Good morning, this is Marian, welcoming you to ING's 2Q 2023 conference call. Today's conference is being recorded. 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 a 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, and our earnings press release as posted on our website today. Nothing in today's comments constitutes an offer to sell or a solicitation on an offer to buy any securities. Good morning, Steven. Over to you. Good morning, welcome to our second quarter 23 results call. I hope you're all well. As usual, I'm joined by our CRO, Ljiljana Čortan, and our CFO, Tanate Phutrakul I'm pleased to take you through today's presentation. After that, we will take your questions. The second quarter was another strong quarter for ING, we delivered good results, especially in an environment characterized by ongoing macroeconomic and geopolitical challenges. Our continued focus on our offering of a superior customer experience resulted in good organic growth. We added 227,000 primary customers, with many customers in Germany, the Netherlands and Spain selecting ING as a primary bank. The share of mobile-only customers increased further, 60% of our retail customers only do business with us through their mobile, our main channel. In Wholesale Banking, the volume mobilized to help our clients transition to more sustainable business models reached EUR 47 billion in the first half of 2023, a growth of 17% compared with the first six months of 2022. We continue to benefit from the positive rate environment, and our total income grew by 23% year-on-year, mainly driven by high interest income and liabilities. Our four-quarter rolling average return on equity increased to 11.7%, and we have achieved this while operating on a very healthy CET1 ratio of 14.9%. On August 14th, we will pay an interim cash dividend over the first half of 2023, amounting to EUR 0.35 per share, which brings our total year-to-date distribution to shareholders to around EUR 4.5 billion. Before moving to the financial results in more detail, I will spend some time on the progress we're making in execution of our strategy and related targets. On slide 3, our purpose and strategic priorities are shown. The first priority is to deliver a superior experience, which remains one of the most important reasons for customers to choose and promote ING as their primary bank. As a result, it is one of the key drivers for customer growth. To enable this growth, we continue to invest in our scalable tech and operations foundations and focus on offering a seamless digital experience. In the first half of this year, we have increased the straight-through processing of retail customer journeys to 69%. This means that 69% of our key customer journeys is handled without manual intervention, which is getting closer to our 2025 target of over 75%. Another highlight this quarter is that in the Netherlands, 63% of our new clients were digitally onboarded, up from 52% at the end of last year. Our second strategic pillar is sustainability, where an important aim is to support our clients in their transition to more sustainable business models. As our people are essential to putting sustainability into action, we organized our first global sustainability week in June, and colleagues from around the world participated in more than 80 online and in-person sessions to share knowledge, inspire each other, and exchange views on how to make a difference, both in and outside their work. We also expanded our product offering to help clients make energy-efficient renovations. In Belgium, we launched a new Eco Renovation Loan to support business banking clients in making their real estate more sustainable. We are moving to slide 4, which shows our strength in a positive rate environment. The graph shows our total income since 2018, it's clear that our continuous focus on income diversification and our ability to capture loan growth through-the-cycle has paid off, as we were able to offset the pressure from the low rates and keep our income stable. Now that the interest rates have turned positive, the strength of our business model are highlighted. We have an attractive funding structure, with over 60% of our balance sheet funded by sticky customer deposits. We have a proven ability to grow the number of clients and attract additional deposits. This was again, clearly evidenced this quarter through our successful promotional campaigns, which result in significant inflow of deposits in Germany, our largest market in terms of number of clients. Thirdly, through our diversification, which can capture loan growth through the cycle. This was evidenced again this quarter with EUR 2.7 billion growth in mortgages, despite the fact that the number of transactions in the market was down significantly. These positive impacts are already visible in the P&L, with income being structurally higher than in previous years. Going forward, we expect continued tailwinds from these higher rates, given the structure of our replicating portfolio. Around 55% of the EUR 480 billion replicating portfolio is reinvested longer than 1 year and will continue to reprice at higher rates in the coming years. Lastly, a return of loan demand and asset margins are a catalyst for future income growth, and we expect to be able to further grow fee income. Slide 5 shows our financial targets for 2025 and our performance in the first half of this year. On fee growth and daily banking, we see further room to increase or introduce fees. In investment products, the continued growth of accounts is a strong base for fee growth when market confidence improves, and further support will come from growth of lending fees when overall demand recovers. Higher fees and continued focus on income diversification will support total income growth, though for 2023, the main driver will continue to be liability NII. While there are some uncertainties, such as further central bank rate increases, deposit tracking and customer behavior, the tailwinds from our replicating portfolio on liabilities will continue. This income growth will support an improvement of our cost-income ratio, which has already declined to just over 54% on a 4-quarter rolling basis. Our costs are well controlled despite the pressure from high inflation, and we also continue to invest in our strategy enablers and in marketing, which will support commercial growth and bring cost benefits in the longer term. On our CET1 ratio, we intend to move to our target of around 12.5% in roughly equal steps through our 50% payout of resilient net profit, combined with additional distributions. The next step will reflect the strong capital generation, and we will