caused by the depreciation of the US dollar. At comparable FX rates, the increase was primarily due to a rise in credit risk-weighted assets amounting to EUR 5.7 billion; this mainly refl ects RWA growth related to volume growth and a model update for Dutch mortgages. These impacts were partially off set by positive risk migration in the Retail Benelux portfolio and lower RWA for ING's equity stakes. Market risk-weighted assets decreased by EUR 0.8 billion to

Economic Environment Risk & Capital Management

EUR 5.8 billion, while operational risk-weighted assets were broadly stable at EUR 39.3 billion.

ING Group: Composition of RWA
in EUR billion	30 June 17	31 Mar. 17
Credit RWA	265.2	264.1
Operational RWA	39.3	39.1
Market RWA	5.8	6.6
Total RWA	310.3	309.8

Dividend

ING's dividend policy aims to pay a progressive dividend over time, while maintaining a healthy Group common equity Tier 1 ratio above the prevailing fully loaded requirement, plus a comfortable management buff er to accommodate for factors such as Pillar 2 Guidance. As part of its dividend policy, ING also aims to pay an interim dividend with its half-year results. The cash interim dividend has been set at EUR 0.24 per ordinary share, which is the same amount per share as in 2015 and 2016. The interim dividend will be paid in August 2017. The Board's fi nal dividend proposal will be made at year-end, and will refl ect considerations including expected future capital requirements, growth opportunities available to the Group, net earnings, and regulatory developments.

Ratings

During the second quarter of 2017, the ratings and outlook from S&P, Moody's and Fitch remained unchanged. On 26 July 2017, S&P upgraded the long-term ratings for ING Bank N.V. to A+ (from A). The upgrade refl ects S&P's expectation that in the coming years ING will build a sizable buff er of bail-inable debt protecting ING Bank senior creditors, while maintaining strong capital adequacy metrics thanks to resilient fi nancial performance, supportive internal capital generation, and a broadly similar risk profi le.

Main credit ratings of ING on 2 August 2017
	Standard & Poor's			Moody's	Fitch
	Rating	Outlook	Rating	Outlook		Rating Outlook
ING Groep N.V.	A-	Stable	Baa1	Stable	A+	Stable
ING Bank N.V.	A+	Stable	A1	Positive	A+	Stable

Economic Environment

Economic activity

Businesses continue to be upbeat about the eurozone economy, and the eurozone composite PMI is the strongest among the world's most important economies. In fact, in the second quarter the PMI was the strongest in six years, despite a small decline in June. Even though the PMI for the US strengthened in the second quarter and US growth has improved, US economic data have still been relatively soft recently. The PMIs are regarded as timely indicators of underlying trends in economic activity.

Currency markets

The euro strengthened signifi cantly over the past few months because of a strong domestic economy and speculation about the end of asset purchases by the ECB. At the same time, expectations of rate hikes in the US declined somewhat as economic output indicators came in on the soft side, causing dollar weakness.

Credit markets

Credit spreads tightened during the past quarter in both the US and Europe. In the eurozone, this was mainly caused by subsiding political risk while economic growth improved.

Interest rates

In the US, the 3-month Libor has been increasing quickly following the increase in the Fed funds rate in both March and June. The ECB is expected to keep rates unchanged for the moment and only to start tapering in January. This, together with diminished political risk and stronger growth, is causing the long end of the curve to increase, while the short end remains negative for now.

Stock markets

The pace of stock market gains has fallen signifi cantly in the US, with a small loss for the S&P 500 in the second quarter. The Euro Area FTSE 300 Index outperformed its American counterpart by 2.6% growth during the second quarter. Continued strength in the economy, political risks that are not materialising, and continued monetary support from the ECB boosted equities during the past quarter.

Consumer confi dence

In June, eurozone consumer confi dence surged to its highest reading since 2001. This optimism can largely be explained by improving job growth. The declining infl ation rate, following lower oil prices, also helped real wage growth to improve.

