Earnings call transcript: ING Group beats Q2 2025 earnings expectations

ING Group NV reported its earnings for the second quarter of 2025, surpassing market expectations with an earnings per share (EPS) of $0.64, compared to a forecasted $0.60. The revenue also exceeded predictions, reaching $6.53 billion against an expected $6.50 billion. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period, suggesting continued momentum. Despite these positive results, the stock experienced a pre-market decline of 2.99%, closing at $22.71.

Key Takeaways

• ING Group’s Q2 earnings per share exceeded expectations by nearly 6%.
• Revenue came in slightly above forecasts at $6.53 billion.
• Pre-market stock price fell by 2.99% despite strong earnings.
• The company reported an 18% year-over-year growth in net profit.
• ING continues to focus on digital transformation and customer acquisition.

Company Performance

ING Group demonstrated strong performance in Q2 2025, with a net profit of PLN 1,035 million, marking an 18% increase from the previous year. The first half of the year saw a net profit of PLN 2,149 million, up 10% year-over-year. With a market capitalization of $70.24 billion and a P/E ratio of 13.76, the company’s strategic focus on digital processes and customer service improvements has contributed to its robust results and impressive year-to-date return of 67.05%.

Financial Highlights

• Revenue: $6.53 billion, slightly above the forecast.
• Earnings per share: $0.64, surpassing the forecast of $0.60.
• Net interest income remained stable despite lower interest rates.
• The cost of risk decreased by 39% year-over-year.
• The capital adequacy ratio stood at 15.66%.

Earnings vs. Forecast

ING Group’s EPS of $0.64 exceeded the market forecast of $0.60 by approximately 6%, reflecting stronger-than-expected performance. Revenue also slightly surpassed expectations, contributing to a positive earnings surprise. This marks a continuation of the company’s trend of meeting or exceeding earnings forecasts in recent quarters.

Market Reaction

Despite the positive earnings surprise, ING Group’s stock price fell by 2.99% in pre-market trading, closing at $22.71. This decline could be attributed to broader market conditions or investor concerns over future challenges. The stock remains within its 52-week range, with a high of $25.11 and a low of $15.09. InvestingPro analysis suggests the stock is currently undervalued, while offering a steady dividend yield of 2.79%. For deeper insights into ING’s valuation and 12+ additional ProTips, consider accessing the comprehensive Pro Research Report available on InvestingPro.

Outlook & Guidance

Looking ahead, ING Group plans to announce a strategy revision on November 19, with a focus on private banking and mutual funds. The company is also expecting a boost in corporate lending in 2026 and continues to emphasize digital transformation as a key growth driver. Management’s confidence is reflected in their aggressive share buyback program, as highlighted in InvestingPro’s analysis, which provides detailed insights through their comprehensive Pro Research Reports covering 1,400+ top stocks.

Executive Commentary

"We are a systemic bank. We’re a bank that has a mission," stated Mikhail Boleslawski, President of ING Group, highlighting the company’s strategic focus. The CEO emphasized the importance of the mortgage loan as a fundamental banking product, while also committing to solving problems online in a frictionless manner.

Risks and Challenges

• Obligatory provisions of €1.5-2 billion sector-wide could impact financials.
• Continued pressure from lower interest rates affecting net interest income.
• Potential market saturation in key areas like mortgage lending.
• Economic conditions in Poland and broader global market trends.
• Regulatory changes and their impact on operational strategies.

Q&A

During the earnings call, analysts inquired about the potential impact of obligatory provisions and the company’s mortgage loan strategy. ING Group reaffirmed its commitment to the mortgage market while exploring flexible work arrangements and monitoring corporate lending conditions.

Full transcript - ING Group NV ADR (ING) Q2 2025:

Piotr Utrata, Spokesperson, Bank: Good morning. Welcome to this conference to summarize our performance in the second quarter twenty twenty five. Mikhail Boleslawski, the President of the Board Bozan Grotzuk, Deputy President responsible for Finance Rafa Benetsky, the Chief Economist and Iza Rokiska will be co hosting this conference. She’s responsible for Investor Relations. And my name is Piotr Utrata.

