Good morning. This is Patricia Kruiswijk welcoming you to ING's first quarter 2022 conference call. Before handing this conference call over to Steven van Rijswijk, Chief Executive Officer of ING Group, let me first say that today's comments may include forward-looking statements, such as statements regarding future developments in our business, expectations for our future financial performance, and any statement not involving historical facts. Actual results may differ materially from those projected in any forward-looking statements. A discussion of factors that may cause actual results to differ from those in any forward-looking statement is contained in our public filings, including our most recent annual report on Form 20-F filed with the United States Securities and Exchange Commission, and our earnings press release, as posted on our website today. Furthermore, nothing in today's comments constitutes an offer to sell or a solicitation of an offer to buy any securities.
Good morning, Steven. Over to you.
Thank you very much, operator. Good morning and welcome to our first quarter 2022 results call. I hope you're all well. I'm joined by our CFO, Tanate Phutrakul, and our CRO, Ljiljana Čortan, and I'm pleased to take you through today's presentation. After that, we will take your questions. For the first time in two years, I start this presentation by saying that from a COVID perspective, circumstances seem to be normalizing, which is positive. However, challenges remain with the invasion of Ukraine, which is adversely affecting people, including our colleagues, as well as already high energy prices and disrupted supply chains. Under these circumstances, we help colleagues to safely relocate and manage the risk of our Russia-related exposure.
At the same time, we focus on our strategic priorities by financing the green transition and improving our digital channels, and we continue to deliver value. This was reflected in a higher pre-provision profit driven by resilient NII, higher fees and lower costs, as well as a healthy return for our shareholders with a final cash dividend of EUR 0.41 and a EUR 1.25 billion additional distribution announced today. On NII, after years of current reliability pressure, with the current yield curve, we have reached the point that this pressure is turning into a tailwind. Mortgage loans continue to grow, while in Wholesale Banking, we saw repayments of short-term TLTRO facilities. On fees, we record a strong 9% year-on-year growth, mainly visible in daily banking and lending. Investment products remains at a high level. Costs were lower both year-on-year and quarter-on-quarter, despite inflation.
Risk costs were elevated at EUR 987 million, mainly in stage two, driven by actions we took on our Russian portfolio, comprising 84% of risk costs. We have reduced that exposure over the past two months by almost EUR 1 billion. The stage three ratio was lower at 1.4%, and we remain confident on the quality of our loan book. The CET1 ratio declined to 14.9%, mainly driven by RWA growth, primarily for Russia-related exposure and Dutch mortgages. Before we go to the quarter figures, I will spend some time on our pre-provision profit and highlight our efforts to finance the green transition and to improve our mobile channel. Our pre-provision profit was up 14% year-on-year and 9% quarter-on-quarter. A strong start to 2022, and I'm particularly happy that all key P&L lines contributed.
NII, excluding TLTRO, was up on both comparable quarters, which is a meaningful signal in the context of the liability pressure of the past years. With the yield curve normalizing, we can reinvest our replicating portfolio in more positive yields. As we always said, the effect will come in over time. However, over 2021, we had approximately EUR 600 million drag from negative rates. That drag has now disappeared. Excluding TLTRO, we expect NII to be up in 2022. At the same time, ECB has not yet increased rates, so for now, negative interest rate charging remains in place with the current contribution of EUR 300 million for the full- year. With inflation higher for longer, the ECB looks set to start normalizing monetary policy in the summer.
The timing is difficult to predict, but we expect the ECB to have ended net asset purchases and negative deposit rates before year-end. In non-Eurozone countries, central bank rates have already gone up, most notably in Poland, and we again see the benefit of geographical diversification. The fast increase of rates impacted lending margins this quarter, as client rates generally track higher funding rates with some delay. Also, with low rates, NII was supported by a high level of pre-payment penalty income, which tend to return to more normal levels when interest rates go up. Going forward, the yield curve development will be supportive of NII growth. On fees, we had a strong 9% growth year-on-year, and also on the current higher fee level, we maintain our ambition of 5%-10% annual growth.
Operating costs were 2% lower year-on-year and 4% lower quarter-on-quarter, despite inflationary pressure, which was mainly visible in salaries in some other countries. Although higher inflation is set to continue, we maintain our commitment to keep costs at least flat. One of our three priorities to finance the transition to a low-carbon society and additional steps taken are shown on slide four. This transition is a necessity, and for us it is also a business opportunity. In power generation, we have been focusing on a transition since 2015, where we shifted away from fossil fuels and towards renewable energy. Our efforts are visible in the growth of their portfolio, doubling over the past five years, while fossil fuels almost halved. Going forward, we aim for faster growth of new renewable energy loans to a 50% higher level by 2025.
At the same time, we will not finance new dedicated oil and gas fields. Also in retail, we have taken steps to help customers become greener with the launch of a green mortgage in the Netherlands. I'm proud that our expertise is recognized also by our clients, such as VodafoneZiggo, whom we supported in their sustainability-linked bond as a debut one, and also by external organizations with two green transactions receiving awards in their respective categories. On slide five, we focus on another strategic priority, which is our digital journey. The importance of the mobile channel continued to increase, and it is positive as expanding our mobile offering both improves customer experience and reduces cost to serve. This slide demonstrates that approach to digitalization with a focus on more incremental projects with higher execution certainty rather than large multi-year projects.
The examples show expanded digital capabilities for our customers, which help the top line as our customers take up more services, and at the same time, we invest in digitalizing processes to both improve efficiency and customer experience by a higher first time right and shorter time to yes. As a proven example, two quarters ago, I mentioned digitalizing the Dutch mortgage process, where we reduced our time to yes, and as the process became more efficient, it also allows us to handle higher volumes when needed. A similar story we have on our investment offering in Germany, starting some years ago when we launched a fully digital process to open investment accounts. This resulted in continued high growth, with the number of new investment accounts opened in the first quarter at 121,000, of which one-third customers are new to ING.
I'm happy we also receive recognition from our customers with good NPS scores and this quarter being named best or preferred bank in Germany and Poland. As part of the digitalization strategy, we selected 60 main processes for which we will maximize the end-to-end digitalization, and we will elaborate on this during our investor day on June 13. We shall hope you will join in person here in Amsterdam or otherwise virtually. Let me now take you through our first quarter results, starting on slide seven. Year-on-year NII, excluding TLTRO benefit, was up 1.6%, benefiting from higher results in treasury and financial markets and higher lending volumes. We saw some pressure on lending margins reflecting a delay in tracking higher funding rates.
