Good morning. This is Patricia Krooshof-Naughten welcoming you to ING's second quarter 2021 conference call. Before handing this conference call over to Steven van Rijswijk, Chief Executive Officer of ING Groep, 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 an historical fact. Actual results may differ materially from those projected in any forward-looking statement. 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 under any press release as posted on our website today. 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. Good morning, and welcome to the second quarter of 2021 results call. I hope you're all in good health. I'm happy to take you through today's presentation, joined by our CFO, Tanate Phutrakul, and CRO, Ljiljana Čortan. Thereafter, we will take your questions. The key message is another quarter of COVID-19 has passed, and we see positive signs of vaccinations and economies reopening, however, also the effects of the Delta variant, with infections spiking again. Overall, we are moving back to normality, but we're not there yet. We have taken steps on climate change. The situation is not where the world needs it to be, and the pressure to transition to a low-carbon economy continues to grow. We continue by financing the transition. We have been doing that by our Terra approach and have upped our ambitions by joining the Net-Zero Banking Alliance. If you look at the results under the current circumstances, I am pleased that we show such a stable financial performance. As I said last quarter, looking at the results, you wouldn't think we are in a crisis, and I'm proud of all the hard work by the colleagues realizing another record quarter in fees, growing our mortgage book, managing the pressure on NII while keeping expenses under control. Risk costs were a EUR -91 million. We have released part of the buffer built up in 2020, reflecting an improvement of macroeconomic indicators. The quality of the loan book remains strong, with very limited risk costs on individual files and a lower Stage 3 ratio of 1.5%. Overall, for 2021, we expect risk costs to be below our through-the-cycle average of around 25 basis points. CET1 was higher at 15.7, with 50% of the second quarter resilient net profit reserved for future distribution. This brings the total amount reserved for this outside of capital to just over EUR 4 billion, of which we distribute EUR 3.6 billion after September. Before we go into this quarter's figures, let me spend some time on a few topics I want to highlight, being a contribution on green transition, our strong performance on fee income, and our distribution plan. The first topic is the transition to a low-carbon economy on slide three. As I mentioned, when it comes to fighting climate change, the sense of urgency and the need to accelerate is clear. Extreme weather is becoming more and more frequent. Stakeholders see the need for more action and speed, and the urgency is also clear with policymakers. We fully subscribe to the sense of urgency and have been supporting our client's transitional efforts for several years by being a pioneer with steering our Terra book or Terra approach and offering innovative, sustainable products to our clients. This support has translated into a growing number of sustainability deals with an acceleration visible over the first six months, as we're now already close to full year 2020. This includes a growing number of green bond underwritings, for which we have received recognition as ING was named Most Impressive Investment Bank for Financial Institutions on Socially Responsible Investments by GlobalCapital Magazine. I'm happy to say that we are accelerating our efforts and have joined the Net-Zero Banking Alliance. For two of our Terra sectors, we are already on the right pathway. For the other seven sectors, some gaps exist, and we will determine which actions are needed to align the pathway for each sector with a net-zero ambition. I believe banks play a pivotal role by financing the transition. However, I also call upon businesses to take actions and upon policymakers to set regulations that are clear on what is green and not. These regulations need to reflect that the transition takes time, and I find it key that also transitional efforts get recognized, that credit is also given to what is not yet green but is moving in the right direction. I see this as a potential weakness in how the Green Asset Ratio is currently proposed. On the other hand, the intentions of the European Commission's revised sustainable finance strategy to incorporate certain transitional activities in a taxonomy are encouraging. Slide four shows the development of our fee income with an 11% CAGR over the past two years, even with the effects of a lockdown. Investment product fees stand out with a CAGR of 27%, reflecting growth of accounts, assets under management, and trades. This was driven by a growing appetite to invest, an appealing investment proposition, and an elevated number of trades, partly due to the market volatility under COVID-19. Especially in Germany, we benefited from our digital proposition and growth in the number of accounts. In the second quarter, the number of trades was less elevated, resulting in lower related fees. However, with a rising number of accounts and assets under management, we have a strong foundation for a structurally higher level of investment fees. Another important contributor were daily banking fees with a CAGR of 10%. Main drivers were the introduction of new fees in Challengers & Growth Markets and the annual increase of package fees in the Benelux. Overall, I'm pleased with the strong performance of our fee business, keeping in mind that this reflects that especially international payments are still at lower levels with upside potential as we return to more normal circumstances. The same applies to lending fees, which reflects still subdued demand from business clients. We see further progress for fee income on new product propositions, for increased charging of the cost of operating accounts, and for fees on daily banking packages. Overall, our track record shows we are able to deliver on our 5%-10% growth ambition, and that ambition stays in place. Let me now move to slide five. I trust I have your full attention for this and you're familiar with our distribution policy. As the ECB has announced that they will lift the ban on distribution after September, I am pleased that we can now execute on the policy. Starting with a payout of EUR 0.48 on October 12th, or EUR 1.87 billion, reflecting the EUR 0.21 interim over 2021, and EUR 0.27 for the remaining amount originally reserved for 2020. After September 30th, we will make an additional distribution of EUR 