ING: How a Dutch Bank Survived the Bailout and Became Europe’s Digital Lender

ING is the Dutch bank that was rescued, dismembered, punished and then rebuilt into the eurozone’s reference digital retail lender. Few European banks have travelled further in eighteen years. In 2008 ING was a bancassurance conglomerate with a US savings business and a balance sheet it could not fund; by 2026 it is a bank-only group with no branches in most of its growth markets, a 13.1 per cent CET1 ratio, a rolling return on tangible equity above 14 per cent and a habit of handing shareholders several billion euros a year in dividends and buybacks. This article traces the bailout, the European Commission’s forced break-up, the Hamers money-laundering affair, the mobile-first strategy that now anchors the group in Germany, Spain, Australia and Poland, and what the 2025 and first-half 2026 results say about the model. It is part of the Netherlands Company Stories hub.

Why did ING need a state bailout in 2008?

ING needed public capital because it had grown into a globe-spanning bancassurance group whose funding and US mortgage exposure could not survive the freeze in wholesale markets after Lehman Brothers collapsed. The Dutch state injected €10 billion of core Tier 1 securities on 19 October 2008, one of the first big European rescues of the crisis.

The problem was structural rather than a single rogue bet. ING had combined a Dutch universal bank, a global insurer and ING Direct, a branchless savings bank that had gathered deposits across the United States, Canada, Germany, Spain, Italy, Australia and the United Kingdom. ING Direct USA had invested a large part of its deposits in US mortgage-backed securities, including a portfolio of Alt-A loans that lost value rapidly through 2008. When interbank lending stopped, a group that had looked overcapitalised on paper suddenly needed a buffer the market would not provide.

The Dutch rescue came in two parts. The October 2008 injection of €10 billion carried an 8.5 per cent coupon and a repayment premium that made early redemption expensive. In January 2009 the state added a so-called illiquid-assets back-up facility covering 80 per cent of a €27.7 billion Alt-A portfolio, which shifted most of the credit risk to the taxpayer. ING also used the Dutch guarantee scheme to issue state-backed bonds. The combined package is why the group’s rehabilitation took six years rather than two.

Repayment was deliberately staggered. ING paid back €5 billion in December 2009, further tranches in 2011 and 2012, and the final €1.03 billion, consisting of €683 million of principal and €342 million of interest and premium, on 7 November 2014. By then the state had received €10 billion of principal plus about €3.5 billion in interest and premiums, a return the finance ministry presented as a profit on the rescue. The settlement of the back-up facility in 2013 and 2014 closed the last open account. For a comparison with the bank that was nationalised outright, see the ABN AMRO reprivatisation story, where the state’s exit took far longer and recovered its money far more slowly.

How did the European Commission force ING to split itself up?

The European Commission approved the Dutch aid in November 2009 only on condition that ING shrink its balance sheet by about 45 per cent and divest its entire insurance and investment-management operations, ING Direct USA and a carved-out Dutch retail bank. In practice the Commission dismantled the bancassurance model ING had built since the 1991 merger of Nationale-Nederlanden and NMB Postbank.

Competition commissioner Neelie Kroes, herself Dutch, treated the ING case as a template for how state aid should be policed. The restructuring plan also imposed a ban on acquisitions and a “price leadership ban” that prevented ING from offering the cheapest savings or mortgage rates in several markets. ING counted 31 divestments between late 2008 and 2010, and sold a further 14 smaller stakes afterwards. The bank fought parts of the decision at the EU’s General Court and won a partial victory in 2012, but the main obligations stood.

The two biggest disposals reshaped the group. ING Direct USA, with about $80 billion of deposits, was sold to Capital One in 2012 for roughly $9 billion in cash and stock. The European insurance and asset-management business was floated on Euronext Amsterdam as NN Group in July 2014, and ING sold down its stake over the following two years; the US insurer became Voya Financial. The carve-out of a Dutch retail bank, the so-called WUB or Westland Utrecht unit, proved hard to execute and was eventually resolved through a smaller divestment and a commitment on pricing.

What remained was a bank with a simpler story: retail deposits in a dozen countries, a wholesale bank serving multinationals and a Dutch and Belgian home market. That simplification turned out to be the foundation of the later digital strategy, because a group without insurance subsidiaries and without a US balance sheet could concentrate its technology budget on one retail platform.

What was the money-laundering case that followed Ralph Hamers?

ING paid €775 million in September 2018 to settle a Dutch criminal investigation into years of failures in customer due diligence and transaction monitoring, and the case then pursued its former chief executive personally for six years. The settlement consisted of a €675 million fine and €100 million of disgorged profit, the largest such payment in Dutch history at the time.