I’m the spokesperson of the bank. Let me now give the floor to Mikhail Boleslawski and ask him to give us an introduction to the financial results. And please remember to turn your mic on. Ladies and gentlemen, I’m going to give you a few highlights and then I’m going to give the floor to the Chief Economist, and he will comment on what’s been happening in the economy and give you more facts. Now this is a typical quarter for ING.

We continue our growth without any surprises. We are implementing our long term strategy basically. We increased the number of retail customers by nearly 80,000 and for corporates, it’s 20,000. Now these are gross numbers. And annually, the total number of clients has gone up by 155,000.

This is a continuation of our strategy to increase our market share in terms of the number of customers. It’s an important indicator because it is a foundation for future revenues and future growth. We want for this growth to be real growth based on actual active customers. And these tend to be very active customers indeed. The increase of mortgage loans is an important indicator, and they have been going up very quickly for two quarters in a row.

21% was the market share for new production, and this is the second quarter running that we have been going up. We also have a 14 market share in terms of the portfolio of those loans. And this is because we have a good process and we are able to react to any inquiries from the clients quickly, make the decisions quickly because the process is by and large digitized. We are still working on streamlining it, but it’s been giving us very good results so far. Euros 5,000,000,000 is the total value of the mortgage loans in the second quarter.

Now for cash loans, again, this was one of the best, if not the best quarters in our history, which is 13% up year on year, a very good result. And we are going to focus on this product in the future too. So this is probably just the beginning of what is to come. In terms of the clients’ savings, I’m talking about the retail customers, we have to emphasize the very good dynamics in the sales of mutual funds with €20,000,000,000 in terms of the total capital in the funds. Now this used to be our Achilles heel, but now we are catching up with the market.

Now some things that we are not so happy about is mostly the corporate loans. And the growth here was 1.3% Q o quarter on quarter and about 3% year on year. And the emphasis falls on different elements here. The loans for small and medium sized enterprises or SMEs are going up faster. Also mid corporates, but we have not seen growth in lending to the biggest corporations, even though we participated in many transactions that should have translated into an observable volume growth.

Now the reasons for that is what we can see is that companies are interested in loans and the pipelines are getting filled up. So there is a lot of interest, but so far that has not translated into a net growth of lending. However, we can see that BGK and there are also other funds that are very active and they are an alternative to what we offer. So these are the data for this segment. We can see a lot of impact on the margins.

The margins are going down and sometimes they are down to levels that are not interesting for the bank, and we are not interested in offering these levels of margins. This is it by way of introduction. Let me now give the floor to Mr. Benetsky, our Chief Economist. Good morning.

I would like to comment on the situation in the economy and our forecasts. The Polish economy will grow by 3.5% this year. Now historically, this is not at a level that we remember from the past, but looking at the broader region, we are doing quite all right. And we had about 3% growth last year and that was better than any of our neighbors like Romania and Hungary in particular. In 2025, we will also outperform our neighbors.

Our forecast is 3.5%. Hungary and Romania are still quite weak. Romania is fighting its economic imbalance. It has to slash its very large deficit and that translates into lower consumption. Hungary focused on FDI and that’s not working.

Now the Czech Republic is doing better than those, but Poland keeps outperforming the region and also all of the EU. The main drivers of growth are the same. Consumption, which is going to grow by about 3% or 3.5% this year. And given the pace of growth, we can see that the spending of households is still quite solid. There is a good dynamics in deposits and there are more savings.

Household savings rate is actually quite solid throughout the Eurozone, and it’s higher for Poland than it was before the pandemic. That’s a very important part of our business model, by the way. So this should the situation should not change in the near future. Investment is another element we are hoping for. We have updated our forecasts of how the EU subsidies will be used.

And after the update of the reconstruction plan is that we can see that the absorption of EU funding that are handed over to the beneficiaries will be a bit lower in 2025, and it will go up in 2026 where this will peak. We can also say that public investment is starting to go up slowly but surely. These are the components of construction of the construction sector, specialist work, railways are going up quite nicely. But for infrastructure, it’s not it’s not growing that fast. And that has to do with what I’ve just mentioned, namely the delays in the disbursement of EU funding.