1.74 billion. The exact form is to be decided. This will be in the form of cash and/or share buyback. In the latter case, it will be subject to relevant approvals. Going forward, we will over time convert to our CET1 ambition. As long as the exit from the pandemic and government support is unclear, we will remain a prudent buffer. Now, let me take you through the second quarter results as of slide seven. In the second quarter, total income year-over-year was supported by strong fee growth. NII included EUR 83 million TLTRO. Pressure was visible, mainly reflecting lower liability margins. Other income was lower, as a year-ago quarter included several positive valuation adjustments as markets rebounded from the negative impact of market volatility that we saw last year in March. This was partly offset by the EUR 72 million receivable related to the insolvency of a financial institution in the Netherlands a number of years ago. Sequentially, fee income remained at the same high level, while lower NII was primarily driven by lower TLTRO. On to NII on slide 8. In previous quarters, we addressed that we see continued pressure on NII from low interest rates, which as well as the pandemic, which affect the levers that we generally use to counter it. We want to reiterate that swap rates have improved. They remain below the five-year rolling average, we invest in maturities which can range from overnight to over 10 years. As an example, we could say we invest 20% of our replicating portfolio every year, improvement will only come in over time. We, of course, will benefit from a more steepening yield curve. NII, excluding the TLTRO benefit, was lower year-on-year, primarily due to this continued negative interest rate environment while deposits inflows have been substantial. Lending margins were slightly higher. At lower average lending volumes year-on-year, we also saw negative impact from FX currency translation. Compared to the previous quarter, NII, excluding TLTRO, was slightly lower, impacted by the aforementioned pressure on the liability margins, which was partially offset by higher average lending volumes at higher margins. This higher volume might sound counterintuitive as net core lending decreased this quarter. This reflects that the majority of the loan growth in the first quarter came in in March and was therefore not fully reflected of average customer lending for that quarter. Our net interest margin ultimately decreased by 10 basis points to 136. This was mainly driven by lower TLTRO benefits, representing 6 basis points, and the remaining 4 basis points were due to an increase in the average balance sheet and the liability margin pressure I mentioned earlier. Slide nine shows net core lending. Strong growth in mortgages. Demand for mortgages continued to be strong, especially in Germany, Poland, and Spain. This was the primary driver of net core lending growth in retail, with some growth also visible in consumer and business lending. In Wholesale Banking, we saw a high level of repayments on term loans and short-term lending in financial markets, resulting in an overall decrease. Net customer deposits was EUR 4.9 billion growth, driven by EUR 7.3 billion of higher savings in our Retail and a EUR 2.5 billion decrease in Wholesale Banking. I've repeatedly said that negative loan growth is not structural and that we expect loan growth to return when uncertainty subsides. There is still, of course, a Delta variant, and uncertainty is still there, which means that there might be a delay of return to loan demand. When the demand returns, with a geographical and product diversification, we are well-positioned to support our customers and capture growth. Back to fees on page 10. Year-over-year income grew by 18%, with growth both in Retail and Wholesale. Retail fees were up 20%, with an impressive 46% growth in daily banking. This reflects the increase in payment package fees and the recovery of domestic payment transactions, while international payment transactions remained subdued. In Wholesale Banking, fees were 14% higher year-on-year as we saw some growth in lending-related fees, including in trade and commodity finance, while also payment fees increased. Sequentially, retail fees were slightly lower, mainly reflecting a lower number of trades in investment products after a record high in the first quarter. Higher fees in Wholesale Banking primarily reflected daily banking and corporate finance activity. On slide 11, it shows the expenses which this quarter included EUR 39 million of incidental items, reflecting an IT impairment and some provisions related to measures we announced for retail in the Netherlands. Excluding these regulatory costs and incidentals, operating expenses were under control. Despite the effect from CLA increases, both year-on-year and quarter-on-quarter, expenses were lower. Year-on-year, we further absorbed higher IT expenses and some litigation provisions, while quarter-on-quarter, we had a slightly higher VAT refund. Regulatory costs were lower quarter-on-quarter, reflecting a seasonally high first quarter. Year-on-year, the increase mainly reflected additional DGS contributions in Germany following the Greensill insolvency and this included a EUR 30 million catch-up. Going forward, we expect a quarterly impact of around EUR 10 million until the end of 2024, which could be adjusted depending on the conclusion of this insolvency. Unfortunately, we also see some unexpected costs coming in, such as VAT charges on intercompany services following a recent court ruling for one of our peers. We expect to see the impact from this building up over the coming quarters to around EUR 125 million annually, which we will have to absorb over time. Going forward, we will continue to steer for operating expenses to go down. On the measures announced over the past quarters, it takes time to execute, but I'm, however, very positive on the execution and pleased we found new homes for our retail customers in Austria and the Czech Republic in mutually beneficial transactions. To asset quality on slide 12. The risk costs were EUR -91 million, or - 6 basis points of average customer lending. This includes a EUR 230 million management overlay, primarily in Stages 1 and 2, which partly offsets a EUR 492 million release driven by updated macroeconomic indicators. This result in a net impact of EUR -262 million with releases in all business lines. Aside from these releases, in Retail Benelux, risk costs mainly came from EUR 109 million collective provision in Belgium, reflecting model updates, of which EUR 79 million was in Stage 3. We further saw some collective provisioning for consumer lending in the Netherlands. In Retail Challengers & Growth