NII went up 1.3% quarter-on-quarter, again supported by treasury and financial markets, while we saw the liability pressure on liability starting to turn into a tailwind, partly offset by a lower level of prepayment penalty income on mortgages. Our net interest margin was stable at 130 basis points as the higher NII was offset by a higher average balance sheet. Slide eight shows net core lending growth. In retail, mortgages were again the primary driver of growth, but also some growth in business lending. Mortgage lending demand was strong in Germany, but also Australia and Spain. In wholesale banking, loan growth was affected by repayments on TLTRO-eligible deals, mainly on short-term facilities in financial markets. When we look at the pipeline, we see sizable demand is there, so we're positive on loan growth in wholesale banking.
However, given a higher level of macroeconomic uncertainty for 2022, we expect this to be below our 3%-4% growth ambition. Net customer deposits growth was -EUR 700 million. In Retail, it came down by EUR 7 billion, mainly due to an outflow in Germany following the introduction of negative rates per November 2021. Wholesale Banking recorded a seasonal inflow of EUR 6.3 billion. Turning to page fees on page nine. Year-on-year, fee income grew by 9%, with growth in both retail and wholesale. Retail fees were up 6%, with an impressive 26% increase in daily banking fees, and this reflected growth in primary customers, the increase in payment package fees, and a recovery of the level of domestic payment transactions back to pre-COVID levels, while international payment transactions still have room to grow.
In investment products, fees were lower, although still at a consistent high level, as the year-ago quarter was a record quarter in terms of brokers' trades. In Wholesale Banking, fees were 17% higher, with lending as the main driver, reflecting a higher number of syndication deals. Sequentially, retail fees were 1% higher, driven by investment products. In Wholesale Banking, fees also up 1%, mainly reflecting higher fees in lending, offset by a lower level in financial markets and corporate finance, following a peak in the previous quarter. Slide 10 shows expenses. Excluding regulatory costs and incidental items, operating expenses came down. Year-on-year, these costs were 2.1% lower, mainly reflecting lower FTE and lower IT costs, which more than absorbed higher salary costs driven by CLA increases and indexation. Quarter-on-quarter, costs were 4.2% lower.
That's lower marketing and performance-related expenses, while costs in the fourth quarter tend to be seasonally higher. Regulatory costs were up year-over-year. This mainly reflected the higher contribution to the European Single Resolution Fund. Quarter-over-quarter, the increase is explained by the full payment of the annual contributions to the SRF and Belgian DGS in the first quarter of each year. This also applies to the annual Belgian bank tax, while the fourth quarter included the annual Dutch bank tax. There were no incidental cost items this quarter, and I'm pleased with the development of operating costs also as we see some effects of measures taken so far. At the same time, we also need to look forward, and we will invest in areas where we can get the best return.
On to risk costs, which were EUR 987 million or 62 basis points of average customer lending. This level is mainly driven by EUR 834 million or 52 basis points of provisioning in Wholesale Banking related to Russia. This was predominantly in stage two for rating migration following the sovereign downgrade for stage migration, as we have transferred clients to watch list and for our management overlay. In stage three, the Russia-related inflow was limited to EUR 71 million, as the book generally remained performing. Furthermore, we booked EUR 178 million, reflecting updated macroeconomic indicators, and released EUR 124 million in sector overlays, which were taken in previous quarters for vulnerable sectors during the pandemic. Aside from these movements, risk costs were limited.
In Retail Benelux, risk costs include a release following the expiration of payment holidays, while in challenging and growth countries, risk costs reflected collective provisioning, mainly in Germany, Poland, and Spain. In Wholesale Banking, stage three risk costs included limited additions to both new and existing files. Finally, stage two ratio was up, reflecting the aforementioned additions, while the stage three ratio went down to 1.4%. Regarding potential spillovers of the situation in Ukraine, we see Eurozone economic growth impacted and expect inflationary effects to stay longer. While we don't expect a recession, a stagflation scenario is a possibility. We're closely monitoring our loan book and engaged with our clients. However, so far, we have not observed a meaningful impact on credit risks. Slide 12 provides some details on our Russia-related exposure as of 30 April.
Since the end of February, we have reduced our Russian exposure by EUR 900 million and continue to bring this down. Of this amount, EUR 1.3 billion is onshore, with EUR 200 million covered by European parent guarantees, and part of the remaining exposure is central bank deposits. Our local capital is EUR 100 million, and we have no internal guarantees outstanding. EUR 1.2 billion was offshore, covered by ECA and CPRI, which is the outstanding amount. Undrawn committed facilities are EUR 700 million, and notional hedge exposure is EUR 600 million, which is related to client business. Our financial markets colleagues did a good job over the past two months reducing the amount, and we work to reduce this further.
As mentioned, we've taken EUR 800 million loan loss provisions, which reflect capital impact from expected losses, while RWA impact reflects unexpected losses. RWA on our Russian exposure has tripled in the first quarter, reaching EUR 13.3 billion. At 12.5%, this is equivalent to a EUR 1.7 billion capital impact. Combined with the risk cost, this amounts to EUR 2.5 billion of potential impact already included in CET1 capital. Our focus remains on reducing Russian exposure. We don't do new business with Russian companies, and a material part of our Russian exposure is short term. Regarding sanctioned entities, please note repayments for ING are allowed and are being received. The next slide shows that our CET1 ratio came in lower at 14.9%.
The decline was driven by higher RWA, which were up by EUR 21.8 billion, including EUR 1 billion FX. This was primarily due to EUR 19 billion of higher credit RWA, excluding FX, which included EUR 7.3 billion for the risk weight for on Dutch mortgages introduced by the central bank and EUR 9 billion added for our Russian exposure. Furthermore, market risk-weighted assets were up, driven by market volatility, while lower operational RWA reflected the update of our AMA model. CET1 capital was EUR 100 million higher, mainly due to the inclusion of 50% of net profit for the quarter. With net profit being equal to resilient net profit, the other 50% was reserved for future distribution in line with our policy. On our distribution plans, the final 2021 dividend was approved at our AGM 2022 and will be paid out on the ninth of May.