Poland has about 100,000,000,000 in terms of grants. We also have loans. So far, about €50,000,000,000 of the loans have been started and about €20,000,000,000 in terms of the grants. I’m going to discuss it at more length in a moment. So we are hoping for more public investment, in particular, this year.

And hopefully, investment is going to start. But so far, signals, as far as this is concerned, are quite pessimistic. One way or another, the Polish economy is growing in spite of the stagnant industry. We have had a stagnant industry for about two years now, and that’s very important for our business. The investment in industry was always dominant and very important.

Right now, it’s pretty weak, although it has to be said that demand in this area is starting to rebound slowly. So industry is still stagnant, but we are growing thanks to the services sector. And you can also see it in this graph. On the right hand side, you can see what types of services are growing, trade, how are you car and others, and also knowledge based sectors like professional and scientific activity. This includes business services, and that’s posting pretty significant growth these days.

Now in a slightly more longer term, we carried out a survey of about 50 clients, 50 companies. And it seems that the problem is not just because of weak exports to Germany, but also due to the fact that the cost of labor increase exceeded the increases in productivity. On top of that, there’s competition from China, and that translates into this rather stagnant market. Over a decade, we will spend billions in energy transition, defense and large capital projects. This is going to be funded by the state, so we are hoping for that to happen.

Germany is expected to grow at between 1.52%, so this is also going to be good for us, but it’s going to be felt in 2026 more than this year. Now inflation is going down. We will soon learn how high it was in July. We are forecasting it to go back to the target of 2.5%. In fact, our forecast is 2.8%.

And it’s going to continue like that for about one years, point we think. Now the reactions on part of Fiscal Policy Council is quite varied. We have corrected our or amended our forecasts. Going back to four points to this year and 3.5 next year, If not for those reductions in the rates, the real rate would have remained at about 2%, which historically is quite high. So these interest rate reductions mean that all in all the rate will go down, although historically speaking, it’s not going to be that low.

Now about lending and deposits. We can see that mortgages are becoming more active. This is because the situation has clarified in terms of there not being any subsidy programs for the residential property. The demand right now is mostly connected with the ordinary needs of the people. We are looking at about €80,500,000,000 in terms of mortgages and €86,000,000,000 next year.

And the lower interest rates are also a factor here, of course. In terms of corporate lending, we can see the first signals of things going up. The public sector is important here. The transmission networks and the energy sector is not that good in terms of private investment and demand from private companies, but we are hoping for the lending to rebound. Now we are a very deleveraged economy, so the starting level is very low.

The reduced interest rates should also contribute to the rebound and also the increased capital investments on the public side to begin with and then on the private side hopefully. We realize that these days, there’s a lot of sources of financing and there is a lot of competition to the banking sector. There are the loans from the reconstruction fund or the RRP, the recovery and resilience plan. There’s foreign financing. We can see that within international groups.

That’s a very important component. So these are the difficult conditions in which the banking sector is fighting for the market. In terms of the corporate lending, we can see a certain improvement in the dynamics, but we do realize there’s a lot of competition on the market. So this is it for me, and thank you very much.

Unnamed CFO, Chief Financial Officer, Bank: Good morning. I will quickly comment on the financial results of the bank in Q2. Let me start with net profit, 1,035,000,000.000, an 18% growth year on year in the context of six months. The result was PLN 2,149,000,000.000, that is 10% growth year on year. The growth is due to consistent growth of our commercial activity.

Michal mentioned growth in assets and liabilities in every segment, and they contribute to the net result, which you can see in the results before the cost of risk, 8% growth of our quarterly result year on year and 6% after six months year on year. This is a very good result. We can see it also in the cost of risks. The contribution of risk costs was 39% lower year on year. The costs are following the general dynamic.

Before I talk about other items, other revenues, 139,000,000 compared to €129,000,000 the previous quarter, a very strong quarter in terms of the cumulative results out of managing our trading positions, but also managing the positions from our ledger. Here, I’d like to point to two elements. On the one hand, we have PLN 52,000,000 of positive result on derivatives based on interest rate. This is directly linked to managing the economic value of our balance structure. And in fact, it is also an equivalent of the positions, which in principle reflects the increase of economic value of EBPD for the interest results.