update the market with a disclosure of our third quarter 2023 results. Good to highlight here is that the Dutch Central Bank reduced the systemic risk buffer requirements for ING from 2.5%-2%, while at the same time increasing the Dutch countercyclical buffer from 1%-2%. As a result of these adjustments, our fully loaded SREP requirement decreased by roughly 32 basis points to 10.7%, and as a result, we will not adjust our CET1 target. Despite risk costs below our through-the-cycle average and no identifiable trends in provisioning, we remain vigilant as cost of living and doing business rises for our customers. Driven by all these factors, we have confidence we will reach our target 12% return on equity. On to the second quarter results, starting on slide 7, which shows the continued strong development of NII. Liability NII was even higher than the shown headline number, as accounting impacts shifted some NII from Treasury and Financial Markets to other income. The increase in liability NII reflected further rate increases and continued deposit inflow, which was only partly offset by an increase of the core rates in some of our retail markets. The positive impact was also clearly visible in Wholesale Banking, with our Payments and Cash Management business benefiting from higher interest rates. In lending NII, we saw year-on-year pressure on mortgage margins due to the rising interest rates, as client rates generally track higher funding costs with a delay, while also income from prepayment penalties was negligible. Sequentially, this effect diminished and lending margins have stabilized. As mentioned, year-on-year, we saw the impact of a temporary shift of NII to other income as Treasury benefited from favorable market opportunities through money market and avix transactions, and for Financial Markets, rising rates and increased business, business led to higher funding costs. Now accounting-wise, this resulted in a reduction in net interest income, while other income rose significantly. Our net interest margin for the quarter decreased by 3 basis points to 156 basis points, fully driven by the increase of the balance sheet total, which more than offsets higher NII. Slide 8 shows net core lending growth. In Retail, mortgages continued to grow, mainly in Australia, the Netherlands, and Germany, despite the fact that mortgage transactions in Germany and the Netherlands dropped significantly. In Wholesale Banking, loan growth was visible in lending. This was more than offset by lower utilization and Working Capital Solutions and lower volumes in Trade and Commodity Finance, reflecting a decrease in commodity prices and lower economic activity. Going forward, with still heightened macroeconomic uncertainty, we expect loan demand to remain subdued. We benefited from our diversified business model as we grew net customer deposits with EUR 17 billion, primarily reflecting the success of our promotional campaigns in Germany, where we had EUR 16 billion of deposit inflows. Roughly two-thirds of this inflow came from existing customers. Wholesale Banking recorded a small outflow. We turn to fees on page 9, which showed growth year-over-year, driven by increased deal flow in Wholesale Banking lending and Global Capital Markets. In Retail Banking, the growth of primary customers and the increase in payment package fees was offset by lower fees year-on-year for investment products, which continues to be affected by less trading activity. The opening of new investment accounts continued and assets under management increased, which will result in higher fees when market activity recovers, as we will grow from a higher base. Sequentially, fees were up, also reflecting an increase in fees in Wholesale Banking, driven by lending, lower capital markets, and corporate finance. Fee income from Retail Banking was stable. Now we move to slide 10. Excluding regulatory costs and incidental items, operating expenses were up 6.9% year-on-year. This was mostly due to the effect of high inflation rates on staff expenses, reflecting indexation and CLA increases across most of our markets. We also continued to invest in growing our business, including higher marketing expenses, these factors were partly offset by positive Avix impacts and the exit from the retail markets in France and the Philippines. Quarter-on-quarter, expenses, excluding regulatory costs and incidental items, decreased with 0.5% despite higher staff expenses. Last quarter had included EUR 44 million of legal provisions and restructuring costs, while these amounted to EUR 22 million in the second quarter. Regulatory costs were down year-on-year, as the second quarter last year had included a EUR 92 million contribution to the institutional protection scheme in Poland. Our contribution to DGS funds has decreased as well. The quarter-on-quarter decrease in regulatory costs reflects the full payment of several annual contributions that we took in the first quarter of this year. Risk costs in the next slide, that's slide 11, which were EUR 98 million this quarter, or 6 basis points of average customer lending, below our through-the-cycle average of 25 basis points. This included a EUR 39 million increase of management overlays, mainly reflecting the current inflation and interest environment, as well as some regular model updates. The total stock of management overlays amounts to EUR 560 million at the end of the second quarter of 2023. In Wholesale Banking, risk costs included a few individual files, and this was, however, more than offset by a further release of our Russia-related provisions as we continue reducing our Russia-related exposure. Total offshore exposure, with regards to Russia, amounted to EUR 1.7 billion at the end of the second quarter. Total risk costs in Wholesale Banking amounted to -EUR 15 million, minus 1 5. In Retail Banking, there were limited additions to risk costs in Poland, Spain, and Belgium. In Stage 3, we saw modest inflow with no clear trends identifiable. The Stage 3 outstandings declined slightly this quarter, while the Stage 3 ratio remained low at 1.4%. The lower Stage 2 ratio mainly reflected sales and repayments, including a further reduction of our offshore Russia-related exposure. All in all, a very benign quarter in risk costs, although cost of living and doing business rises for our customers, we remain confident in the quality of our loan book. Slide 12, that shows our CET1 ratio, which increased to a very strong 14.9%. CET1 capital was nearly EUR 500 million lower, as the distribution of EUR 1.5 billion was largely offset by the addition of 50% of the resilient net profit for the quarter. Furthermore, risk-weighted