Prosecutors found that between 2010 and 2016 ING Netherlands had allowed customers to launder hundreds of millions of euros through accounts that were opened without adequate checks, and that alerts generated by its monitoring systems were often not investigated. The settlement document described structural shortcomings rather than a single scandal, which is why it embarrassed a bank that had just finished repaying the state. Chief financial officer Koos Timmermans left shortly after the announcement; Hamers, chief executive since 2013, stayed and moved to UBS in 2020.

The affair did not end with the cheque. Financial activist Pieter Lakeman challenged the decision not to prosecute Hamers, and in December 2020 the Hague Court of Appeal ordered the Public Prosecution Service to investigate and prosecute him. Four years later, on 18 December 2024, the prosecutors concluded that there was insufficient legally convincing evidence to prove his personal criminal liability, even though an internal audit and a warning from the head of legal had flagged the gaps earlier. Hamers called the decision logical and correct; Lakeman said he would keep arguing before the appeals court.

For the Dutch banking sector the case set a pattern. ABN AMRO settled for €480 million in 2021 and Rabobank refused a settlement and is being prosecuted. For ING it added a layer of compliance cost that is still visible in the expense line, and it entrenched the principle that senior executives can face personal scrutiny for control failures.

How did Steven van Rijswijk turn ING into a digital lender?

Steven van Rijswijk, chief risk officer since 2017 and chief executive since July 2020, inherited a strategy of “one bank, one platform” and narrowed it into something more disciplined: grow mobile-primary customers, sell them investment products and mortgages, and run wholesale banking for returns rather than size. The bank now calls it “Growing the difference”.

The core metric is the mobile-primary customer, defined as someone who logs in through the app more than once a month and uses ING for a salary or main current account. ING ended 2025 with nearly 41 million customers, of whom 15.4 million were mobile-primary, up more than one million in the year, and added a further 377,000 in the second quarter of 2026 alone. Those customers generate the deposits that fund €57 billion of net core lending growth in 2025 and the fee income that rose 15 per cent to €4.6 billion.

The second pillar is investment products. Assets under management and e-brokerage volumes reached €278 billion at the end of 2025, up 16 per cent, and €322 billion by mid-2026, helped by the consolidation of the Polish asset manager Goldman Sachs TFI. The bank added 110,000 active investment customers in the second quarter of 2026, with the strongest growth in Germany. Fee income is the lever management uses to reduce dependence on interest rates, and the 2027 target of more than €5 billion in fees depends on it.

The third pillar is a wholesale bank that is now explicitly managed for capital efficiency. ING completed two significant risk-transfer transactions in 2025 and another in 2026 that freed about €1 billion of risk-weighted assets, allowing wholesale lending to grow 6 per cent annualised in the second quarter of 2026 without eating into the 13 per cent CET1 target. Risk costs stayed below the through-the-cycle average at 19 basis points for 2025 and 15 basis points in the second quarter of 2026.

What did ING’s 2025 results and 2026 outlook actually show?

ING’s 2025 results showed a bank whose profit was flat but whose mix was improving: net result of €6,327 million against €6,392 million in 2024, with lower net interest income offset by a 15 per cent jump in fees and record customer growth. The fourth-quarter profit before tax of €2,095 million was up 18 per cent year on year.

Total income rose 1.9 per cent to €23,035 million. Net interest income fell 2.3 per cent to €14,681 million as deposit margins normalised after the 2023 and 2024 rate peak, but commercial net interest income held at €15.3 billion. Operating expenses grew 3.8 per cent to €12,583 million, at the low end of guidance, and risk costs of 19 basis points remained below the through-the-cycle average. Return on equity was 13.2 per cent and the CET1 ratio ended the year at 13.1 per cent, close to the roughly 13 per cent level the bank treats as its operating target.

The distribution record is the part investors watch most closely. For 2025 ING paid a total cash dividend of €3.2 billion, including a final dividend of €0.736 per share, an additional €0.5 billion cash distribution in January 2026 and €3.1 billion of share buybacks announced in May and October 2025. A further €1.0 billion buyback was announced on 30 April 2026. The logic is mechanical: ING targets a CET1 ratio of about 13 per cent, and capital above that line, after funding growth, is returned.

The 2026 outlook given in January was total income of about €24 billion, fee growth of 5 to 10 per cent, expenses of €12.6 to €12.8 billion and return on tangible equity above 14 per cent; the 2027 targets were lifted to income above €25 billion, fees above €5 billion and ROTE above 15 per cent. The second quarter of 2026 then beat that trajectory: net result of €1,947 million, profit before tax up 23 per cent year on year, fee income of €1,278 million up 14 per cent, ROTE of 17.0 per cent in the quarter and 14.5 per cent on a four-quarter basis, and a rolled-forward target of ROTE above 15 per cent for 2026 and above 16 per cent for 2027.

Why are Germany and Australia the growth engines rather than the Netherlands?