So they contribute to the interest margin even if they are not presented in this margin because they come from derivatives. On the other hand, we also have another quarter where we are seeing very high financial results coming from trading positions and FX positions. This is also a natural activity of our treasury and trading in the context of high volatility in financial markets, which we’ve seen in Q1 and in Q2 in the context of unexpected changes of interest rates that have taken place in this quarter. So from this point of view, you have to look at this result in the context of managing our balance as a whole. One other thing, in the structure of this position, can also have €46,000,000 of a negative revenue out of ineffective hedges.

Some of you probably remember that we’ve had a similar situation back in 2023. This is linked to accounting impacts stemming from the fact of maladjustment between hypothetical derivative and the due date maturity of assets which are used to secure derivatives. This will reverse in the horizon of the coming six months. Our interest result. I wanted to comment on what happened on the commission fee, euros 2,173,000,000.000.

This is a 2% drop quarter to quarter. But also, if you see it in connection with €52,000,000 that I mentioned on the results on derivatives, if you hypothetically move it to the interest commission, there is no negative impact. On the other hand, you also have to observe that in this quarter, in spite of positive changes in the balance structures that are positively contributed to the commission income. We also have increased funding cost of promotion for new resources, which in the context of lower interest rates, this has an impact. Products loan products in the banking sector are competitive, and this influences the margin.

We are seeing repricing of bonds that we have in our portfolio. This is a part of our bonds have matured. They have been replaced and they had a very high yield. They have been replaced with lower yield bonds, and this contributed to the lower interest margin. In other items, you see €6,000,000 on sales of bonds and securities, they would also contribute to the interest margin.

So from your comments in the morning, the negative impact of our interest margin in Q2, if you sum up all the developments that I’ve been talking about, I can I think I’ve proven to you that this impact is not as negative as it would seem at first glance? We are stable in terms of how we manage our interest margin. This quarter has seen a big change of unexpected change of interest rates. The curves The decisions of the Monetary Policy Council in April have been unexpected, and this is reflected in our results.

But we have also shown I have shown to you that this margin is, in fact, stable, and it supports our long term approach to effective management of interest rate risk irrespective of where we are in terms of changing interest rates. I also wanted the cost to deposit ratio. We’re happy that slowly, we are increasing this number at the end of Q2 is 76.3%. We don’t have the results yet from other banks. But looking at the results of the banking sector that have already been published, it’s one of the highest indicators in the sector.

The commission income is one of the highest in terms of net fee and commission income. It’s 1% growth quarter to quarter, 54,000,000. What matters particularly is 11% growth from cards. We see more transactions. We see higher numbers of credit cards that contribute positively through the number of transactions into the commission income.

We also have 11% growth from our participation units, and this is linked to the growth in assets that we distribute. 2% growth in FX commission, this is linked to the volatility that we see, but also many more transactions by our customers and clients from the corporate sector. In terms of what happened in the first six months, 12% growth in income from the equity market, 7% improvement in terms of insurance, rising share of mortgages and 6% growth from the accounts that we are managing. This is a result of the activity of our customers. A short comment on costs.

The costs of the bank’s operation, 1,253,000,000.000. It’s a 10% drop in terms of the cost in Q2. But if you adjust it for regulatory costs, including the banking tax, Quarter to quarter, our basic costs have increased by 6% quarter to quarter, 5% year on year. Let me just point out the employment costs, 5% up. This is directly linked to the decisions that we have made in April about pay rises for our staff.

Also increased costs of general and administrative costs growth 11% quarter to quarter. If you look at this category year on year, it’s six percent growth, which is a result of our needs and activities and the projects that we’re running. A short comment on the cost of risk. Cost of risk in Q2 were €193,000,000 As I mentioned, this is 39% drop year on year. On the one hand, as you can see in our presentation in this quarter, we see a positive contribution of macroeconomic parameters, euros 53,000,000 in provisions, 19,000,000 in retail, euros 34,000,000 in corporate.