assets were EUR 4.5 billion lower, including EUR 200 million of Avix impacts. Credit risk-weighted assets decreased by EUR 5.6 billion, mostly driven by model updates and improved profile of the loan book, as well as disciplined capital management and Wholesale Banking. On our distribution plans, we will pay an interim cash dividend of EUR 0.35 per ordinary share over the first half of 2023 on August 14th, and we will update the market on our future distribution plans with our third quarter of 2023 results. As mentioned before, the next steps to converge to our CET1 ratio target of 12, 12.5% by 2025, will reflect the strong capital generation. To wrap up with the highlights, a strong second quarter in which we delivered an excellent set of results. Execution of our strategic priorities delivered strong growth of primary customers, and we increased our volumes mobilized to finance the transition to more sustainable business models. The financial results in the first half of the year clearly demonstrated our business model and strength position as well, to benefit from the positive rate environment. Total income increased, with growth across all segments, and expenses remained under control. Our capital position remains very strong, and we are well positioned to continue providing a very attractive return to our shareholders. Going forward, I'm confident that we will continue to deliver robust financial results while successfully executing our strategy. With that, we move to Q&A. Thank you. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question from the queue, please press star two to cancel. Again, please press star one to ask a question over the phone. We'll take the first question from Jon Peace, from Credit Suisse. Yeah, thank you. Good morning. My first question, just on net interest income, I realize that treasury swap reallocation to other income can be volatile from a quarterly basis. Should we be just adding on that reallocation to the current quarter's NII and seeing EUR 4.4 billion of NII as really a sustainable base for the second half of the year and for 2024, given your comments about the tailwind from the replicating portfolio? Second question, please, just on the cost of risk. Any guidance you might give us for the second half of this year relative to your through-the-cycle rate? You're obviously still carrying quite a degree of overlays, and I just wonder if there's any pressure to utilize those, which might keep the cost of risk very low. Thank you. Thank you very much. Jon Peace, I'll give the first question to Tanate, and then the second one to Ljiljana. Thanks, John. Just on NII in particular, the two anomalies is really our positions on Treasury and our position on Financial Markets. As we have given you in the last quarter, we guided that, that trades in Treasury was likely to be about the same in Q1 and Q2, and that has been the case. Our expectation is that the opportunity will exist going into the second half of the year, but the impact will start to decline a bit in Q3. In Financial Markets, it really just depends on our trading position. That's too volatile to predict. Good morning also from my side. With respect to the cost of risk guidance, as you know, we generally do not guide on that category. We refer to our low through-the-cycle, 25 basis points average, compared to customer lending. As you've seen, the first, the first half of this year has been very good for the, also quality of our portfolio, has proven the resilience of quality of our portfolio. Also, as CEO mentioned, we remain vigilant with respect to the uncertainty in the environment, that's why we are sticking to our through-the-cycle average. Okay, thank you. The next question comes from Giulia Miotto from Morgan Stanley. Please go ahead. Hi, good morning. My first question is on NII as well. You mentioned, you know, tailwind, tailwind still, still to come. 55% of the replicating portfolio has a duration longer than 1 year. Given that we expect the ECB rates to peak and then start decreasing next year, when do you think your NII will peak, essentially? Timing of the peak of NII is my first question. Then the second question on asset quality at the moment remains very benign, but is there any portfolio that you're watching more carefully, in particular, on the commercial real estate side, for instance, or, you know, residential markets in the Netherlands or Australia? Thank you. Yeah. Hi, Giulia. Thank you. I'll give the second question to Ljiljana, the first question I'll do. It's to some extent a similar question as the previous as Jon Peace. Look, I think that the good thing is that we are operating in a number of markets, so it's diverse, and we continue to attract deposits. One of the elements that's important are we continuing able to get clients in, and are we continuing to be able to attract deposits? The second is, okay, what is the competition doing in these different markets? The tracking speed so far has been around 20%. We will see- need to see how that will develop, but it's still significantly lower than we've seen in previous cycles. Then, of course, it also depends on the increase in interest rates that we co- that we see with the ECB. Now, it's, it's hard to predict what exactly it will be, but people expect either one or two more hikes. That competitive impact will remain to be seen, and we, we will play our role to see, okay, how do we balance it out in terms of the role that we play in different markets? We're typically more of a follower in the incumbent markets in which we're active, and where we grow number of clients in the challenger markets, there we sometimes do marketing actions to attract customers, like we have seen now in Germany, for example. That led to also an incredible amount of EUR 16 billion additional deposits. The good thing is that interest rates at some point will rise, but we have a replicating portfolio, whereby the majority, indeed 55% of our euro-denominated deposits, is replicated for longer than 1 year. That will be a good support even when competitive pressure increases to further benefit from this interest rate environment. What the level exactly will be, we will need to see, depending on the market circumstances. Good morning, Giulia, also from my side. Correct, our asset quality remains strong and resilient as well in the second quarter, and we do see some better prospects eventually for soft landing in some of geographies we operate in. However, this uncertainty is still there, and thus, as said, we remain vigilant when it comes to the higher interest rate and inflationary environment, and specifically across the portfolios that are