Consolidated profi t or loss account: ING Group

ING Group: Consolidated profi t or loss account
	Total ING Group		of which: Divestments/Special Items		of which: Insurance Other		of which: Underlying Banking
In EUR million	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Net interest income	3,359	3,267			-	-	3,359	3,267
Net commission income	713	610			-1	-	714	610
Investment income	43	172			-	-	43	172
Other income	384	440			-31	-58	415	498
Total income	4,500	4,489	-	-	-32	-58	4,532	4,547
Expenses excl. regulatory costs	2,242	2,157		-	-		2,242	2,157
Regulatory costs	69	75		-	-		69	75
Operating expenses	2,311	2,231	-	-	-	-	2,311	2,231
Gross result	2,189	2,258	-	-	-32	-58	2,221	2,316
Addition to loan loss provisions	229	307			-	-	229	307
Result before tax	1,960	1,951	-	-	-32	-58	1,992	2,009
Taxation	565	569		-	-		565	569
Non-controlling interests	23	23			-		23	23
Net result from continuing operations	1,371	1,359	-	-	-32	-58	1,403	1,417
Net result from discontinued operations	-	-64
Net result ING Group	1,371	1,295

ING Group: Underlying profi t or loss account

	Total ING Group		of which: Retail Banking		of which: Wholesale Banking		of which: Corporate Line Banking
In EUR million	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Net interest income	3,359	3,267	2,372	2,333	941	902	46	31
Net commission income	714	610	419	339	297	273	-2	-1
Investment income	43	172	39	156	11	15	-6	1
Other income	415	498	144	197	340	281	-68	20
Total underlying income	4,532	4,547	2,974	3,025	1,588	1,471	-30	51
Expenses excl. regulatory costs	2,242	2,157	1,493	1,494	667	587	82	76
Regulatory costs	69	75	61	72	7	2	1	1
Operating expenses	2,311	2,231	1,554	1,566	675	590	82	76
Gross result	2,221	2,316	1,420	1,459	914	881	-113	-25
Addition to loan loss provisions	229	307	93	184	135	123	1	0
Underlying result before tax	1,992	2,009	1,327	1,275	778	758	-113	-25
Taxation	565	569	369	346	208	266	-12	-42
Non-controlling interests	23	23	20	19	3	4	-	-
Underlying net result	1,403	1,417	938	911	566	489	-101	17
Special items after tax	-	-	-	-	-	-	-	-
Net result Banking	1,403	1,417	938	911	566	489	-101	17
Net result Insurance Other	-32	-58
Net result from continuing operations	1,371	1,359
Net result from discontinued operations	-	-64
Net result ING Group	1,371	1,295

ING Group: Profi tability and effi ciency
	ING Group		Retail Banking		Wholesale Banking		Corporate Line Banking
In EUR million	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Cost/income ratio (continuing operations)	51.4%	49.7%
Underlying cost/income ratio	51.0%	49.1%	52.3%	51.8%	42.5%	40.1%	n.a.	n.a.
ING Group's total return on IFRS-EU equity1)	11.4%	10.6%
ING Group's underlying return on IFRS-EU equity1)	11.7%	11.6%

1) Annualised (underlying) net result divided by average IFRS-EU shareholders' equity excluding declared dividend and interim profi t not included in CET1 capital as from 1Q2017.

Consolidated profi t or loss account: ING Group

ING Group: Consolidated profi t or loss account
	Total ING Group		of which: Divestments/Special Items		of which: Insurance Other		of which: Underlying Banking
In EUR million	6M2017	6M2016	6M2017	6M2016	6M2017	6M2016	6M2017	6M2016
Net interest income	6,711	6,515			-	-	6,711	6,515
Net commission income	1,395	1,217			-1	-	1,396	1,217
Investment income	91	243			-	-	91	243
Other income	666	522			-62	-136	729	659
Total income	8,864	8,498	-	-	-64	-136	8,928	8,634
Expenses excl. regulatory costs	4,379	4,314		17	-		4,379	4,297
Regulatory costs	543	571		-	-		543	571
Operating expenses	4,922	4,884	-	17	-	-	4,922	4,868
Gross result	3,942	3,613	-	-17	-64	-136	4,005	3,766
Addition to loan loss provisions	362	571			-		362	571
Underlying result before tax	3,580	3,042	-	-17	-64	-136	3,644	3,195
Taxation	1,022	893		-4	-		1,022	898
Non-controlling interests	44	39			-		44	39
Net result from continuing operations	2,514	2,110	-	-13	-64	-136	2,578	2,259
Net result from discontinued operations	-	442
Net result ING Group	2,514	2,552