In this quarter, we’ve also sold irregular liabilities, which had a positive contribution in retail in particular. Here, we have €43,000,000 of positive impact. When it comes to the increased cost of risk in Corporate Banking, look at the six months this year compared to six months of last year in terms of cost of risk. Here, you can see some stability. The cost is lower this year compared to 2024.

The quarterly increase in corporate is an element of increased provisioning of Stage three loans for a number of exposures that we have. In Retail Banking segment, we have a net dissolution of provisions. We’ve released provisions, very good performance of cash loans, but also mortgages, especially after the mortgage holidays ended. And you can see that on the next slide where we’re showing you how our portfolio looks, the portfolio quality and provisioning. Third quarter in a row where the NPL is 3.9 for the whole bank.

This is below the average in the sector. And here, we have a positive contribution of the sales of our irregular loans, both in terms of retail and corporate segments. Here, you can see, in particular, the improvement of NPL in retail loans, and that can also be noticed in mortgage loans. I would also like to point out the share of Stage two, particularly in retail banking, down to 3.8% from 11%. This is very directly linked to the declassification from Stage two to Stage one.

This is due to increased cost of risk. They have been reclassified to Stage two, and now they’re being reclassified to Stage one, mainly Stage one.

Piotr Utrata, Spokesperson, Bank: And as you can see, in Stage three, the provisioning ratio has also gone up when it comes to all the segments net, and that’s related to what I said before about increased provisions for Stage three loans. And finally, just some words about capital adequacy. 15.66% of TCR, which is less than on in the previous quarter. And the main effect is the improvement resulting from the sales of loans in that quarter. And I think that’s it from me.

I think we’ll throw the floor open to questions. Yes, let’s start with the questions from the floor here in the room, if there are any. And if there are none, then we’ll move on to the questions from the Internet. I would like to ask the CEO about the financial performance. And first of all, what do you think the future evolution of the profitability of interest assets will be in the second half of the year.

We do not comment on this sort of forward looking data from the point of view of net profits and interest performance, we can see that the interest rates are going down of course and that translates into a certain sensitivity to interest rates in terms of our net profit. But we believe that our sensitivity to it is low, and this is due to how we manage the interest rate risk in our ledger. We have seen the changes of the interest rates in the second quarter now. And when it comes to the sensitivity, when there is a reduction of 100 basis points, it has gone up a little bit compared to the previous data. It’s about million.

And this is natural. We talked about it before. The lower the rates, the higher the sensitivity. So that’s on the one hand. There’s always going to be some impact of interest rate changes on our net interest profit.

But on the other hand, it’s also due to the increase of volumes. Now this is a strategic factor for us, especially for the retail segment in addition to net interest income. We also have our promotional policy whereby we are getting new customers and clients as well. Thank you. My second question is, are you do you have any forecasts about a potential impact of the interest on the obligatory provision on your performance?

Well, I can only refer to what was said in the official communication from the Ministry of Finance. The expected impact will be between billion and PLN2 billion and this is an impact on all the banks. More or less, I believe this will be proportional to the share that a particular bank has in the banking sector. We don’t know the details yet. We only heard about this amount of 1,500,000,000.0 to €2,000,000,000 in total from the banking sector as a whole.

And my last question, why is there so much interest in fixed rate mortgage loans? Why do you think this interest is so high? And how will it evolve in the future? Fixed rate loans are going down in terms of their share. It’s very clear.

In Q4, the rate was much higher, about 80%. It has now gone down to 38%. I’m talking about the share of a fixed rate. I’m sorry, 60% fixed rate, and the remainder is floating rate. So the share of fixed rates is going down.

That’s my point. And that’s not surprising. If interest rates are going down and if there are expectations that interest rates will continue to go down, the customers often choose floating rate because they are hoping it will go down in the near future and they don’t want to be stuck with a fixed year fixed rate for five years. And we think an equilibrium has been reached, the two types of loans cost more or less the same, and the preferences of the clients are normally related to the amount of the monthly repayment. People normally look at what the monthly repayment is going to be in the near future.