In line to converge our CET1 ratio ambition, we will distribute an additional EUR 1.25 billion, and this amount has been rightsized to reflect increased macroeconomic uncertainties. This additional distribution consists of a cash component and a share buyback, with the split derived from Dutch withholding tax requirements. Based on this, EUR 0.232 per share will be paid out on May 18, and the share buy-back for the remaining amount will start on May 12. The additional distribution will bring our CET1 ratio pro forma to 14.5%, and I'm pleased we take this additional step in returning capital to our shareholders and to optimize our capital. As you can see on slide 14, CET1 ratio remains well ahead of our ambition. On ROE, we saw some impact this quarter from the elevated risk costs.
However, with the continued growth of customers, loans, and fees, as well as focus on costs and capital optimization, we maintain our ambition to provide an attractive total return. Cost income remains an important input for our ROE, and we continue to work on our ambition of 50%-52%. To wrap it up with the highlights of the quarter. This quarter presents a new challenge with the invasion of Ukraine, and I'm actually very proud of how we deal with this. We're focused on our people, and we manage the risk of Russia exposure while we keep the focus on our strategic priorities, including financing the green transition and improving the digital channel. Last but not least, we continue to deliver strong performance financially.
This was reflected in a higher pre-provision profit driven by resilient NII, higher fees, and lower costs, as well as a healthy return for our shareholders. Risk costs were elevated at EUR 987 million, mainly in stage two. The stage three ratio was lower at 1.4%, and we remain confident of the quality of our loan book. The CET1 ratio declined to 14.9% with 50% of the first quarter resilient net profit reserved for future distribution. The main driver was RWA growth, primarily for the Russia exposure and Dutch mortgages. Finally, on capital distribution, we will pay a EUR 0.41 final cash dividend and a EUR 1.25 billion additional distribution as announced today. With that, we will go to questions.
Thank you, sir. We're starting the question and answer session now. If you have a question or remark, please press star one now on your telephone. In the interest of time, we kindly ask each analyst to limit yourself to two questions only. Please press star one for your questions or remarks. Go ahead. Our first question is from Mr. Robin van den Broek of Mediobanca. Go ahead, your line is open.
Yes, good morning, everybody. Thank you for taking my questions. Yeah, the first one is around the Russian exposure and the actions you're taking this quarter. I mean, in your introductory comments and in your slides, you mentioned basically a cover within the CET1 ratio of EUR 2.5 billion. You also emphasized the faith you have in your track record on your risk framework. I'm just wondering, to what extent do you think this EUR 2.5 billion should cover basically the future? Is that base case? Is that worst case? Can you talk a little bit through your thinking here? Is this done for you, or do you see big risk of additional provisions to be taken down the road? That's question one.
Second question is more about NII. Good to see that repricing in first quarter has already become a tailwind. Since first quarter average swap curves obviously that has gone up quite a bit more. I was just wondering if you could give a little bit of guidance on what kind of tailwinds we should expect here. Cause I think this could be high-teens EUR millions of quarterly tailwinds for your NII trajectory, which is quite substantial. Thank you.
Thank you very much, Robin van den Broek. I will give the first question to Ljiljana Čortan and the second question to Tanate Phutrakul.
Thank you for your question. Yes, correctly, we have had the elevated risk costs with respect to the Russian situation of EUR 834 million, as you noticed. In trying to show to you how much we feel confident and adequate with current provisioning and impact on capital, we have summed this impact of the LLPs, so EUR 834 million, with the additional impact that we have experienced through inflated RWAs, which have resulted in additional EUR 1.7 billion capital set aside for this cost. These two are summing up to the EUR 2.5 billion that you are saying. First, on the risk cost, as you've seen, only EUR 70 million out of these risk costs refer to the really defaulted exposure.
The rest, stage two, which is following our very prudent risk management framework, our governance and processes in place, is actually reflecting the downgrade of the Russian-related exposure and as well certain watch listing of the clients taking a prudent approach. On top of that, you have seen that we have in the 60 days, we're able to actually manage down our exposure by additional EUR 1 billion. All actions are showing that currently we feel our best estimate is adequately provisioned and adequately capital impacted.
Okay. Tanate?
Robin, on our NII, if you look at our fourth quarter disclosure, you can work it out that basically we had a reduction because of replication of somewhere around EUR 600 million in 2021. As Steven has said, that depression or that contraction has stopped in first quarter. Now what we see is that this tailwind will continue into the future. You're right that as long-term rates continue to rise, that the replication benefit gets bigger. I think what is a big impetus in terms of NII is when the euro, the ECB discount rate gets to move, right? Because we do barbell replication, which means that a considerable part of our replication sits in the three-months bucket.
If the ECB, as anticipated, would move the rates in July, that would accelerate the tailwind that we have today.
Just to come back on that second part, I think in the past there was the market at least had the perception that a rate hike from the ECB would initially be a headwind for NII. But I think now you're saying you basically shortened your duration and that's no longer the case?
Well, I don't think we ever said that rising rates is bad for banks. In fact, it's the opposite. We think rising rates coming out of negative rates is actually positive for financial companies and positive for ING in particular, given our big retail deposit base. I think rising rates from the ECB will be indeed more beneficial to us.
Also the part from negative to zero, basically. I think that's the more doubtful part of the sensitivity. Can you quantify that by any chance?
Well, we'll give you a bit more detail on Investor Day, but what we can say now is that, as we mentioned, the EUR 600 million compression we saw last year has disappeared, and that we expect actually this year that excluding the TLTRO impact, that our NII will be positive this year.
Okay. Thank you very much.
Our next question is from Mr. Stefan Nedialkov from Citi. Go ahead, your line is open.
Yeah. Hi, guys. Good morning. It's Stefan from Citi. I have a couple of questions. On NII, just to confirm the guidance of up in 2022, excluding TLTRO, that includes two rate rises by the ECB? Also if you can confirm what lending margin assumptions you have in that guidance. I feel like one of the messages that you've been trying to get across in your presentation is that lending margins are under pressure at the moment because yields are not tracking the increase in funding costs. Are you basically saying that you expect re-pricing to become stronger for the rest of the year? That's my first question on NII, what rate assumptions and what lending margin assumptions you have. The second question is on Russia.
It seems that you're effectively silently writing down the exposure to Russia, both onshore and offshore. You have around EUR 2.5 billion of combined P&L and capital impact. You're not exiting Russia, unlike some of your other peers. What's the strategic thinking here? You're appeasing shareholders by taking a large provision, but you're keeping the optionality for the future. Is that the thinking? If I may add a super quick third one, on fees. Can you quantify the contribution of partnerships to fees at the moment, from partners like AXA, Scalable Capital, et cetera? Thank you.