ING Group: Underlying profi t or loss account

	Total ING Group		of which: Retail Banking		of which: Wholesale Banking		of which: Corporate Line Banking
In EUR million	6M2017	6M2016	6M2017	6M2016	6M2017	6M2016	6M2017	6M2016
Net interest income	6,711	6,515	4,743	4,663	1,896	1,827	71	25
Net commission income	1,396	1,217	822	695	577	524	-3	-2
Investment income	91	243	66	213	34	30	-9	1
Other income	729	659	255	270	627	406	-153	-17
Total underlying income	8,928	8,634	5,887	5,840	3,134	2,787	-93	7
Expenses excl. regulatory costs	4,379	4,297	2,952	3,002	1,275	1,161	152	134
Regulatory costs	543	571	444	466	98	104	1	1
Operating expenses	4,922	4,868	3,397	3,467	1,373	1,265	152	135
Gross result	4,005	3,766	2,490	2,373	1,761	1,522	-245	-128
Addition to loan loss provisions	362	571	191	331	170	240	1	-0
Underlying result before tax	3,644	3,195	2,299	2,041	1,591	1,282	-246	-128
Taxation	1,022	898	636	553	438	416	-53	-71
Non-controlling interests	44	39	37	32	7	6	-	-
Underlying net result	2,578	2,259	1,626	1,456	1,145	860	-193	-57
Special items after tax	-	-13	-	-13	-	-	-	-
Net result Banking	2,578	2,246	1,626	1,443	1,145	860	-193	-57
Net result Insurance Other	-64	-136
Net result from continuing operations	2,514	2,110
Net result from discontinued operations	-	442
Net result ING Group	2,514	2,552

ING Group: Profi tability and effi ciency
	ING Group		Retail Banking		Wholesale Banking		Corporate Line Banking
In EUR million	6M2017	6M2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Cost/income ratio (continuing operations)	55.5%	57.5%
Underlying cost/income ratio	55.1%	56.4%	57.7%	59.4%	43.8%	45.4%	n.a.	n.a.
ING Group's total return on IFRS-EU equity1)	10.4%	10.5%
ING Group's underlying return on IFRS-EU equity1)	10.6%	9.3%

1) Annualised (underlying) net result divided by average IFRS-EU shareholders' equity excluding declared dividend and interim profi t not included in CET1 capital as from 1Q2017.

Consolidated pro fi t or loss account: Geographical split

Geographical split: Consolidated profi t or loss account
	Total ING Group		Netherlands		Belgium		Germany		Other Challengers		Growth Markets		Wholesale Banking Rest of World		Other
In EUR million	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016	2Q2017	2Q2016
Net interest income	3,359	3,267	1,129	1,136	528	553	522	484	373	354	384	303	376	407	47	31
Net commission income	714	610	224	203	148	127	65	61	57	34	88	70	133	114	-2	-1
Investment income	43	172	8	29	20	3	0	44	3	11	22	84	-4	-1	-6	1
Other income	415	498	120	84	125	211	3	24	5	28	35	67	99	47	27	36
Total underlying income	4,532	4,547	1,482	1,452	822	895	590	614	439	427	529	524	604	567	66	68
Expenses excl. regulatory costs	2,242	2,157	686	886	481	285	250	223	235	202	244	232	261	251	84	77
Regulatory costs	69	75	19	7	-13	6	15	14	15	14	31	34	2	-1	1	1
Operating expenses	2,311	2,231	705	893	468	291	265	237	250	216	275	266	263	250	85	78
Gross result	2,221	2,316	777	558	354	604	325	376	189	211	253	257	341	318	-19	-10
Addition to loan loss provisions	229	307	17	103	19	93	2	16	57	37	57	43	76	15	1	0
Underlying result before tax Banking	1,992	2,009	760	456	335	512	322	360	132	175	197	214	265	302	-19	-10
Retail Banking	1,327	1,275	565	325	304	401	214	279	84	102	159	169	-	-	-	-
Wholesale Banking	778	758	195	131	30	111	109	81	48	72	37	45	265	302	94	15
Corporate Line	-113	-25	-	-	-	-	-	-	-	-	-	-	-	-	-113	-25
Underlying result before tax	1,992	2,009	760	456	335	512	322	360	132	175	197	214	265	302	-19	-10
Taxation	565	569	191	110	117	165	107	101	42	49	45	41	73	143	-9	-39
Non-controlling interests	23	23	-	-	2	-1	1	0	-	-	21	23	-	-	-	-
Underlying net result Banking	1,403	1,417	569	346	216	347	215	259	90	126	131	150	192	159	-10	29
Special items after tax	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Net result Banking	1,403	1,417	569	346	216	347	215	259	90	126	131	150	192	159	-10	29
Net result Insurance Other	-32	-58
Net result from continuing operations	1,371	1,359
Net result from discontinued operations	-	-64
Net result ING Group	1,371	1,295