Thank you. Could the CEO tell us more about the strategic priorities that he has for the nearest future in the bank? Certainly. We have now completed our revision of the bank’s strategy. We will be presenting it on the November 19, and that’s also when we are going to communicate this strategy to our employees because we would like to let our team know what’s going to happen first and only then will we make this public.

This analysis was based on our strategy so far, and we approached the individual departments and sections of the bank to come up with proposed changes to the strategy. All in all, our employees came up with over 1,200 ideas and initiatives that we had to then assign to the different pillars of the strategy. A lot of that has to do with improving and streamlining customer service. For example, less reliance on brick and mortar branches in providing customer service. We would like to be able to solve every problem online in a very frictionless problem I’m sorry, in a frictionless way.

Because sometimes if there is what we call friction, if there is a problem or a challenge, then very often the customer has to come to a bank branch in person and not all of these processes can always be completed online as things stand now. There are also some more significant challenges that we still have to think about how to deal with. The thing is we have to have these plans in hand and be ready to implement them because otherwise, we’ll announce our plans and other banks will jump on the bandwagon and do the same. We have to modify our approach to working from home and how we use the office. We would like to encourage people to use our offices more because we can see there is an impact on the organizational culture of the bank from working from home, and we would like that to change.

There’s a lot of initiatives related to private banking, and that’s something we’re putting a lot of emphasis on. For example, the increased sales in terms of mutual funds is a good beginning. Now we are a rather conservative bank, and we have been very cautious in approaching offering mutual funds. We looked at it from the point of view of the different risks, risks, which we still believe are there. We will encourage the sales of mutual funds in a careful way, and that has to deal with the brokerage house and our private banking network.

But again, we will be giving you more information very soon. It’s not going to be at the end of Q3. It’s going to be slightly later, on the November 19. We believe we want to complete all of the work in house, and then we will share this information with you. We’re a systemic bank.

We’re a bank that has a mission. That’s how we perceive our role. So there are some things that we will continue to do irrespective of what the market is doing. We want to have an offer that’s interesting for broader society. Thank you.

We’ve got some online questions now. And this might clarify some of the things that our CFO talked about. There is a significant improvement in derivatives and FX in the first half. There was a growth of 95%, over million. Where is this where did it come from?

I thought I gave an answer to this, but let me say this again. The volatility of FX rates that we have seen this year and an effective management of our trading positions, including FX and also the changing FX rates between different currencies had this very positive impact. And this is part and parcel of how we think and how we approach our strategy of managing FX and income. Basically, our traders are very good and very experienced and they are very good at utilizing every opportunity that appears in the market. And we’re also trying to maximize the volatility or maximize the utilization of the volatility that stems from our FX position.

We also have a question about the cost of hedging. They remained flat Q quality quarter in spite of the reduction of the rates. What is the reason for that? When will the negative impact of hedging on financial performance go down given your predictions concerning the interest rates? When we look at macro cash flow and hedging, we have to look at the complete provision.

Now this quarter, it has gone down by PLN1 billion. And this, I think, shows us our hedging strategy will impact the net the margin income. You shouldn’t analyze it from the point of view of a single quarter. We should analyze it from a longer time perspective. The interest differential historically compared to the maximum level of the rate was what we have seen in Q1 and Q2.

So I would encourage you to look at what’s been happening with the revaluation provision rather than looking at the short term quarterly impact of the macro cash flow hedge on the interest margin. Kamil Stanetsky, Santander Bank, does ING believe that the mortgage loan is a good product because some banks seem to be questioning that? We’re a bank. The mortgage loan is a fundamental banking product that we’ll continue to offer. We are not afraid of the different risks that may appear at different stages of the development of the Polish property market.

It’s part of our mission as a bank. We realize that demand for residential property may go down as a result of the demographics, but we can also see that there will be a growing number of single person households and that will translate into a boast for demand. It is estimated that about 1,000,000 apartments are still missing in Poland, are still needed. Now we had problems with the Swiss franc debacle in the past as the banking sector. There are now potential problems with the benchmarks like Vibor and Viron, but we believe that this should not impact what we do about mortgage lending.