experiencing higher, I would say, cost of doing business or higher borrowing costs, but as well for private individuals, cost of living. That means that the, obviously, focus is on the more cyclical parts of the portfolio. Clearly, we are looking at the commercial real estate, at acquisition finance, but as well, some other still energy-intense manufacturing parts of our portfolio. Far, we do not see structural deteriorations there, but that's also one of the reasons why we proactively take the measures in order not to allow those to become visible. Thank you. Thanks. The next question comes from Raul Sinha from JP Morgan. Good morning, everybody. Thanks very much for taking my questions. Two from me as well. The first one, Steven, I was just wondering if you, if you think you have seen the peak in inflation pressure on the cost side. The reason I ask that is because I think costs came in slightly below where the market was expecting. They seem to be analyzing just below where consensus is sitting for the full year. Would you expect perhaps there be, to be more or less cost pressure in the second half of the year compared to what you've delivered here? That's my first question. Then the second question, just coming back on NII. Some of the other banks which do have financial markets businesses, where the funding cost of the financial markets business is still booked in NII, are moving towards a banking NII definition, in particular, HSBC, of Standard Chartered in the UK. I, I guess you guys have the same accounting as symmetry. I was wondering whether you considered, perhaps at your end, to refine the definition of NII or perhaps give us another measure in terms of banking NII. Thank you. Thank you. Maybe I'll do the second question first. We're currently not considering to define a definition, but I can see that it requires some explanation because it indeed moves from NII to other income. Then, Nate, I'll give you the first question. Hi, Raul. Just on cost development in the second quarter, probably three things to note. The first on our regulatory expenses is down EUR 247 million. Right, a good evolution. We have guided the market already that by the first quarter of 2025, we expect that regulatory expenses will be EUR 400 million lower than where we see it today, well, where we see it in 2021. Our expectation is that the regulatory expenses for this year will be approximately EUR 180 million lower than previous year. That's on regulatory expense. On OpEx, yes, we do see that the inflation pressure is coming down. The publicly announced indexation in Belgium, which used to be 10% in December, by June this year, has gone down to around 4-4.5%, so that pressure is coming down. Having said that, we also do spend more money in terms of client acquisition, in more advertising, and those are also present in our numbers. You know, a 7% OpEx clean for volatility, it's a good guidance of where our OpEx have run in Q2. Thank you. The next question comes from Tarik El Mejjad from Bank of America. Please go ahead. Hi, good morning. Thank you for taking my questions. A couple from my side. I mean, the first one on the revenues, maybe just to summarize a bit what you, what you've been saying for my colleagues' previous questions. I noticed in your slides, in Q2 slides, that you've in the guidance- or sorry, in the targets for total income, you removed the line with, like, above 10% total income growth for 2023. I mean, obviously, you are double that. I mean, consensus, sorry, is double that, you're showing strong trends. Can you maybe update that guidance or tell us what you think about where consensus sits? Maybe that'll give us view on, on where the fees and NII trends, trends from here. Then second question is on the capital and distribution. I appreciate you're doing an update in Q3, but that's been an issue here for, for a while already, where you clearly generate more capital than you can distribute, which is a good problem to have. When you do the math, it's very difficult to imagine how you can convert 12 to 2.5, and you reiterated that last Friday of the stress test today in every occasion. That implies a massive step up in the distribution in the special every year, starting from Q3. Is that something that could be on the table? Second question, how can you deliver that given the liquidation of the shares and so on? Does that mean that you will have also some cash special and not only buyback on top of the current run rates? Thank you. Okay, thank you, Tarik. Let me start on the capital distribution. Indeed, I mean, we do the math as well. Indeed, our capital moved up again on the back of these results and also on the good capital management, especially in Wholesale Banking this quarter. What I also said in the presentation, that we will give an update in the third quarter, but that we also then see that the roughly equal steps if we want to move, and we want to move to around 12.5%, that hasn't changed. It also means that the steps need to reflect the higher capital that we're having. I think that what you're saying and I are saying are exactly, exactly the same, with having that math in mind. On revenues, no, we're not giving additional guidance. I mean, above 10%, and with confidence, I can say it's above 10%. The next question comes from Benoit Petrarque from Kepler Cheuvreux. Yes, good morning. Thank you for, for the presentation. Now, just to first come back on the accounting asymmetry, which create a lot of noise, obviously. Maybe focusing on the Financial Markets NII, clearly quite difficult to estimate, but, you know, I understand that- ... the trend was very much linked to the kind of ECB rate hike cycle. You know, when this cycle will kind of stop, we get probably a cut even at some point, it's fair to assume that the NII from the financial market will recover sharply, potentially back to the previous level. I wanted to check that with you first. On the, you know, the stress test outcome, sorry to come back to that, but, it was 550 negative on your three and adverse scenario. I think you were ending at just below 9% in the adverse scenario, with a starting point at 14.5%. You know, can you really bring the CET1 ratio back to 12.5, given your sensitivity to an adverse scenario according to the ECB? That will be the question. Also linked to the, the capital distribution, I was wondering if you, if you think we can, we can plug payout ratio, kind of blended, including buyback above 100%, if technically this is not-- there's no issue. Because obviously, if you want to bring your capital down, then, you know, we have to think about payout ratio, above 100%. I wanted to, to, to make sure we