Consolidated pro		fi t or loss account: Geographical split
------------------	--	------------------------------------------	--	--

Geographical split: Consolidated profi t or loss account
	Total ING Group		Netherlands		Belgium		Germany		Other Challengers		Growth Markets		Wholesale Banking Rest of World		Other
In EUR million														6M2017 6M2016 6M2017 6M2016 6M2017 6M2016 6M2017 6M2016 6M2017 6M2016 6M2017 6M2016 6M2017 6M2016 6M2017 6M2016
Net interest income	6,711	6,515	2,256	2,318	1,079	1,087	1,050	989	748	701	742	600	763	796	72	25
Net commission income	1,396	1,217	448	401	288	268	125	120	113	72	161	137	264	221	-3	-1
Investment income	91	243	39	61	27	39	12	48	6	11	23	91	-6	-5	-9	-2
Other income	729	659	190	95	267	225	-3	28	22	42	99	135	200	128	-46	5
Total underlying income	8,928	8,634	2,933	2,875	1,661	1,618	1,184	1,186	889	826	1,025	963	1,221	1,140	14	27
Expenses excl. regulatory costs	4,379	4,297	1,350	1,646	909	702	502	439	472	417	477	472	512	482	156	139
Regulatory costs	543	571	124	118	212	202	69	117	37	36	74	60	26	36	1	1
Operating expenses	4,922	4,868	1,474	1,764	1,122	904	571	556	509	454	551	532	538	517	157	139
Gross result	4,005	3,766	1,459	1,110	539	713	613	629	380	372	474	431	684	623	-143	-112
Addition to loan loss provisions	362	571	6	194	78	126	2	22	97	66	110	102	69	61	1	-0
Underlying result before tax Banking	3,644	3,195	1,453	916	462	588	611	607	283	306	364	329	614	562	-143	-112
Retail Banking	2,299	2,041	1,043	661	377	507	398	452	191	175	290	246	-	-	-	-
Wholesale Banking	1,591	1,282	410	255	85	81	213	155	92	131	74	82	614	562	103	16
Corporate Line	-246	-128	-	-	-	-	-	-	-	-	-	-	-	-	-246	-128
Underlying result before tax	3,644	3,195	1,453	916	462	588	611	607	283	306	364	329	614	562	-143	-112
Taxation	1,022	898	365	225	161	183	204	186	85	94	79	62	174	215	-47	-67
Non-controlling interests	44	39	-	-	3	-1	1	1	-	-	40	39	-	-	-	-
Underlying net result Banking	2,578	2,259	1,088	691	297	406	406	421	198	213	245	228	441	346	-96	-46
Special items after tax	-	-13	-	-13	-	-	-	-	-	-	-	-	-	-	-	-
Net result Banking	2,578	2,246	1,088	679	297	406	406	421	198	213	245	228	441	346	-96	-46
Net result Insurance Other	-64	-136
Net result from continuing operations	2,514	2,110
Net result from discontinued operations	-	442
Net result ING Group	2,514	2,552

ING profi le

ING is a global fi nancial institution with a strong European base, off ering banking services through its operating company ING Bank. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank's more than 51,000 employees off er retail and wholesale banking services to customers in over 40 countries.

ING Group shares are listed on the exchanges of Amsterdam (INGA NA, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N).

Sustainability forms an integral part of ING's strategy, which is evidenced by the number one position among 395 banks ranked by Sustainalytics. ING Group shares are being included in the FTSE4Good index and in the Dow Jones Sustainability Index (Europe and World) where ING is among the leaders in the Banks industry group.

Further information

All publications related to ING's 2Q17 results can be found at www.ing.com/2q17, including a video with Ralph Hamers. The video is also available on YouTube.

Additional fi nancial information is available at www.ing.com/qr:

ING Group historical trend data
ING Group analyst presentation (also available via SlideShare)

For further information on ING, please visit www.ing.com. Frequent news updates can be found in the Newsroom or via the @ING_news Twitter feed. Photos of ING operations, buildings and its executives are available for download at Flickr. Footage (B-roll) of ING is available via ing.yourmediakit.com or can be requested by emailing [email protected]. ING presentations are available at SlideShare.