Yeah, thanks, Stefan. I'll take the question on NII and fees, and the question on Russia, I will do as well, actually. On NII, first question was, does this already assume the rate hikes of the ECB? Answer is no. We basically say that already with the current improved yield curves that we see, the negative drag has completely gone. NII, excluding TLTRO this year, will be up compared to the last year. We expect it to be up compared to the last year. In that light, with regards to lending margins, what we have seen is that the pricing to the street was up actually across the board in many countries, but also our cost of funding went up.
Typically, you see that the cost of funding it takes time to fully price in the cost of funding into the street price as well. That's what we have said with that. It takes time for that cost of funding to fully materialize in the market price. Still, arguably, there is still a lot of liquidity in the market. That also means that we don't necessarily expect a big increase in margins at this point in time, at least not on the lending margins to our clients, but on the liability income, we have actually turned the corner, and that's actually benefiting the NII going forward. On Russia.
Well, look, first of all, we wanna keep the people safe, which is what we do also in Russia, by the way, and we are making sure that we fulfill all the sanctions. With regards to the book, what we want to do is to make sure that we actually get re-paid. We have said we don't do new business with Russian clients. That basically means that we continue to decrease our exposure, gradually winding down our exposure. You've already seen in the first two months our exposure came down by EUR 1 billion. We have part of our remaining exposure is short-term facilities, and part of it is more project finance, which is supported by ECA and CPRI insurance.
This is the way for us to actually gradually wind down the book and decrease our exposure in the interest of all our stakeholders, including our shareholders and our savers. Regarding fees, I mean, like we said, but I will not dwell on the many elements that we have or pillars we have to grow fees. We also work with partnerships, either directly or indirectly. We haven't split it out separately, but the fees of the partnerships with such as AXA and Scalable are relatively small, but they also help in the overall, let's say, client experience that clients have with us, which will help NPS and which will in turn also help the quantity and therefore the quality of their interactions with us, and therefore also the business they do with us.
Yes, fee business of partnerships is still relatively small, but it also helps the overall experience they have in doing business with us, and that also helps our fee business overall.
Okay. Thank you, Steven.
Our next question is from Mr. Kirishanthan Vijayarajah, HSBC. Go ahead, please.
Yes. Good morning, everyone. A couple of questions from my side. When I look at the RWA, and the ratings migration there, it looks like you've actually had positive ratings migration if you exclude what you've done for the Russia exposure. I wonder if you could talk a little bit about which portfolios outside of Russia have driven that kind of positive ratings migration and really what the risk that reverses in the next few quarters, just given what we're seeing in the macro. Just coming back to the fees, you know, the growth this quarter is obviously heavily skewed towards the wholesale bank. You know, focusing on just the retail fees, do you think you can replicate the same kind of double-digit momentum you posted last year?
In your mind, you know, which of the retail markets where you think you're still sort of punching below your weight, in terms of particularly kind of investment product penetration, just sort of more of a forward-looking commentary there on retail fees, would be helpful. Thank you.
I will thank you, Kiri. I will take the question on fees, and Ljiljana will take the question on RWA. With regards to fees, like we said, I'm confident that we can continue to grow also this year our fees by 5%-10% per annum. Why am I confident about that is different things. First of all, we to continue to grow our primary clients and the level of interaction with them. That's point one. Point two is that in many of the markets, we are competing with, let's say, local champions or local banks who are increasingly feel pressure to increase fees on the back of of difficult market circumstances.
We have seen that, by the way, lately in the Netherlands, where ABN AMRO increased their payment package fees with 50%, and we see that in other markets as well. Three, in a number of markets, we're still actually relatively low in terms of our fee potential, also in terms of the interaction we have with our clients. Even though, and I proudly always say every quarter, okay, and now we have 2 million brokerage accounts in Germany, and this quarter we have 2.1 million brokerage accounts in Germany, and that's all fantastic. If I look, and that goes for all the markets, compared to the total number of clients we have, let's take Germany. We have 9 million customers in Germany. With only 2 million who have brokerage accounts, and that ratio for some markets is even worse.
It also means that we have still some, quite some way to go to deal with this, leaving alone, what we do charge for payments, what we do with insurance. We come from an environment or ING as a business model whereby fees, as the old ING Direct model, was relatively benign compared to activities that we did, and we're gradually catching up, but we're not there yet at all of where we are supposed to be to, let's say, grab quote-unquote, our fair market share, if you will, compared to the size that we have as an organization.
On the RWA, yes, you're correct. In total, we do see increase in inflation of RWA based primarily, as we say, on the credit risk side due to introduction of the risk weights for the Dutch residential mortgages. On the other side, EUR 9 billion, as Steven mentioned, for the increased density for the Russian portfolio. If we would actually neglect these two points, we would see on the rest of portfolio, and specifically on the Wholesale Banking side, a decrease. This comes from two sources. One is definitely on the volume side. We have seen in certain industries, for example, REF, some small increases in the portfolio, which absolutely contribute to the decrease of RWA.
As well, in the other parts of the Wholesale Banking portfolio, we do see reduced RWA based on improved structure, both in terms of the rating of clients, but as well in terms of the products and maturities. In total, on Wholesale Banking side, when isolating Russia, the improvements are positive.
Great. Thanks. Thank you.
Kiri.
Following question is from Mr. Benoît Pétrarque of Kepler Cheuvreux. Go ahead, your line is open.
Yes, good morning. Here are my questions. First one is on the special distribution. I was trying to understand how you came with this EUR 1.25 billion. I mean, it's roughly 30, 35, 40 basis points impact. You know, is such a level the kind of natural level for you given the macro uncertainties? And is that the level we can or you can repeat in the current macro, also in the coming years? Just wanted to ask about kind of how you know how you determine this the appropriate size of the special. Second one is actually on cost. Very strong, you know, down 2% clean.
You know, all we have to think about cost going forward and the cost trajectory for the remaining of the year.
Also given the current inflationary pressure, how do you or will you be able to kind of maintain cost flat? Can we expect a bit more re-structuring going forward? Anything special there, please? Then just a final one will be on the front book margins in the Netherlands on the mortgages, which seems to go the right direction. I think you mentioned some pressure in first quarter , but that was probably a timing issue. We see very strong repricing on mortgages as we speak. It seems that the funding cost is going to the client clearly there. Could you update us on front book versus back book currently? Thank you.