can do that without much problems. Thank you. Okay, let me answer the question on CET1, and then Tanate we'll talk about the Financial Markets NII. Bless you. Sorry. No, that's okay. With regards to CET1, and and you, you, you mentioned the stress test. It was, of course, a very insightful stress test. It was also quite a static stress test. The, the, the input factors of that stress test this time had their impact on on banks with presence more in the northern part of Europe, and that's what you see reflected. The stress test does not talk about how would you respond to this stress, which typically is being done, but this is just a this is a stress test, which is good, and we do many stress tests. Then separate from that, we have very good capital of 14.9%. We have a targeted capital ratio of 12.5%, that we've also, at the time, agreed that when we set it, agreed with the ECB. We are confidently moving in roughly equal steps to the 12.5%. That also means, and you're right, that, in that, in that mathematical calculation, that means that on aggregate, we need to pay out more than 100% of our profits to get there. We are calculating as well and giving you an update in the third quarter. Benoit, just on NII, it really is more volatile and harder to predict. It depends really on two factors. The first one, I think, will be sustained for some time to come, which is that the absolute cost of fund is higher, right? That clearly will be visible in coming quarters. At the same time, it also depend on our trading strategy, on the product mix demanded by our customers. I think it remains a volatile line item from an NII FM perspective. If you think about 2024 on the FM NII, kind of do you think we can go back to the EUR 300 million run rate, or will that be kind of too positive? No, I, I think it's harder to predict, but as, as I said, the big drivers is that the, the absolute level of borrowing costs is higher, given central bank rates, and it depends on the product mix from our clients. Okay. Thank you very much. The next question comes from Benjamin Goy from Deutsche Bank. Yes. Hi, good morning. Two questions. One, to follow up on the 12.5%, is there any material risk weight inflation left from a regulatory point of view, in your view? Let's say, by 2025, would you keep a buffer for cyclical deterioration when your risk weights increase, in that? Then secondly, a bit more high level of, of what a bigger, bigger picture question. Anything on AI you would like to flag you're currently doing or opportunities to see going forward? Thank you very much. sorry, the, the second question, I didn't quite get... Generative AI, Artificial Intelligence. Anything you would like to flag on AI? Okay, let me start with the second one. We currently we do use AI in a number of our processes, such as contact centers or collections, or marketing propensity models, for example. That helps us. That can also help better decision-making if you do it in a fair and transparent way. That's the most important thing, especially with AI. When we talk about generative AI, yeah, that is new. Currently, in ING, we are, we have forbidden people to use generative AI in their in the ING processes, and we will, in a sandbox, experiment with, two initiatives, just completely separate from anything else, to better understand what the benefit is, because it could have a benefit, but also how we can control it. Before we are able to control it, we will not roll this out in the organization. We first will separately test it, as we always do with innovations, and then see to what extent we will roll this out in the organization. With regards to the capital, the, or with regards to the, the RWA, there are two elements. I will answer one of them. If you ask, "Are you keeping a buffer in the RWA?" I think what you could, would... You, you may mean is-... To what extent are you taking countercyclical buffers into account in your capital levels? In this case, around 12.5%, and we have. We, all the, the capital levels and the buffers are all in the 12.5%, so we've taken it into account. Then you also said something about Basel IV or regulatory impact on RWA. For that, I give the floor to Ljiljana. Thank you. Good morning, Benjamin. As we've informed you several times, we have, through our models or through the overlays, absorbed most of the expected regulatory RWA inflation ahead of 2025 Basel implementation. As also said several times before and also seen this quarter, there are some quarterly adjustments that come from the regular life of the model life cycle, which can be related to methodology or policy update or calibration of existing models. These impacts or these volatilities might come in or revert back. Through the cycle, as already the majority of the, or already impact has been taken into account in existing numbers. Thank you. It really is more than 100% payout to get to the target. Thank you. The next question comes from Kiri Vijayarajah from HSBC. Yes, good morning, everyone. A couple of questions from my side. Firstly, coming back to the deposit campaign in Germany, just a bit more color there on what the thinking was, 'cause was it about accelerating the primary customer number? Because it did feel like you'd lost a little bit of momentum at the 1Q stage when I compare you to the run rates of last year. Or was it more about, you know, managing your overall deposit numbers 'cause you, you know, you may have had, I think you did have some outflows on the wholesale side, so you wanted to sort of compensate there. Should we view that campaign as a one-off, or could we see more of those deposit campaigns being repeated in some of your other geographies? Then secondly, turning to the loan growth side, all looks, you know, fairly robust and, and well balanced across different divisions and, and geographies. Is the aim to put the, the deposits to work quite quickly into loan growth, in which case maybe you're hoping to see a bit of a pickup? Or are you happy to let those, that cash flow into the replicating portfolio? I guess I'm ultimately asking how sticky you think those, those new deposits are, in terms of how you're going to redeploy that. Thank you. Good. Nice questions. Thank you. Now, the deposit campaign in Germany was focused on gaining customers. I don't know how many of you know, but we have a stated ambition of getting to 10 million customers in Germany by the end of 2025. We're currently at 9. Of the deposit inflows, over two-thirds came from existing customers, which is good. Typically, customers that are already existing and they, they bring more money to the bank are more sticky, so that's helpful. We will always, like