Markets, risk costs further reflected collective provisioning for consumer and business lending, mainly in Poland, Germany and Spain, and Wholesale Banking. Stage 3 risk costs were low, reflecting very limited additions. Both Stage 2 and Stage 3 ratio were lower, reflecting lower outstandings in both stages. As I said at the start, looking at the numbers, you wouldn't think that we are in a crisis, and that certainly applies to risk costs. This is not ING-specific, and I believe it reflects the support provided by governments, combined with a positive macroeconomic outlook, which could allow businesses to make a quick rebound. However, uncertainty remains, and for that, we still keep in place part of the buffer built up over the past quarters, amounting to around EUR 425 [million] at the end of the second quarter. We do believe things are moving in the right direction, and that for 2021, our risk costs will end up below our through-the-cycle average, and that is a change in guidance. The next slide shows that our CET1 ratio increased to 15.7%, and on slide 13, the capital was higher with EUR 400 million, which included EUR 700 million, or 50% of net profit for this quarter, and the other 50% was reserved for future distribution in line with our policy. This was partly offset by foreign exchange impacts and increased NPE backstop, but also lower benefits from the IFRS 9 transitional arrangements. Our RWAs decreased, mainly driven by market and operational risk-weighted assets. The market risk-weighted assets reflected a lower historical VaR, as a volatile quarter was no longer included in the calculations, and lower operational risk-weighted assets was due to technical model updates. The credit risk-weighted assets were up, driven by model impacts, primarily reflecting the final TRIM im pacts. This is it for the TRIM, and this was partly offset by an overall improved collateral profile of the loan book. Remaining regulatory RWA inflation is very manageable at around 30 basis points. As you can see on slide 14, the CET1 ratio is well ahead of the ambition. On ROE, it is below our ambition, but we already have seen an improvement versus the previous quarter to 11.2% for this quarter. With more efficiency on cost and capital, and with growth returning, we maintain our ambition and very much intend to continue to provide an attractive total return. To reiterate, cost income remains an important input for our return on equity. We continue to work on our ambition of 50%-52%, and as for distribution, we have currently an amount just over EUR 4 billion reserved outside of CET1 capital with an announced EUR 0.48 to be paid out in October 2021. To wrap it up, the highlights of the quarter. First of all, we subscribe to the sense of urgency to transition to a low carbon economy, and we contribute to that by financing the transition. We have been doing that by steering our loan book with our Terra approach, and we have upped our ambitions by joining the Net-Zero Banking Alliance. Looking at our results, these are good. This quarter, we managed to realize another record quarter in fees to grow our mortgage book and to manage the pressure on net interest income while we kept expenses under control. Risk costs, they came in at minus EUR 91 million. We have released part of the buffer built up in 2020, reflecting an improvement of macroeconomic indicators, but still maintaining a buffer of around EUR 425 million. The quality of the book is evident with the lower Stage 3 ratio of 1.5%, and for 2021, we expect risk costs to come in below our through-the-cycle average. CET1 ratio was higher at 15.7%, with 50% of the second quarter resilient net profit reserved for future distribution, bringing the total amount reserved outside of CET1 capital to just over EUR 4 billion. As the ECB has lifted the restrictions, as you know, on distribution after September, we will pay an amount of EUR 1.87 billion or EUR 0.48 per share on October 12th. After September, we intend to make an additional distribution of EUR 1.74 billion in the form of cash and/or a share buyback, with the latter subject to relevant approvals. That concludes the presentation. Now on to your 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. Star one for your questions or remarks. Go ahead, please. Our first question is from Mr. Benjamin Goy of Deutsche Bank. Go ahead, your line is open. Yes. Hi, good morning. Two questions, please. First, on capital return, and then secondly, on cost. In capital return, I'm just wondering because of this conditionality subject to approval. Just wondering, is there execution risk in case you go for a share buyback as compared to a dividend or something you would expect to kick off in the fourth quarter? Secondly, on cost. I think in Q3 last year you announced that costs are going down from here. Just wondering now with a couple of quarter's actions in place, and now you mentioned some headwinds. What's the balance? Do you think it got easier and you have some comfort from the execution so far? Is there more needed to offset these new headwinds? Thank you. I will take the cost question and then thank you, Benjamin. Then Tanate will take the capital question. I think on cost, when you take out the specials, this is actually the first quarter it went down, the amount still being small. We have made a number of announcements of actions that we're taking, including branch reductions, a restructuring of private banking in the Netherlands, branch decreases in various other countries, including Poland and Belgium. We announced last year already a curtailing of our footprint in Wholesale Banking in South America and Asia. We have come to an agreement with bank99 or actually Österreichische Post on transferring Austria retail activities to bank99. We have transferred already 50% of our clients and 60% of our activities to Raiffeisen in the Czech Republic. What you will see is that these benefits will come in over time. As soon as you announce them, it still means that you go through a period of restructuring. You have a discussion with works councils and unions. You have potential M&A discussions with buyers, as we have now seen, and then only gradually we will see the benefits come in. Yes, with that VAT decision on one of our peer banks, of course, sometimes you have some headwinds. I remain focused and confident on the target of bringing the cost further down. Benjamin, on your capital question, I think first of all, you need to realize that these capital, the EUR 1.7 billion, is reserved outside of our capital calculations today. The second, we have very constructive discussion with the ECB with respect to our capital management discussions, and we have applied to the ECB for