Thank you very much. I will do the question on front book and costs, and Tanate will talk about the distribution. First of all, on the front book. Yeah, I mean, typically you see that in the quarter where you produce, and so you go to the markets to offer that, then is delayed with a quarter before you can typically price in the full funding costs. That you will expect as funding costs continue, then also margins will be impacted. Of course, it's a comparative dynamic, but that's what we typically have seen in the past.
With one thing to note is that if that happens, also when you then look at prepayments, we're also benefiting always from prepayment income, where-by people pay a penalty for prepaying part of their mortgage. But when the interest rate goes up, that part of your income will decrease. Yes, the margin will restore itself, but that is excluding the prepayment income, which will likely decrease when margins go up, which is logical. When we talk about costs, I mean, yes, we now see. Well, first of all, we are strict in costs, very focused on making sure that we can deliver what we need to deliver with the applicable FTE amount number. Secondly, we've also taken a number of decisions in the past year- or- year and a half, and those decisions are now gradually filtering through. We're gradually benefiting from that.
Not all the benefit is in. For example, we are transferring our clients, our ING in France to Société Générale. Still we have a retail operation, and only gradually during the year that operation will be wound down. Those benefits are still for a part to come in. That's why I said even with all the inflation going on, all the markets, we cannot ignore that. We are confident that we can keep our costs at least flat, compared to 2021 operating costs in 2022 as well. Going forward, we then need to look at what additional measures do we need to take. Obviously, we also need to invest.
If inflation stays the way it is currently, yeah, that is a challenge for all of us. We're also in the meantime digitalizing our processes, which both have a benefit for our customers, but also for our cost to serve. We keep on focusing on that trajectory as well to keep our costs under control as I've done over the past almost two years now.
Benoît, on capital, clearly we go through the normal capital management analysis to come up with the 1.25. We look at the outlook on earnings and how we can generate capital, and clearly the tailwind on NII helps support that. We look, of course, at the Russian exposure, what the worst case could be, a stress test scenario, and based on combination of that, as well as any potential regulatory capital coming our way, and that's how we derive the 1.25, which is right size from where our thinking was at the end of February prior to the war. That's how we have done that. We have been having constructive discussions with the ECB to arrive at this number, which they approved for us.
Roger.
Thanks, Benoît.
Our next question is from Mr. Raul Sinha of JPMorgan. Go ahead, your line is open.
Hi. Good morning. A couple of follow-ups from my side. I guess the first one is just your thinking around the mix of distributions between dividends and share buybacks going forward. You know, just given what you flagged to us on the Dutch withholding tax, and how that has led to obviously the mix of dividend and share buybacks, how should we think about the mix maybe for outer years when we think about how you would, you know, look to approach further capital distributions? That's the first question. The second one, I guess a little bit more broad-based. I'm wondering what you think the impact of stagflation would be on the bank? I'm sure you're running internal scenarios, particularly from stress testing perspective.
How do you think ING will behave in a sort of stagflationary environment in your core economies? Thank you.
Thank you, Raul. First, Tanate, I think on share buyback and then, Ljiljana on stagflation.
Raul, on the share buyback, I think it's a uniqueness of Dutch tax requirement that we need a certain minimum cash payments for share buyback to be exempted from withholding tax. That's why we have that particular split that we talked about in this quarter, EUR 870 against the EUR 380 payment. We have also said in our policy that the majority of our
Cash or capital distribution will be in cash, so we stick with that guidance that the majority will be in cash. Having said that, of course, looking at the share price, if it's discounted from book value substantially, then we will be focusing more on share buyback. This is the guidance we can give for the time being.
On the stagflation, yes, I would say the threat, if not already reality of stagflation, is present in our economies. This means the lower growth than expected is definitely being built in our base case, and clearly higher inflation for longer. In that respect, we have already on the assumptions for the loan growth, I would say, downsized it to the lower range of the 3%-4% loan growth yearly. We do, however, benefit, I would say, from the strong risk management framework that we have in place, which means as well a strict origination criteria and significant buffers when assessing the credit repayment capability specifically on the retail side.
of our book currently, which is a very low percentage of the unsecured consumer lending and as well, not significant part of the small businesses in the economy, would help us on top of a very good starting point and low risk on our books and low NPL ratio, and coverage to manage this going forward. Clearly, it remains, the challenge for all of us, and we are following the situation and assessing the scenarios and making sure that we are adequately provisioned.
Thank you. If I could just follow up on that. What do you think of the impact on the cost of risk, relative to the through-the-cycle guidance that you've given, if it were to get into this sort of economic scenario?
Well, it's difficult to say. We definitely keep our, I would say, through the cycle, look for the years to come. It might be different from year to year, but through the cycle, I believe we're going to be there. We have significantly, as I say, already provisions part of the portfolio through stage two provisions and also through still some existing overlays, from COVID time and also from the mortgage book you will remember from the last quarter. We do believe there is a plenty of opportunities in our book to manage this, with no significant volatility in cost of risk other than 25 basis points.
Thank you very much.
Next question is for Mr. Karl Peace of Crédit Suisse. Go ahead, your line is open.
Yeah, thank you. If I could just follow on from Raul's question. Some of your peers have said that a low stage three losses means that 2022 can still be below the through the cycle rate. I just wondered if ex-Russia, you would share that view as you see things today. Then a question on capital return. If Russia visibility improves, would you contemplate any additional returns later this year, or are we done now until next year's results? Also, you said that the EUR 1.25 billion figure was right-sized from your expectations at the end of February. I guess since then you've booked EUR 2.5 billion in capital for Russia. Did that mean that at a normal level of capital return would have exceeded EUR 3 billion?
Is that where we should have our expectations for next year? Thank you.
Okay. Thank you very much, Karl Peace. Regarding the first question, excluding Russia, would it be below 25 basis points. Like we said, we don't give guidance for a year, we give guidance through the cycle. What Ljiljana Čortan also said and what we typically do is that what you have seen through the cycle is that our cost of risk of all European banks in the Eurozone have been the lowest throughout the last 12 years on average. What we have done also the last quarter, in the wake of higher inflation on the back of disrupted supply chains, is already take overlays for mortgages and part of the Wholesale Banking book in risk costs. Now, that of course is helping us now that inflation is really coming or persisting.
That also means that, yeah, we still have a buffer based on Corona. We build up buffers based on inflation. That's helping the rest of the book. Looking at the first quarter, if you look at the remaining risk cost outside of Russia, the total risk costs were EUR 987 million. Russia was about 85% of that. It basically shows that for this quarter, we do not see current big problems looming, otherwise we would have taken the cost. On capital, it is not a simple mathematics that because Russia cost us EUR 2.5 billion, we would have paid more from that perspective in capital returns. I think we just take a comprehensive view. What is our earning ability going forward?