Important legal information

Elements of this press release contain or may contain information about ING Groep N.V. and/ or ING Bank N.V. within the meaning of Article 7(1) to (4) of EU Regulation No 596/ 2014.

Projects may be subject to regulatory approvals.

ING Group's annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS-EU'). In preparing the fi nancial information in this document, except as described otherwise, the same accounting principles are applied as in the 2016 ING Group consolidated annual accounts. All fi gures in this document are unaudited. Small diff erences are possible in the tables due to rounding.

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 diff er materially from those expressed or implied in such statements. Actual results, performance or events may diff er 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, (2) changes in performance of fi nancial markets, including developing markets, (3) potential consequences of European Union countries leaving the European Union or a break-up of the euro, (4) changes in the availability of, and costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit and capital markets generally, including changes in borrower and counterparty

creditworthiness, (5) changes aff ecting interest rate levels, (6) changes aff ecting currency exchange rates, (7) changes in investor and customer behaviour, (8) changes in general competitive factors, (9) changes in laws and regulations and the interpretation and application thereof, (10) geopolitical risks and policies and actions of governmental and regulatory authorities, (11) changes in standards and interpretations under International Financial Reporting Standards (IFRS) and the application thereof, (12) conclusions with regard to purchase accounting assumptions and methodologies, and other changes in accounting assumptions and methodologies including changes in valuation of issued securities and credit market exposure, (13) changes in ownership that could aff ect the future availability to us of net operating loss, net capital and built-in loss carry forwards, (14) changes in credit ratings, (15) the outcome of current and future legal and regulatory proceedings, (16) ING's ability to achieve its strategy, including projected operational synergies and cost-saving programmes and (17) the other risks and uncertainties detailed in the most recent annual report of ING Groep N.V. (including the Risk Factors contained therein) and ING's more recent disclosures, including press releases, which are available on www.ING.com. Many of those factors are beyond ING's control.

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 off er to sell, or a solicitation of an off er to purchase, any securities in the United States or any other jurisdiction.

AI assistant

ING Groep N.V. — Earnings Release 2017

3854_iss_2017-08-02_7900b445-edd8-4736-b998-1f6c7b9b3b70.pdf

ING posts 2Q17 net result of EUR 1,371 million

CEO statement

Investor conference call

Media conference call

Business & Sustainability Highlights Share Information

Table of contents

1) Four-quarter rolling average

Market capitalisation (in EUR billion)

Listing information

American Depositary Receipts (ADRs)

Broker/Institutional Investors

Business & Sustainability Highlights

Innovation that empowers customers

Open platforms

Sustainable progress

Underlying results

Total underlying income

Operating expenses

Addition to loan loss provisions

Underlying result before tax

Underlying net result

Segment Reporting: Retail Banking Consolidated Results

Net result ING Group

Return on equity ING Group (in %)

Dividend

Other events

Segment Reporting: Retail Banking

Retail Benelux

Retail Netherlands

Segment Reporting: Retail Banking

Retail Belgium

Segment Reporting: Retail Banking

Retail Challengers & Growth Markets

Retail Germany

Segment Reporting: Wholesale Banking Retail Banking

Retail Other Challengers & Growth Markets

Segment Reporting: Wholesale Banking

Segment Reporting: Wholesale Banking

Industry Lending

Underlying result before tax - Industry Lending (in EUR million)

Segment Reporting: Wholesale Banking

General Lending & Transaction Services

Financial Markets

Bank Treasury & Other

Segment Reporting: Geographical Split Corporate Line Banking

Segment Reporting: Geographical Split

Risk-weighted assets - 2Q2017 Geographical split (in percentages) excluding Other

The Netherlands

Consolidated Balance Sheet Segment Reporting: Geographical Split

Belgium

Germany

Other Challengers

Growth Markets

Wholesale Banking Rest of World

Underlying result before tax - WB Rest of World (in EUR million)

Consolidated Balance Sheet

ING Group: Consolidated balance sheet

Cash and balances with central banks

Loans and advances to and deposits from banks

Financial assets/liabilities at fair value

Investments

Loans and advances to customers

Debt securities in issue

Risk & Capital Management Consolidated Balance Sheet

Customer deposits

Shareholders' equity

Risk & Capital Management

Credit risk management

Risk & Capital Management

Securities portfolio

Funding and liquidity

Market risk

Risk & Capital Management

Capital ratios

Risk-weighted assets (RWA)

Economic Environment Risk & Capital Management

Dividend

ING Groep N.V. Earnings Release 2017