a share buyback. These are all in constant dialogue with the ECB. Understood. Thank you very much. Next question is from Mr. Stefan Nedialkov of Citi. Go ahead, your line is open. Hi, guys. Good morning. It's Stefan from Citi. Two questions on my side. The first one is on NII. I wanted to see and check in, given your wholesale lending growth is actually more of a decline, what is your confidence in being able to book the TLTRO 3.2 benefits? The one that runs through December 2021 in terms of loan growth. Related to that, to the NII question, what's the outlook for expanding the negative deposit charging base within existing countries where you do that, such as Belgium? For example, in Germany, there were some press articles about DiBa potentially having to charge more negative rates. Some color around that would be very helpful. That's the NII question or maybe Two questions. Apologies for that. Lastly, on the CET1 target of 12.5%, it seems like you have changed the tone slightly on capital return. You now say that given COVID, you will be targeting a significantly higher buffer versus the 12.5%. Can you put some numbers around how much of a buffer you're thinking about above the 12.5% in terms of capital return? Thank you. Thank you very much, Stefan, for your questions. The first question is question 1A and then 1B, I would say, and then there's a question two on CET1. Today we will take the NII and the CET1, and I will take the net interest rates charging. On Belgium, we had announced, and that start as of July, that we will charge deposits over EUR 250,000. In the Netherlands, we announced, and that starts as of the 1st of July, that we start to charge as of EUR 100,000. In Germany, we announced that we will start to charge clients with EUR 50,000 or more. The latter part being delayed. Obviously, also links to the conclusion of the High Court on changing of conditions for your clients. For that, we will, of course, need to send letters to our clients to agree on these conditions. That will take a bit more time. We will continue to look at the developments, and we will continue to look where there's a need with the pressure that we have on our liability margins to charge. We can never say something to the future. We are doing well in terms of diversifying our income, and looking at our business lines. Also we need to look at what is appropriate charging, depending on the market circumstance, in terms of negative interest rate. We will keep looking at that picture. Stefan, first on TLTRO. I think if you look at our ability to achieve the first target, I think that gives us confidence in our franchise. We're coming off a relatively lower level in October, which is the start of the measuring point. I think we are confident of hitting the second TLTRO. On your second point with respect to CET1 guidance, we have not changed our guidance. Our guidance remain to over the coming years to get to that around 12.5% CET1 level. We always caveated, of course, that we will take our time during the period where COVID still plays, and that guidance remains unchanged. Understood. Thank you. Our following question is from Mr. Kiri Vijayarajah of HSBC. Go ahead, your line is open. Yes. Good morning, everyone. A couple of questions from my side. In terms of the various market exits you've been doing, France, Czech Republic, Austria, I'm just wondering, is that rationalization program now done, or is there still some of your weaker, smaller geographies still under review? Just an update there. On the outlook to volume growth, specifically in the Wholesale Banking, looking out to the second half, you sounded quite optimistic, but could you just have a bit more color on where you see that growth coming from? How much of it is coming from outside Europe? Which sectors is your financing pipeline looking strong? I guess it's early days, but as government-guaranteed lending mechanisms fade away in some of your geographies, I wonder if there's scope for some margin expansion, in the Wholesale [portal], or is that too early to see those kind of trends? Thank you. Thank you very much, Kiri. On the rationalization of the markets, basically you've seen the announcement of selling Austria to bank99. Czech Republic, we're well on our way to transfer to Raiffeisen. On France, we announced a strategic review. We have not come to a conclusion as yet, so I want to be clear on that. That strategic review will likely take until the end of the year. If not, we will come with conclusions, but the conclusion has not been taken yet, but it is under review. I will continue to look at our business performance. That includes geographies, but also business lines. When it comes to retail geographies, like I said before, I will look at four lenses, which is attractiveness of the markets, the ability to reach scale, the ability to get to decent profitability in the medium to long term, or the benefit that the presence in the market has for other markets or whether that country does deliver something that can be used by other markets as well. I will continue to look at that. That is, by the way, always the case. Also in the light of the current environment, I will continue to assess our business lines, but also to assess various businesses, or even beyond geographical lines as well. When it comes to the outlook of loan growth in Wholesale Banking, like we said in the first quarter, there is likely some pull forward as a result of TLTRO. That has happened. That's also why you see, for example, the loans in financial markets being repaid. That is a significant part of it. What we do see is that Asia Pacific and the Americas are already in transition. There we see stronger pipelines, there we see more deals in our green light processes. In Europe, or a number of markets in Europe, we still see that the usage of working capital is at still a relatively low level. I think that when confidence in, let's say, the relinquishing of the lockdowns restores, there will be more working capital need and there will be more capital investments. That will gradually come over time. As for Wholesale Banking, you also asked about guaranteed government loans. Yeah. There were a few particular loans in which there were government guarantees or government supports for some larger clients in specific circumstances. In general, in Wholesale Banking, there was not that much of guarantees in the first place on these loans. That took more place in the mid-c orporate and SME space. Okay, great. Thanks, guys. Next question is from Giulia Aurora Miotto of Morgan Stanley. Go ahead, your line is open. Yes. Hi, good morning. Thank you for taking my questions. The first one will be on fees. ING has a target to grow 5%-10%, but