We look at stress testing, we look at issues like stagflation and what the economies will bring, and then we'll form our view at any given point in time about that convergence to the 12.5%. As for are we gonna announce any future plans on capital return this year, well, the future is the future. We don't comment on any actions we may take in the coming period.
Thank you.
Our next question is from Mr. Johan Ekblom of UBS. Go ahead, your line is open.
Thank you. Just one question on my side, please. Back to net interest income. When we think about the ECB hiking from -50 to zero.
How much would you expect to lose on the negative deposit charging going back to zero? What's the total benefit that you've had across?
Okay. Thank you. Currently, the total amount of negative interest rate charging that we do is on an annual basis EUR 300 million. Yeah, I mean, typically the banks follow market rates. At some point, that's then the amount that we will lose as well.
Perfect. Thank you.
Following question is from Miss Giulia Miotto of Morgan Stanley. Go ahead, your line is open.
Yes. Hi, good morning. I have a question on the rundown of the Russian book. It decreased basically EUR 1 billion in two months. Is that a normal rundown, or can you shed some light on the maturities of this book? Because it seems, you know, was there any other proactive action or is this just the normal run rate of decline? That's my first question. Then secondly, on just to follow up on the question that was just asked around the negative rate charging. Is EUR 300 million only for the retail bank or is EUR 300 million the group level NII that you are making on charging negative rates? Basically, is there something more in the wholesale bank? Thank you.
Okay. On NII, I give the floor to Tanate Phutrakul. On Russia, I give the floor to Ljiljana Čortan.
Maybe starting with Russia and the rundown question. Yes, this is the normal, I would say, rundown of our portfolio based on the maturities. As you might know, our exposure is partially short-term, partially long-term. On the long-term side, we are involved in several project and asset-based financing where we are as well credit insured for the good part of the portfolio. What we are currently running down is the short part of the book, and we will continue to do that. Clearly, the good relationship with the clients and long-standing relationship with the clients helps out in that respect, which was obvious in the last 60 days when we were able to, in regular way, manage down the portfolio by almost EUR 1 billion.
Giulia, the question on negative rates charging. The EUR 300 million that Steven referred to is mostly retail-related benefits. From the Wholesale Banking, we are neutrally geared towards negative rates. As negative rates disappear, we don't expect to lose revenue. In fact, we should benefit from that actually in terms of PCM business.
Okay, thanks. Sorry, going back to the run rate of decline. Any comment on by when basically you should be done with, I don't know, half of the book or, you know, any more granularity? Because it seems like you have a large shorter part, but you also have a long one. That makes you can give, let's say, by year-end, you're gonna be done with the half of the book or something like that. Is there any comment you can make?
Yeah. Thank you, Giulia. Look, this is an emerging market. What do you do with the emerging market? Either if it's unsecured, it's short. When it's secured, also supported by ECA and CPRI by projects, it's longer. We don't give those figures, as you can imagine. But the short part is short, and it basically means that of that part, which is significant, the lion's share would run off this year.
Okay.
Next quarter, Giulia.
Our next question is from Mr. Omar Fall of Barclays. Go ahead, your line is open.
Hi, good morning. Could you just discuss loan growth specifically in wholesale, please? Even outside of FM, there wasn't any, and presumably that's not just Russia related. What's the outlook here, especially, you know, previously you'd said a resumption of corporate lending was a key driver for you over the next couple of years. Then second, thanks for the helpful guidance for this year on NII. You know, the only place there's been actual meaningful sequential increase in NII is basically Poland, given you know, the policy rate rises there. What would be most helpful is to finally get some actual sensitivities like your peers are giving, you know, over a longer timeframe, because these effects of higher rates are exponential in future years.
Would it be possible to get this at some point, you know, even if it's at your investing? Finally, sorry, a cheeky third, but could you give us a sense of the value or scope of the impact of lower prepayment fees in the Netherlands, given the drop there is quite large in NII? Thanks.
Thank you very much. Omar, on the loan growth, if you look at the loan growth for Wholesale Banking. Well, first of all, let me give you a few pointers. If you look at the fees in Wholesale Banking, the growth there comes from syndicated markets. That is because the syndicated markets have returned after Corona. What we do see is positive is larger underwriting, syndicated deals which come with fees, which are in general more attractive for banks as well. That's a positive. We do see pipelines that are good, and they continue to be good. I think this quarter, that will continue a little bit. That's one.
Two, on real estate finance, that came down a little bit, huh? Also on the back of due to Corona, less need for certain uses of buildings, and we're actually focused on that. Where do we have multi-use of buildings and where not? We stay focused on that end as well. Those are two effects that came in in the first quarter. Corona repayments. Sorry, Corona repayments. The repayments of TLTRO related facilities will continue in 2022 at a lower rate. It means that for Wholesale Banking we do expect loan growth, but at a lower pace than the 3%-4% than we initially indicated. With regards to NII on the sensitivity, I mean, clearly you mentioned Poland, but I can also mention Romania, I can mention Australia.
There are many non-Eurozone markets where the rates already moved and where the central banks already moved rates. That is for us a positive. We are looking forward to the announcements that the ECB is going to make, but there's every day so much news about it that we will just wait and see what it will be. Already now, even with that rate not being there and short-term rates being positive is also positive for us. With the current rate curve, the EUR 600 million negative drag last year has evaporated. That means that we are already now, even before the ECB has done anything, are positive on the NII turning positive this year. We will give you more NII sensitivity information during Investor Day. As a matter of fact, tonight we'll do that, which is good.
On the number of lower prepayment penalties, yeah, we don't give that. What we would say that to guide you with is that we would expect the margins excluding prepayment penalties to move to a normalized level, once the funding rates get fully filtered through in the market rates. That's what we have seen in the past, and we have no reason to believe why it would be different this time around. Yeah, that depends. We don't give particular input on the prepayment penalties, but that gives a slight pressure on the total NII in the Netherlands because that was, of course, a significant part over the past number of quarters.
That's very helpful, especially that we'll hear more on the sensitivities at the Investor Day. Thank you.
That was the most important part. I should have said it in the first place. Move on.
Next question is from Benjamin Goy of Deutsche Bank. Go ahead, your line is open. Mr. Goy, are you there?