I can’t imagine banks withdrawing from offering this product because that would result in an economic crisis. It would stop the growth or indeed trigger a recession. So I don’t really understand this comment. How could anyone possibly consider this product to be something that will be curbed as a result of momentary conditions. All right.

Since there are no further questions from the room, let me move on to the last question from the Internet. We do actually have a question from the floor. My question to the CEO is as follows. We have seen your forecasts for corporate lending, and you mentioned that some of your competitors have brought margins down to a level that can hardly be called bankable anymore. There are certain volumes being generated.

They might not be as good as you expected for the SMEs, especially they’re at lower levels. So having heard what Rafaou said about the economy looking like it’s going to accelerate in 2026, do you think that there’ll be a boost in this sector in the second half or only in 2026? We

Unnamed CFO, Chief Financial Officer, Bank: are hoping that things will pick up this year. We see in the pipelines that there are many topics more than ever in the last two years at least. Whether it will translate to these loans being launched in Q3 or Q4, it’s very difficult for me to predict. But there are more factors that influence the situation. These loans are not growing as a result as much as we hoped.

The regulations that we mentioned many times influence both the costs of the products and the cost of building that may restrict investments by companies. The activity of BGK, the funding from RRP. If we don’t provide loans, if money will come from other sources and the market is relatively narrow, the margins that we’re dealing with are lower than ever in the last twenty years, I think I can say that. ING, let me add, the corporate loan margin is not just an element of a tender. It’s an element of a relationship that involves other products and solutions that you supply.

The stability and predictability of the relationship that you build over time. So of course, on the basis of our negotiations with customers, we can achieve margins that are acceptable to us. If it goes below that level, which is acceptable to us, we will wait or we will not focus on this as a priority because when, at some point in time, there will be a weakened demand, there will be an economic crisis, We’re getting margins to compensate possible losses. If margins are not sufficiently high, it wouldn’t make sense. What we see in the structure of loans, we’ve had loans investment loans spread over time, longer tenure, not just trading loans in 2022, ’twenty three when the market was waiting for interest rates to go up because inflation was rising.

Companies were buying stocks to hedge themselves from the increased cost of the goods. We’re not dealing with that at the moment. There is a reversal in terms of inflation, and the trend is going the other way. So what we’re seeing is investment loans unlike what was happening before. So we’re seeing more investment loans.

Looking at last year, it was relatively flat, as you can see. Now we’re seeing an improvement, but we’re waiting for the big infrastructure projects. Apart from wind farms and the energy projects that are underway or at least are materializing. But they the rest have been announced, but they’re not happening yet. Once they get underway, when there are procurement public procurement exercises, we will be actively involved even those that we’ve not been interested in to date.

So I assume that these projects will get underway very soon. The Warsaw Airport is going to be developed. There will be more big projects coming in the coming months. Any more questions from the room? Let’s move to the question from the Internet.

Model loan contracts, will the bank use a model mortgage loan text? And Wokik, the Consumer Protection Office, is working on this project. I’ll be happy to comment on this because we are an active participant in the Union of Polish Banks. We are supporting and working on the model contract. We are in dialogue with UO KIK, the Consumer and Competition Protection Office is getting better.

We are nearing consensus, aligning the expectations of the banking sector and consumers and the Consumer Protection Office. On the one hand, mortgages are very important for the general public. On the other hand, there are many elements that contribute to the changing interpretation of provisions by law firms in particular. Having this model contract is very much desired, so we are very much supportive of it. As a result of having this model contract for a mortgage loan, it will not matter how a mortgage loan is built.

What will matter is the commercial offer and the service provided by the bank. It will simplify the process for the bank and for the consumer. This will be a model supported by all regulators. It’s not just the consumer and competition protection, but also the financial services authority and other regulators that involved. And we’re hoping that this model contract will be introduced through an act of law to reinforce the security of the product.

We’re big fans. We’re very much involved. And we are hoping that this model contract will come to be very soon together with a definition on how do you define early repayment. This is something that has not been completely addressed, and it has been peculiarly interpreted compared to other EU member states. So we need to reach some final decisions here.

Thank you very much. These were all the questions. Others online have already been addressed by members of the Board. Thank you very much, and I would like to invite you to attend our conference on the October 30.

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