actually has nicely overshot the target so far. With basically the levers that you highlighted still to come, actually EUR 855 [million] probably looks low as a running rate. Would it maybe be time to update the guidance? Is there potential to actually be above 10% over the next year or so? Any more color that you can give us on where a potential good run rate for fees is, that would be great. Secondly, sorry to go back on loan growth. Quarter to date, are you seeing any evidence of, first of all loan demand picking up, but secondly, of deposits going down because people maybe move them to investments or start saving less? Thank you. Okay, thank you very much. I'm pleased that, because I think that in the past our 5%-10% was seen as overshooting. If I translate, Giulia, your question well, you're now suggesting that I'm undershooting. So I need to reflect on that question. I'm very happy with the fee growth, and there are more levers that we can continue to pull. Like I said, developing new propositions, introducing daily banking fees in markets where, by the way, we have not introduced daily banking fees at all. In some markets our daily banking is still for free. Of course, also extending our investment products in markets where we have not done that as yet or can benefit of what we rolled out in Germany. Moreover, in Germany, we're now moving from, let's say, execution only, also to simple advice. Other banks have done it in the past. As I said before, we come from a very low fee environment business, and we're gradually moving ourselves into this space as well. We have an ambition to grow with 5%-10% on average per annum. That's not only for this year, but that's also for 2022, and it's also 2023. I would like to stick to that guidance, but as I told you, I'm quite confident about the lever that I can pull on that front. When it comes to loan growth, yeah, we do not give forward-looking guidance. What I can tell you, and what we've seen in the second quarter, and that's what we have, of course, with a business bank and consumer lending that is largely focused on Northern Europe. We actually saw contraction over the past number of quarters. This was the first quarter, again, that our business banking and consumer loan book, albeit small, but grew with about EUR 1 billion, and that is a first positive sign for that part of the market. Then you had one question, but you were linking the loan demand question to deposits and investment products. Can you repeat that question, please, Giulia? I was just thinking, because over the past year, deposits have been growing much more than loans versus the opposite dynamic happening before. I was hoping that can turn- Me too. From underneath into three, two days. You're seeing any evidence of that turning? Well, we do gradually see that again. What do we see? Good growth in mortgages with EUR 4.2 billion at a rate which is actually higher if you look at it from a quarter and an annualized basis, higher than we've seen in the past number of years. Healthy mortgage growth. We see in business banking and mid-corporates, and please note we're largely a Northern European bank on that front, a gradual return to growth. This is the first quarter in a couple of quarters that we grew. In Wholesale Banking, we actually saw that loans contracted. That had on the one hand, to do with the pull forward of TLTRO. 2, with companies in Europe not yet using that much working capital and capital expenditure, but also because of strong capital markets where companies can benefit from going to the bond market. Now, that will take a bit more time. Again, this will not be structural. At some point, the growth will return, but given where we currently are in Europe, it will take a bit more time than we are seeing in Asia and the Americas. I hope that answers your questions. Our following question is from Mr. Raul Sinha of JP Morgan. Go ahead, please. Your line is open. Good morning. Thanks very much for taking my questions. I'm sorry to bring you back to the risk of undershooting on fees, I'm afraid, as a first question. I just wanted to ask about the investment product fees in terms of sustainability. Given it's up 20% year-over-year. If I look at the first half of 2019 pre-pandemic, it's up 60% over that period. Obviously there's an inflow of AUM and there's also clearly this market volatility environment. I just wanted to get your thoughts on how sustainable you think the investment product fees are going forward. The second question is actually just on capital distribution. Obviously, there is some concern about the remaining EUR 1.7 billion. In terms of your language, you say post-September, but clearly that could mean early next year as well. I can assume that the lack of precision on timing is basically due to the fact that you're waiting for the ECB approval process of buybacks, which is slightly longer, rather than any kind of intention on your part to delay this payout. Is my understanding correct on this? Thanks. Thank you, Raul. I will take the question on fees, and I will leave capital distribution for Tanate. On fees, yes, if you look at the investment product fees, we did have good growth during Corona time. That's by the way, also because we did not really start with that app so long before Corona, so we were just starting it up. It is not that we had a much lower level pre-Corona, and then in Corona, we benefited from it. We also were gearing up to actually being able to offering that on the app. By the way, we just launched Komfort- Anlage, which is the video advice product that we now put on top, and we just started with that. If you look at the quarters, in our view, the second quarter on investment products is more structural than the first quarter. The first quarter had also to do with quite high volatility compared to what we on average do see. The flip side of it is that our assets under management grew, but also the investment accounts grew with approximately 160,000. What we need is continued growth in assets under management. What we need is growth in investment accounts. Then, of course, there will be some volatility about the number of trades, but that is then forming a good basis. It's the mix of those three that will help us to further grow our investment fees as well as rolling it out to other markets as well. Of course, if you look at payments, and that's the second element of it, these increases will be more structural. We increased payments package fees in the Netherlands and Belgium with 15%, and that is just there to stay. We're looking at how we should develop our fee propositions for payment packages in other markets as well. As I told you, in some of the markets, our payment propositions are still