Thank you for taking my question. Just one major one left. I mean, you gave guidance on your Wholesale Banking loan growth, but just wondering about the mortgage book from here with higher mortgage rates. I mean, in some markets they moved up a lot year to date, Germany two and a half times. How do you expect this impact your origination and ultimately loan growth in mortgages? Thank you.
Yeah. I think that for now, the only thing we see is less prepayments. In that sense, less movements of people prepaying and then they move to another bank or the same bank. The loan growth in the first quarter was good. We still see that, of course. It depends on the number of elements. On the one hand, we have, of course, the impact on the ability of people to pay in terms of the increased energy price and inflation, the likes. On the other hand, we see that in the Netherlands there is, but in other markets as well, there is still a shortage of houses.
That goes for the Netherlands, but it also goes for our second biggest market being Germany. There is still quite a lot of supply missing. What we've seen over the past couple of quarters is that we booked record mortgage growth in Germany as well, and we don't see that demand decreasing in the short term. We're positive about continued loan growth in retail.
Understood. Thank you.
Our next question is from Mr. Farquhar Murray, Autonomous Research. Go ahead, please. Your line is open.
Morning, all. Just two questions, if I may. Firstly, just coming back to the capital update, and specifically the kind of question around how the EUR 1.25 billion was arrived at. Should we think of the pro forma 14.5% CET1 level as a kinda near-term threshold, perhaps to year-end? Secondly, just coming back to Russia, in answer to Giulia's question, you gave a bit of a sense of how the exposure will develop. Can I ask if the RWA would develop in a similar manner? On a subsidiary point, the EUR 4.5 billion of market RWA we saw in the quarter, how would that have developed given the markets we've had since, and could we expect some of that to reverse? Thanks.
Good questions and that's not my forte with short answers. On capital, should we look at the pro forma 14.5% as our target level for the end of the year? No. We have guided that we want to move gradually towards 12.5% in the next couple of years. On Russia, on the market risk RWA, was that because of high volatility? Yes. Will that, if the volatility drops away, will that reverse? Also, yes. Sorry, did I miss a question?
The credit component as well in Russia, will it develop in line with the exposure?
Yes. I mean, look, we have seen a current decrease of our exposure with approximately EUR 1 billion. I've just said to Julie, I believe that we have a sort of a barbell in our exposure. Half short-term unsecured, long-term secured. The short-term exposure, if that exposure gets re-paid back, we also see some write-backs for our term loans in our RWA, because that happens when we reduce the exposure.
All right. Perfect. Thanks very much.
Our next question is from Mr. Tarik El Mejjad of Bank of America. Go ahead, your line is open.
Hi, good morning. Just a quick question again on dividend. So just to clarify the 50% payouts for the ordinary dividend. So definition is on resilient earnings. Should we assume that the Russian stage two provisions, expected stage provisions should be included or adjusted for? And then on the capital return, I mean, you just said again, like in fourth quarter, that you would like to converge towards 12.5% within the next two years. We understand it's important for your ROE. I mean, that makes it really very big catch up to do in the next two years. I mean, now if you believe the 14.5 already captures the, maybe not the, should we in the next few quarters?
I think someone asked the question, but really you want to understand already what's the discussion. Are you just being restrained by the ECB or is it your own cautiousness? Thank you.
On the dividends, does the risk cost on Russia is that excluded or not from resilient profit? No. It's part of our normal procedure. Yeah, if we have higher risk costs, then also the resilient profit goes down. That's the way it works. Regarding capital distribution, yeah, you mentioned the words two years twice. I didn't say two years, I said a couple of years. I give the floor on the further answer to Net.
Yes. A couple of years means a range of periods, so we will converge over time. I think in the capital return, our conversations with the ECB has been very constructive, and it's really very much based on our own capital management, looking at the geopolitical situation, looking at capital generation, that will determine ultimately the pace at which we get to 12.5. You can imagine that, given where we are today, the clarity of the future, it's a little bit more foggy than it was in February. That's why we right-sized the capital returns based on what we see now. Certainly not being constrained by the ECB. It's more how we see the geopolitical and credit risk, as we stand today.
Sorry, I didn't understand the comment about two years. Two years is next two years. I didn't understand what because you have EUR 6.5 billion excess now.
We are saying we will converge. We will converge to 12.5 over the coming years. Maybe a couple of year means it's over that number of years. It doesn't mean two years precisely.
Okay. Thank you.
Our next question is from Anke Reingen of RBC. Go ahead, your line is open.
Yeah, thank you for taking my question. The first is just coming back to Russia. The EUR 800 million of provisions, can they sort of like be used against onshore as well as off-shore, or is there some accounting, so it's partly just on-shore? Just on the sanctions exposure, the EUR 3.3 billion and your comments implying no additional exposures, I guess would suggest that the EUR 2.5 billion capital is largely against that exposure. I mean, how confident are you that, I mean, firstly, probably the amount could go up with more sanctions and the repayments are received. Is that short-term as well, or is it more long-term? Yeah, just in terms of how fast this number can be coming down. And then sorry, one last question.
You briefly mentioned potential regulatory headwinds in your capital path consideration. Is there something on the horizon other than Basel IV in the rest of the year we should be aware of? Thank you.
Okay. I'll take the question on the regulatory headwinds and the repayments, and then Ljiljana will take the question on provisions, onshore, offshore. On the regulatory headwinds, no, we don't see that. We have had. I've said before. Basel IV includes all the TRIM missions and Basel IV and the output and the input, and so there are different moves, but in the end it all comes down to the same Basel IV direction of the ECB. There is no further programs in that regard. We do see now and again, based either on volatility or based on model updates, you see spikes up to or you see spikes down, but that is usual, so we don't have anything else currently to report on that. Then about repayments, I mean, are we confident?
I mean, you mentioned there are also sanctions, and sanctions could increase. That's true. It does not mean that people who are sanctioned cannot repay. It means we cannot do further business, which we are not intending to do in any case with Russian companies. We do get repayments, and we are allowed to receive repayments also from sanctioned entities. As long as companies are performing, we get repaid. Again, I point to the EUR 834 million risk cost. The lion's share, except for about EUR 70 million, is with companies who are still performing, but with whom we see an increased risk because of a rating decrease of Russia overall. Then our models and policies prescribe that we then also decrease the ratings of those companies and therefore move them to stage two. They're still performing.
It also is the case with, let's say, our short-term exposure that we see over the next couple of quarters. Yeah, by and large, except for the EUR 71 million we have seen, our Russian clients are performing and means that we also expect them to repay also in the next quarters. Ljiljana Čortan.