we've done also in... We have a lot of experience with marketing campaigns over the past number of decades. We're, of course, a big part of our business, Retail Banking in many countries. In countries where we want to grow our customers, we now again, have promotional rates, so not core rate increases, but promotional rates to attract customers, and we do that, at a, as well as we can, time to moment. In this case, we were the first big bank who started such a campaign, which was very well timed, because then it caught the attention of the public, and that's how we are looking at it. So whenever there are opportunities, we will look at it further in all the markets in which we're active. In general, I said typically in the incumbent market of the Netherlands and Belgium, we will be more of a follower, and we can be more assertive in these promotional campaigns in other markets, but that really depends on the market circumstance. When it comes to loan growth or putting these deposits to loan growth, look, in the end, we are really focused on being prudent here. What you see is that the mortgage market has come down in the biggest three markets in which we're, which we're active. Because about 80% of our total mortgage portfolio of a bit over 300 billion comes from the Netherlands, Belgium, and Germany. In these markets, the new dwellings that are being sold are down between 40% and 50%. In that sense, the market is, is, is, is, is benign or the, the, is, is, is not actually active. What was good is that we were able to increase the number of mortgages sold and increase our, our books, but on a relative scale, it is limited, and the focus is on making sure that people can repay, and we do not loosen our credit standards because we now have more deposits, and we, we remain very vigilant of what is going to happen in the next quarters. Great. Thank you. The next question comes from Amit Goel, from Barclays. Hi. Thank you for taking my questions. I've got a few just relating to the slide 16, replication portfolio. One, I just want to check on the size of the book, 'cause it seems to have grown from about EUR 460 billion in Q3 to EUR 480 billion, so it's outpaced the growth in the deposits. Just curious how you're driving the size of that portfolio and the incremental piece, how you're reinvesting that. Secondly, in terms of the 55% of the book, which is greater than 1 year, can you give us an idea of what the duration is on that part of the portfolio or how that's structured? Then, lastly, just on the pass-through, just curious, I guess, relative to the average rate of 20%, during the quarter, you know, how, how that's kind of tracking towards the end of the quarter, and into, you know, the start of Q3. Thank you. Tanate, this seems like a lot of questions for you. Well, Amit, thank you very much. The level of deposit growth, it's really something that is driven by customer growth, customer activities, and the prevailing market. From that perspective, the growth in the liability is actually welcome from that perspective. Unlike when we were in negative rates, liability replication was actually PNL, you know, negative, but now replication is PNL positive, so that's a good sign. We have given you this guidance on replication of 45, 55, and from that perspective, you know, we see that we replicate about that same level, depending, of course, on different market as well. At the pass-through rate, we are at about 20% as of the end of Q2, but we expect that year to date, it's around 29%. Okay, thank you. Just, just on the size of the replicating portfolio, I guess just what I was checking there was when you gave a disclosure, I think at Q3 2022, you said the size of the book was about EUR 461 billion. Obviously, that's grown from EUR 461 to EUR 480. Now, it seems like the book growth has outpaced the kind of the growth in actual customer deposits. I just wanted to check what's driving the size of the replicating portfolio, and can we expect that portfolio to continue to, to grow or be stable or, or maybe come down in the future? It's driven by flows by our customers. I, I think the expectations is that as maybe the market starts to slow down on, on deposit growth, then the replicating portfolio will be less. Then if, like we see in Q3, demands for deposits continue to come into the bank, then it will be more. Got it. You're seeing a pass-through, I think you said, of 29%. Is that correct? Yes. Yes. Year to date. Yep. Awesome. Okay. Thank you. Yes. The next question comes from Flora Bocahut from Jefferies. Please, go ahead. Yes, thank you. The first question as I had is actually around the ROE target of 12%. I think this is the target you have on the CET1. That would be 12.5. You obviously, you know, at 12% over the last 4 quarters, but that on a CET1, that is north of 14.5%. The question here is really why, why stick to that target? I know you don't like to update those targets too often, but, you know, we've had many other banks updating our targets this year. Is there anything that's holding you off from upgrading the ROE target towards 2025? Is there anything negative that you expect will change the picture? Then the second question is regarding the ongoing share buyback. You know what? I've been surprised by the, the speed at which it's been conducted so far, in the sense. I know it's not in your hands, that there is a mandate towards another investment bank, but in the sense that, you know, at this pace of buying just EUR 4 million a day, it would take beyond the deadline. Can you just confirm that with certainty, the EUR 1.5 billion buyback will be finished at the deadline, even though that implies a significant increase in the daily volumes that needs to be bought until the deadline of 18th of October. Thank you. Okay. Thank you, Flora. On the share buyback, we can confirm with certainty the share buyback will be finalized in October. Then on the ROE target, look, we have said that we gave indications at the investor presentation, and that if we would give an update, we do that once a year after the four-quarter results, and that's how we do it. Otherwise, we need to give updates every quarter, so we stick to that yearly cadence. Thank you. I'm sorry, I was on mute. We'll take the next question from Guillaume Tiberghlen, from Exane BNP Paribas. Good morning. Thanks for the question. The question relates to the RWA in the Wholesale Banking division. I understand demand is weak, and you, you expect it to remain subdued. I understand your models can go up or down, depending on the, on the model cycle. I'm more interested in how you think about the strategy for the RWA development in the CIB. What do