free or nearly free. Of course, you do see in payment packages, that's the fixed part of it. If you look at the more volatile part of it is transactions. There, of course, you see due to the pandemic, that international travel is quite low. In most of the markets in which we are active, those are debit card markets. As travel returns, that will go to credit card markets, and that means that our fees on these credit cards will go up as well. Tanate, on capital, please. Yes. Raul, thanks. I repeat our message, which is that we intend to return this EUR 1.7 billion. We have constructive dialogue with the ECB. Just a reminder, the dividend ban only got lifted on the 23rd of July, right? We have applied for that capital return, and we will do so as soon as we get the necessary approvals. Thank you very much. That's very clear. On the fees part, can I just request perhaps, some additional disclosure, perhaps some additional slides, because there's a lot going on through all your initiatives in various different markets. I see Mark sitting next to me sweating, so I think that he will look at it. Thank you, Raul. Our next question is from Miss Anke Reingen of RBC. Go ahead, your line is open. Good morning, thank you very much for taking my question. First, just on net interest income, ex TLTRO. Given the dynamics you are explaining, should Q2 be sort of like a stable level going forward and the upside lever is additional volume growth? Then on your capital return, you say you reiterate the 50% payout ratio, but I just wonder, how are you thinking about the path from your current 15% quarter run ratio down towards your target, even if it's 12.5%, even slightly higher? Is it 50% plus special dividend, or would you consider to increase or revisit the 50% payout ratio to make this more a gradual process? Thank you very much. Thank you, Anke. Maybe I just give you a sense of the drivers of our NII. The first is that the impact of negative interest rates on our liability replication remains there, and it will be there for some time. That's one of the challenges that we face. Having said that, if you look at the actions we're taking, I think Steven has already mentioned the strong growth in mortgages, resumption of growth in business banking and consumer lending, as well as a resurgence in terms of Wholesale Banking. I think those are there. I think if you look at our origination margin, those are holding up. I think that's nice to see. We are taking further actions with respect to negative interest rate charging in this quarter. On July 1st, we are charging our customers in the Netherlands who are having more than EUR 100,000 with us negative rates, EUR 250,000 in Belgium, and for new customers in Germany, anybody above EUR 50,000 who becomes a client are charged negative rates. These are all the actions to deal with the impact of negative rates. The second question that you had, we look at capital returns in two parts, what is in line with our normal dividend policy, which is 50% of resilient profits, and getting from the current levels to around 12.5%. We would do that in terms of specials, whether in cash or in the form of share buyback. Okay. Thank you. The following question is from Mr. Andrew Lowe of Berenberg. Go ahead, your line is open. Hi, guys. Can I ask a quick question on Turkey? Firstly, you haven't had your Turkish exposure slide for the last couple of quarters. So an update on those numbers would be really helpful. Steven, I remember you saying when you were CRO a number of years ago, that your Turkish business was important as it supported lending for German and Italian wholesale clients. Is this still the case? Thanks. Thanks, Andy, for your question. Yeah, you're right. Indeed, we did not disclose it on Turkey, and maybe because in the bigger scheme of things, it's relatively limited. Nevertheless, I'm happy to tell you what the amount is. The total exposure on Turkey is around EUR 8 billion. You can see from the previous quarters that has come down. If you look at remember, because you are referring to my previous role as a CRO, that we started in the past with an intercompany loan amount, including subordinated debt of around EUR 4 billion. Also the subordinated loan has been repaid, so the only intercompany debt leaving is senior loans of around EUR 600 million. That's to give you the lay of the land of Turkey. Part of it, indeed, is Wholesale Banking business, approximately half, and that has to do with large, amongst others, German, but also Italian and other companies that are doing business in Turkey and do export, for example, certain machines or Turkish companies who own, for example, factories and organizations here in Europe, including in the U.K. and in Belgium and others as well. There's a lot of export and import going on with Turkey, and that helps our network well. We remain cautious with regards to the geopolitical circumstance that we have in Turkey, and as I refer to the total amounts and also the intercompany loan in that regard, which I think headed in the right direction. By the way, Andy, our Turkish franchise publishes extensive accounts on the ING Turkey website. If you want to review those, you can look at these as well. That's great. Thank you very much. Thank you, Andy. Our next question is from Mr. Omar Fall of Barclays. Go ahead, please. Your line is open. Hi, good morning. A couple of questions for me. Firstly, just on coming back to NII. I guess the expectation at least in the market is that it'll be flat this year. If I look at volume growth, as you say, it's maybe not coming through as fast as you'd initially expected, and it looks like there's maybe around EUR 60 million of deposit margin pressure every quarter still. If I look at your core geographies, front book margins are falling on the asset side and some of the support for NII this quarter came from FM, which is volatile. Do you think these levers, including negative rate charging that you have, are enough for the second half to really keep NII stable? Just some outlook there would be great. Secondly, could you just talk specifically about Retail Germany, please? Even ex the Greensill impact, it is one of the weakest quarters in several years for what has been one of the best divisions well, in the entire European retail banking space, really. Could you give us some more color there, please? Is it just some of the costs associated with Austria? Fees are down quite a bit, as is NII as well. Sorry, a cheeky final question, but could you give us the amounts of NII revenue and/or profits associated to Retail Austria, France, and Czech Republic just for our modeling, please? Thanks. Thank you very much, Omar. Those are quite some questions. Let me pick it