Yes, on the total risk cost for Russia, EUR 834 million, approximately a bit less, around EUR 200 million, refers to the on-shore exposure. The rest refers to the off-shore exposure.
Thank you very much. Our next question comes from Guillaume Tiberghien of BNP Paribas Exane. Go ahead, your line is open.
Thank you and good morning. My question relates to the subsidiary in Russia. It has EUR 1.3 billion of exposure and EUR 100 million of equity. If you start incurring losses in that subsidiary, would you consider recapitalizing it, in which case we would worry to lose up to EUR 1.3 billion? Or when the capital is gone, it's gone and the subsidiary goes away, including the RWA? And what are the RWA in that subsidiary, please?
Look, I mean, we're currently talking about going concern, huh? We're currently looking to get repaid both onshore and offshore. If you look at our capitalization of our bank in Russia, that's currently EUR 100 million. We don't give you comments on whether we will capitalize in the future. If worse comes to worst, if that's going concern, which basically means you would lose your sub in Russia, that means that we would lose the equity in Russia, which would, in this case, be EUR 100 million.
You would not recapitalize it?
I said that I'm not going to make comments on the future. If you say, If you would lose your sub at this point in time, what would that mean? It would mean we'd lose our equity. That would be EUR 100 million.
Okay. What are the RWA in the subsidiary?
Excuse me?
What are the RWA in the subsidiary?
We don't disclose that. It would be a release.
We have a follow-up question from Mr. Stefan Nedialkov of Citi. Go ahead, your line is open.
Hi, guys. A quick follow-up from me. A lot of numbers on NII were flying around, and you did mention you will provide some more details with the Investor Day. Obviously that's more than a month away, and people need to think about their NII numbers in the meantime. I would really appreciate it if you can give us some sensitivity to the two potential ECB rate rises. Assuming one happens in the summer and one towards the end of the year, what would that mean for your NII? You obviously mentioned the EUR 600 million headwind from the liability margins is going away this year. There is a EUR 300 million benefit from negative charging, which is partly offsetting that.
When you put all that together with two ECB rate rises, what does that mean in terms of extra NII over and above your guidance for 2022?
Yeah. I mean, by the way, I think the assumed rate rises, Stefan, are after the Investor Day, but I grant you that. We stick to what we have said, and I see that you need, and I understand that you want to have more guidance on NII and what it does. We have said quite a number of things. First of all, although the market has said in the past that they said there was no benefit of rate rises. We thought that RBC said there was no benefit of rate rises. We have said there is a benefit of rate rises. We have said the EUR 600 million drag is already out. We have said this year that will have a positive impact on NII.
This year will be higher. We said we see benefits in many markets, and we will give you more guidance on NII and sensitivity on the thirteenth of June. It's five and a half weeks, and then we can talk about it.
Okay. Got it. Thank you.
We have a follow-up question from Benoît Pétrarque of Kepler. Go ahead, your line is open.
Yes, thank you. Just a short one on Basel IV. Given the risk for assets moving quite substantially this quarter, what is your pro forma Basel IV CET1 please at the end of first quarter? Thank you.
We did not have any further impact on Basel IV in the first quarter.
Okay. I think the difference was less than 30 basis points, right?
I will give this to Ljiljana, but I guess that you mean the remaining impact to come from Basel IV was 30 basis points. Is that what you imply?
Yes. Yes.
It's less. It's almost zero.
Okay. Still zero then. Okay. Thank you.
We have a question from Esther Castro of Banco Sabadell. Go ahead, your line is open.
Oh, hi. Can you hear me?
Can.
Yeah. Can you hear me?
Yes, Esther, we can hear you very well. Thank you.
Oh, sorry. Hi. Good morning. Thank you for taking my question. Just only a follow-up concerning the GDP growth. I mean, the sensitivity. If you could share with us, gentlemen, please, any kind of sensitivity or scenario concerning the new macro, like for example, for every 1% drop on GDP, what will be the implication on the cost of risk if, of course, you can share it with us. Which are the moving parts in this GDP factor to provision. Thank you so much, and have a great weekend ahead.
Thank you very much, Esther. Look, I mean, GDP is only one of the elements that doesn't impact. There's GDP, but then the question is what does it do to inflation? What does it do to unemployment? What does it do to energy prices? There are heaps of elements that link that are not necessarily that you then also would need to know. Because GDP standalone is a much too simple metric to base the cost of risk on, otherwise we wouldn't have needed Ljiljana for this because it's actually quite complicated. There's more layers behind this and that we do not disclose.
Okay. Thank you. Have a great weekend.
We have a follow-up question from Robin van den Broek of Mediobanca. Go ahead, your line is open.
Yes, sorry to come back into the queue. Could you maybe give a little bit more explanation about the tax implications to the buy-backs in the Netherlands? I guess it has to do with how much cash dividends you've paid, but I'm just trying to understand how this will affect your future decisions on capital return, cash versus buybacks. Secondly, I was wondering if you could give any disclosure about how much revenue/P&L would be lost on the back of your unwind of the Russian activities. Thank you.
Okay. I mean, thank you, Robin. On, we don't disclose the demand on Russia, but what you do see is, well, you know how big the book is. You typically know what the name is. Then you can make sort of an extrapolation at certain levels, what the revenue on an annual basis, what with Russian clients. By the way, it's gradually winding down, huh? Part short term, part longer term. In the meantime, of course, and that's what I've said also in the past, if you look at the total exposure, we have a total exposure to clients of around EUR 630 billion. That's customer exposure of around, which EUR 5.8 billion is Russia exposure, which is less than 1%.
From an exposure point of view, and therefore the growth point of view, we grow much quicker in mortgages in the remaining of the book than that. Actually, the book in Russia is coming down. The impact of that is limited. Yeah? If we can't grow there, we have enough opportunity to grow elsewhere. Regarding tax, I'll leave that to Nate.
I think, Robin, maybe the best thing to do is probably if you can contact our investor relations, we can talk you through it. It's a complex rule involving looking at historical cash payment over seven years. I think it's better that if we reach out to you after this call.
That's fine. Perfect. Have a good day.
Same to you.
We have no further questions. Mr. van Rijswijk, back over to you.
Much. I wish you a great Friday and a great weekend. Thank you again, and I'll speak soon.
For 2022 ING analyst call. Thank you for your attention. You may now disconnect your line.