you actually want to do? Do you want to continue to lend with lower density, lend less? Can you just elaborate a little bit about your strategy for growth in RWA in Wholesale Banking? Thank you. Okay. Thank you for the question. Clearly, we are a bank that is focusing on very strong, large corporates, and we have strong knowledge in a number of sectors, and we have had that for decades. We stick to those sectors, and we stick to those corporates, so there is not a change in risk structure or in risk appetite. At the moment, we do see some lending pickup in, in large lending deals, but at the same time, due to lower commodity prices, we also saw an impact in lower Trade and Commodity Finance, which, which outpaced that lending income. Markets remain relatively uncertain, given also the economic outlook. What we do work on is, first of all, to continue our strides to help customers to transition to more sustainable business models in light of the Paris Climate Accord. That's what we focus on. Secondly, we're still very much an underwrite to hold bank, and we also work on better capital velocity, which basically means that we will increasingly also underwrite and then sell. That's what you have also partially seen now in the second quarter coming in, that part of the decrease in RWA in the Wholesale Banking was because we started in our strategy, with also moving and doing more in capital velocity. Last but not least, also, we have further deleveraged our exposure in Russia. We continue to do that. Currently, our total exposure in Russia is EUR 1.7 billion, but came down from EUR 200 million higher earlier this year, and that has also led to some RWA release. Those are the two factors. I mentioned already the strategy we have regarding the Wholesale Banking, lending, and capital velocity. Thank you. Can I just do a small follow-up on the deposit data? I didn't hear earlier, did you say you're at 29% at the end of the quarter? Until now, we had 20%, but with the rate increase of the Netherlands as per August 15, the tracking will be 29%. I see. Thank you. Thank you. The next question comes from Chris Hallam from Goldman Sachs. Please go ahead. Yeah. Morning, everybody. Thanks for taking my questions. Just 2 of them. First, on capital allocation, you've talked a lot already about distribution, but if you look at the businesses, you know, you're running well ahead of that ROE target at 12.5% quarter 1. Cost of risk is very low with those overlays still there. Given that, are there any business areas where you're now considering more capital, putting more capital to work versus when those targets were initially calibrated, i.e, more capital-intensive areas? You touched on this already for the CIB, but just perhaps for the broader group. That's the first question. Then a follow-up is to an earlier question on deposit growth in Germany. Is there any color you're able to give on the marginal cost of attracting those deposits? Obviously, there are some, some big headline deposit offers out there in Germany from some other players. I was just wondering how we should think about marginal deposit funding cost versus the aggregate cost. Right. On the first one, capital allocation, we will always look to optimize capital allocation. We have return equity targets for Wholesale Banking and Business Banking and Retail Banking, and we price the margin, the marginal deal, and we're not going to deviate from that because we now have more capital. We want to continue to grow with prudency in all the markets in which we're active. Big focus also in further growth in Germany, like I said, growth in retail customers, and we want to strengthen our network position that we have as a wholesale bank across the world. Again, we do that in the existing framework of pricing the marginal deal to the return. If we can't make that, and if we can't make the client return wholes, we will not do it. No deviation from that. Secondly, on the deposit growth in Germany, that marketing campaign at the time was done at 3%. Also we made money on that marketing campaign because the ECB rate at that time was already higher. The next question comes from Farquhar Murray from Autonomous. Please go ahead. Morning, all. Two questions, if I may. Firstly, on capital management, kind of two competing signals in recent months. One, the cut in the O-SII buffer, and the other, the heavy drawdown on the stress test. I just wondered if you could outline how those play through into the discussions on the 3Q update and more generally, the dialogue with the ECB. On paper, I think the stress test should feed into the P2G in some way, so I wouldn't mind just some color around that. Secondly, just coming back to Benoit's question on the Financial Markets, NII. If I look back more than a decade, I don't have a period where FM NII was negative, though it is volatile. Your answer to Benoit seems to suggest that if I think rates remain more normal from here, I should build in a structurally negative NII for FM with a positive counterpart in other. Am I understanding you right there, and how do I square it with the history? Thanks. Thank you. Regarding the lower capital buffer of the DNB, at the time that that buffer came in, that was at the time that there was no three-pillar system in Europe, huh? The ECB hadn't started this yet, and there was no SRB and no European deposit system. In that setting, and in that setting, local supervisors increased buffers for their large banks, let's, let's put it a, a too big to fail buffer. Increasingly, banks have increased their own capital, and there is now that three-pillar system in Europe, as a result of which, that has entirely weighed for DNB to, in the end, decrease the buffer. That means that the, the, the, the overall capital requirements that I just said, they moved to approximately 10.7%, and therefore, that's further in line with our around 12.5%. Regarding the stress test, the stress test is a stress test, as there are many stress tests. We do a number of stress tests internally as well, that we share with the ECB and with other supervisors. That has no bearing currently on our 12.5% targets, and we remain in positive discussions with the ECB about the next steps that we would then be then to take. We will update you further in the third quarter. Farquhar, on NII in Financial Markets, maybe a bit more nuance in the answer. It's three things, right? The absolute rates are higher, but it also depends on the product mix, and also it depends on the differences between major currencies, the arbitrage between euro, dollar, for example, right? I wouldn't call it that you should be looking at a structural increase in