on Retail Germany and also Czech and France. Tanate, I will ask to respond to the NII question. On Retail Germany, maybe a couple of things. If you take it top to bottom, you have good loan growth in mortgages. Again, close to EUR 2 billion in mortgage growth, which is good. If you look at fees, then two things happened. First of all, growth in investment accounts, close to 100,000 new investment accounts, and growth in assets under management, but a lower number of trades. Like I said, good that at least our structural levers are increasing with assets under management and accounts, but not as much volatility as in the first quarter. The number of trades went down, and that impacted that amount with approximately the fee amount with approximately EUR 30 million. The remaining amount of the fee decrease there came from the fact that we had such good mortgage growth because mortgage is going through brokers, and it also means that we pay more out to brokers. The remaining part of the difference between Q1 and Q2 came from actually the success of our mortgage growth. Funnily enough, in short term, if you don't grow your mortgages, your fees will likely go up. That's a bit what it does. If you then look at the book, the broader book in terms of deposits, we still see deposits coming in in that book because COVID is still ongoing. Therefore, you still, if you look at the growth of our retail deposits, this is largely the case in the Netherlands and in Germany. That is an impact that it is having. Austria, of course, still sits on the book. That is only getting off when it gets out of there, which is not the case, and we hope to conclude that in the course of this year. Hence it is still a drag on the cost level for Germany. When you then talk on Greensill, I will not talk about involvement or not, but if we were involved, you would have seen it, I guess. It does mean that because we're part of a DGS system in Germany, the current DGS system that we are a part of, that will provide us with some additional regulatory costs, for which EUR 30 million was a catch-up done this quarter. As thereafter, it will be EUR 10 million per quarter, as far as we can see, depending on the final conclusion of the insolvency. That's actually the P&L top to bottom. The underlying fundamentals for Germany are good, but there were some things that played out this quarter that impacted the P&L for Q2. When you talk about Austria, Czech, and France, we do not disclose separately these entities now, but we have disclosed, I believe, in the fourth quarter, an individual overview of the countries on one page of our investor presentation. It gives you some feel for the size of those businesses. Omar, just coming back to your NII. There are clearly a number of management actions that we are taking and the success of which will help us with our NII. Clearly one, we mentioned, which is achieving the target for TLTRO III. By achieving that, we would sustain EUR 83 million a quarter in additional NII. That's one. The second is that we are increasing the level of negative interest rate charging that we do to a certain group of our customer. If I may remind you, we gave a bit of guidance on the impact of negative rate charging. That this year we would expect somewhere around EUR 200 million in positive benefit compared to EUR 80 million for the full year 2020. Okay? In the second half of the year, we would get the impact of negative charging in the Netherlands and in Belgium coming through. The third is really about loan origination, which is the fact that we do need strong loan growth. We already see that in retail. We do need to see resumption of that in mid-corporate and SME, as well as more sustained growth in the Wholesale Banking. These are all the levers that we would use to actually deliver on continued sustaining of our NII. Thank you. Let's move on. Okay, sir. The next question is from Mr. Timo Dums of DZ BANK AG. Go ahead, your line is open. Hello, good morning. Thank you for taking my questions. I'm also sticking to the two questions. I was wondering if you would also consider M&A activities for either increasing scale or to add some other capabilities. Not only looking at banks but also considering fintechs maybe as an add-on. That would be the first one. On the second question, I would like to understand if you have any additional regulatory burdens ahead of you given that you received a final TRIM letter. Thank you. Yeah. Hi. Thank you very much, Timo. The second question I will give to Ljiljana, and the first question I will do on return on excess capital, and your question was basically about M&A activity. Look, as you can see also with the growth of our primary customers in this quarter with 281,000, the fee growth trajectory I have been going into, the business review that I'm currently doing, there is plenty of things still to do. However, if I look at this diversification, then what we could be interested in would be in skills, either technology skills or certain product skills that we do not have. Because if they do help to diversify our income bases or have a better customer experience, then I will look at these. You can say that these may be the small fintechs, could also be a payment engine, could also be consumer loan engine, it depends. If not organic growth, that's what I would primary, in the first instance, look at. Secondly, you could look at, more opportunistically, at in-market consolidation, if that would apply. That then really depends on what would come. We would look at it, but we're actually not focused on it that much. Thirdly, you could look at, let's say, cross-border consolidation. There we are skeptical, because what we do see, especially in Europe, that banks are compartmentalized in terms of capital and liquidity. Getting a benefit from cross-border consolidation under the current circumstances, to me, is not evident and would take a banking union to get a better benefit on that. Very unlikely. Largely focused organically and then probably focused on certain skill sets if they would add to our client experience or broadening of our product experience. On the remaining regulatory burden, Ljiljana. Good morning also from my side. You will remember we have announced a regulatory RWA inflation of 50 basis points in the previous quarters. We have taken some additional impact this quarter, which actually is EUR 5.2 billion, as we already split it before. What it means for us is the remaining impact of 30 basis points going forward, coming predominantly from the Basel IV day one implementation. All the other impacts should have been taken so far in consideration, specifically with respect to the TRIMs and other inspections. Great. Thank you. Thank you very much. Let's move on to the next. Next question from Benoît Pétrarque of Kepler Cheuvreux. Go ahead please, your line is open. Yes, good morning. Just one for me. Just to follow up on the EUR 1.7 billion, which is the catch-up on 2019 and the related timing on this. Is that fair to assume that the only reason you don't provide a date or a specific quarter is that you want to do it in the form of a share buyback? In other words, in a worst case scenario that the share buyback is not approved, which I don't expect, is that fair to assume that you will be paying this EUR 0.45 per share, EUR 1.7 billion, also on the 12th of October? Thank you. Tanate? Benoît, we keep that flexibility. We want to actually get approval for the share buyback, and that's our intention. I recognize a number of questions on this call about worries about when this would take place. Again, as I mentioned before, the dialogue with the regulator is very constructive, and we expect to do that as soon as possible. Okay. Thank you. Next question is from Stefan Nedialkov of Citi. Go ahead, please. Hi, guys. It's me again for a quick question related to Basel IV. As you look out over the next couple of years, you seem to be relatively better positioned in terms of Basel IV impact. Do you think Basel IV will be a positive event for margin pricing overall when it comes to mortgages and corporate lending? Do you think that it's actually going to be a non-event or maybe even a negative event when it comes to pricing? That's a good question, Stefan. Look, in the end, if you look at all the missions that were happening, all the regulatory scrutiny on models, including Basel IV, had to do on the one hand with having consistency and strength on capital and modeling for banks operating in the European Union. Secondly, to have a sufficient level of capital to actually withstand stress in the financial system. That is what Basel IV, and that is what TRIM and all these regulatory remodeling requirements require to do. In the end, we as a bank have already been impacted by and large by the TRIM missions, and that is because we have many models that are advanced models and are standardized models, and therefore Basel IV, as such introduction, that's more an output factor, is not impacting us so much. If your question is an increase in capital, if that would be an increase in capital, because the target of Basel IV was not necessarily to increase in capital, although if I look at the banks, it has meant an increase in capital. If your question is, does an increase in capital also bode for higher pricing? The simple answer would be yes, because in the end, at least that's how we work, we want the price of the return, and if we cannot price the return, we will return the money back to shareholders. The other element of supply and demand, of course, has to do with how much money is there in the system, and currently there's quite a lot of money in the system. It will need to be absorbed again. We would need to see tapering by the ECB, which at least for the short term is not there. If you look out a few years ahead, that is still a bit difficult to see, but it would also require liquidity returning back to normality because that will also help pricing going up. Those are the elements that play a role. If you look at ING, we will price at the required capital level, and if we cannot make the adequate return, we will return money back to shareholders. Understood. Just a quick follow-up here. Steven, does it make sense to think of Basel IV actually as a bit of a competitive advantage for you in that respect? Because assuming you're already pricing correctly, and you only have 30 basis points left from Basel IV, obviously your peers have a lot more to do in terms of capturing that impact. Even if you're just staying still in terms of pricing, your peers could be increasing pricing. That kind of makes you more competitive and therefore could overall help with your volumes. Yeah, that would be nice. What I cannot do is to look in the kitchen of other banks to see how they look at pricing. Do they look at pricing compared to where their capital is now, or where their capital is in the future, or where they are also so strict on making returns that we require, or looking at costs as strictly as we require it to be looked at? Those are all elements that play a role, but everything ceteris paribus. If everybody has the same return requirements, the same cost income ratio, and the other banks need to get more capital in to get to Basel IV, yeah, that would have a positive impact on pricing. I agree with you there. Thank you. Operator- [audio distortion] Anke Reingen, RBC. Yeah. Thank you very much for taking an additional question. I just wanted to come back to your sustainability slides. Slide three, obviously it has a massive importance, and I just wanted to understand how do you think this will impact your loan growth going forward? Will we be looking at a rundown portfolio at some point, which you will offset with growth and assets which are greener? How should we think about the overall volume? Thank you very much. Yeah. Thank you very much, Anke. That's a good question, actually. I talked about it a little bit when I spoke about the energy transition in the analyst presentation. We are on the transition, and I'm happy that we signed up to the Net-Zero Banking Alliance because it also means that we now will also look at the pathways more strictly. I believe that the whole world will go on to look at that pathway more strictly. It also means that companies need to transition their businesses faster than they would do before. That also means that investment will need to be made in machines or airplanes or ships or energy production or change of combustion engines to actually transition as well. Now, a number of our assets are already green. A number of the assets that we have in our books in terms of lending assets are brown, if you will, and that means that those companies need to make a transition. That can help the level of investment increase, and that's why I'm also happy with the intentions of the European Commission's revised sustainable finance strategy, because that is about that transition, not so much about the status quo and looking at a static metric. We need to help the business transition, and if we are doing that in line with that taxonomy, that will also support investment level for ING. Okay. Thank you. We have no further questions, so please continue. Thank you very much. This concludes the second quarter results. I wish you a good Friday and hope to speak to you soon. This concludes the ING second quarter conference call. Thank you for your attention. You can disconnect your line now.