NII of that such, but I remain that funding cost is higher, but that it just depends on these three things, which remains volatile in the Financial Markets results. Just as a more general question, if I think of things as normalizing from here, should I build in a structurally negative NII FM? Is that, is that the kind of permanent structural outcome from here? No, I think it just depends on movements, right? You have, for example, opportunities, trading opportunities, product mix from customers. I wouldn't structurally put it in, like at the levels that you see in Q2, but at the same time, funding costs are higher. Equally, should I maybe transition back to history? Would that be a more reasonable guesstimate? I, I would not say that would, that would be a good guidance, either, in light of current interest rate environment. Great. Many thanks. The next question comes from Matt Clark, from Mediobanca. Good morning. two questions, please. Firstly, on risk-weighted assets. Looking at template CR8 in your Pillar 3 disclosure, you've had a kind of a tailwind for IRB risk-weighted assets from asset quality in the past few quarters, and also a tailwind from the other category there of EUR 2 billion per quarter. I was just hoping you could give some explanation there about why your asset quality is getting better, it's a bit counterintuitive, and what the other benefit to your risk-weighted assets, which has been quite meaningful, has been. Then secondly, on the kind of cross-currency, interest rate arbitrage trades, if this impact started around 3rd quarter last year, and you seem to be saying it's going to last a bit more into the 3rd quarter this year, is it the right conclusion to draw that you put these trades on with a kind of 12-month duration? Just trying to work out, you know, how long you're willing to tie up your balance sheet for in these trades as a general rule when the opportunity arises. Thanks. Okay, Tanate, the Treasury cross, FX trades. That trade and the environment for that trade continue to exist. It should decline over the next 3 months. Guidance for 12 months, that I think just too many factors to factor in. I think the trade exists, it's gonna decline somewhat in Q3. if I understand it right, you put these trades on for a defined term, and you kind of lock in at the inception, the economics, the spread, and then how much it impacts your NII will depend on the relative interest rates of U.S. versus euro, but the economics of the deal itself will be defined at the outset. I understand your question. You don't know? Yeah. No, I completely understand your question. These trades are tended to be short in duration. By short, you mean? I, I don't think we're gonna give our trading positions on an analyst call, but let's say that the trade exists, it will decline in Q3, and that's that's our guidance. Okay, thanks. Okay, Ljiljana, RWA. Good morning. As we know, RWA size and dynamics depend on number of factors, and it's subject to volatility based on both internal and external factors. What you've noticed, based on the decrease due to asset quality, is driven by several reasons. The most significant one is successful de-risking of Russian exposure, which has taken an huge amount of our RWA in the 2022, and is now at EUR 4.5 billion, compared to even EUR 13.5 billion a year ago. That's one, that is first. Second one is clearly the structure and quality of your loan book impacts the RWA from the perspective of the tenor. What's the structure of your short-term versus long-term exposure, but as well, what is collateral that you're having behind? Third, there is clearly a dynamics in the portfolio where there are certain repayments of the higher rating classes, I mean, worse rating classes, in favor of the ones better rated. All of these together might have offset some of the negative example impacts from the environment, like housing price. Let's not forget there as well, we do have a floor on some of our portfolios, so these negative impacts from the environment might have been already encountered for. In general, that's the overall picture. Thank you. Specifically, this other line that's also been quite meaningful on, on that table, EUR 1.7 billion of benefit this quarter. You would have, you would have to be more specific which exact line, because I do not have a template in front of me. Why don't we come back to that? Okay, I'll take it off. Yeah, well, we'll take it offline with media relations. Thank you. Thank you. Sorry, investor relations. I'm being corrected. We will take the next question from Anke Reingen from RBC. Yeah, thank you for taking my question. Just 2 small ones, please. On the capital distribution, is there the comment about the roughly equal steps? Could that be under review with your Q3 update? Because the commentary seems to be a bit more, that it could be potentially a bit more. Secondly, on the costs, do you think the 7% growth year-over-year is a good indicator for the full year trend? Thank you. Okay. With the roughly equal steps, we meant roughly equal steps in terms of CET level moves. If I translate that, that if there was a bigger delta between 12.5% and where we are in our capital, we need to make bigger CET moves to come down. That's what we will reflect. A few of our colleagues already said, "Hey, but mathematically, that means that you would need to do more to get to those roughly equal steps." I've confirmed that I have also made that same calculation. With regards to the 7% run rate, yeah, that's indeed what Annette said. That's a, a, a clean cost increase of this quarter compared to the same quarter a year ago is 7%, which is inflation, but also the investment that we make in our digitalization and marketing and growth efforts for customers. That is a good run rate trend that we currently see. Thank you. As there are no further questions, that will conclude today's question and answer session. I will hand the call back to Mr. Van Rijswijk for any closing remarks. Yeah. Thank you, operator. That's, that is the end of the analyst call, but not before I thank Marieke Bakker, because she has been working vigilantly over the last number of years to keep us sharp and also have good conversation with all of you, and make all these fantastic presentations. I would like to thank her. She's going to move on in ING. She's going to work in another part of ING, and we're very happy that she remains with ING. But I want to express my appreciation for Marieke. I would like to thank you all for, again, listening and for your questions. I wish you a great day, and I also wish you a great summer. Thank you. Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.