Germany and Australia matter because they are the two large markets where ING operates almost entirely without branches, which gives it the lowest cost base among the top banks in each country and room to add customers without adding buildings. The Netherlands remains the biggest profit centre, but it is a mature market with a 2025 retail profit before tax of €2,773 million that grows slowly.

ING Germany, the former ING-DiBa, is the group’s largest foreign retail business and is already the third-largest retail bank in Germany by customers. Its retail profit before tax was €1,457 million in 2025. Mortgages drove fourth-quarter lending growth of €1.7 billion and the bank reported above-average German contributions to mortgage and investment-product growth in the second quarter of 2026. Van Rijswijk told Handelsblatt in September 2026 that ING sees room to broaden its German offer in wealth management, investment-product distribution and services for the self-employed and the Mittelstand, where its presence is still thin.

Australia is a smaller but structurally similar story. ING Australia, which began as ING Direct in 1999, is the country’s largest bank outside the big four by retail customers and is run entirely through the OneApp platform; in the fourth quarter of 2025 it launched a generative-AI customer chatbot and a green-upgrade loan for mid-sized companies, and mortgage growth continued in 2026. Spain, Italy and Poland follow the same template: the group’s “Retail Other” segment reported strong customer growth and deposit inflows in Spain, mortgage growth in Italy and the full consolidation of TFI in Poland.

The home market is where ING makes its money but also where it faces the most pressure. Dutch politicians have debated higher bank taxes and savings-rate transparency, and the Dutch market is contested by ABN AMRO, Rabobank and the fintech lenders profiled in the Mollie, Bird and Picnic scale-up story. The Belgian unit remains the laggard, with a 2025 retail profit before tax of €644 million and a multi-year restructuring that cost €29 million in the fourth quarter alone.

Is ING now a buyer in European bank consolidation?

ING has returned to small, capability-driven acquisitions after more than a decade of being barred from them, and its chief executive has said the group wants to be a buyer rather than a target if larger consolidation comes. The deals so far are modest and focused on fee income.

The first visible move was the purchase of a stake of just over 20 per cent in Van Lanschot Kempen in early 2025, the Dutch wealth manager; an approach for the whole company was rebuffed in April 2025. In Poland, ING Bank Śląski agreed to buy the remaining stake in Goldman Sachs TFI, completing the deal in the first half of 2026 and taking the asset manager fully onto the balance sheet. In July 2026 ING announced a strategic investment of 40 per cent in Singular Bank, a Spanish wealth manager with about €19 billion under management, buying out Warburg Pincus and becoming the largest shareholder, with closing expected in the first quarter of 2027. Spanish media reported the full-company valuation at around €200 million; ING has not confirmed a price.

The pattern is deliberate: none of these transactions disturbs the 13 per cent CET1 target, and all of them add fee-generating private banking and asset management to a bank that still earns about two-thirds of its income from interest. Van Rijswijk was explicit in September 2026 that the strategy remains organic growth with add-on deals for capabilities, products or customer segments, and that realistic cross-border options in Europe are limited. ING was also reported in June 2026 among possible bidders for a stake in Belgium’s Belfius, which would be a larger step.

Russia is the one exit that has not worked. ING agreed in January 2025 to sell ING Bank (Eurasia) to Global Development JSC, but in April 2026 abandoned the deal because there was no realistic prospect of the buyer obtaining regulatory approvals. The bank still intends to leave the market; the financial impact of any alternative route is expected to be about 7 basis points of CET1, and offshore exposure to Russian clients had already fallen almost 90 per cent to about €600 million by the end of 2025.

What risks could derail the ING model?

The main risk to ING is that the forces that produced record profits in 2023 to 2025, high deposit margins and benign credit, reverse at the same time as competition for digital customers intensifies. The bank’s own numbers show net interest income already falling in 2025 while expenses rose.

The interest-rate exposure is the most quantifiable. Net interest income dropped 2.3 per cent in 2025 even as lending grew 8 per cent, because the margin ING earns on deposits narrowed as the ECB cut rates. Management expects fees and volume growth to fill the gap, and the 2026 guidance of about €24 billion of total income assumes they do. If the ECB’s 2026 tightening cycle reverses or deposit competition in Germany and Spain forces higher savings rates, the fee engine would have to carry more weight than it ever has.

Credit risk is unusually concentrated in two places: Dutch mortgages, which are protected by a national shortage of homes described in the Dutch housing shortage story, and a wholesale book exposed to energy, commodities and shipping. Risk costs of 15 to 20 basis points are low by European standards, and a single large corporate failure could double them. Geopolitical risk is also live: the bank still carries a Russian subsidiary it has failed to sell, and its wholesale bank finances trade flows through the Middle East and Asia.

The reputational risk is compliance. ING’s 2018 settlement obliged it to build a large financial-crime operation, and the Dutch prosecutors’ pursuit of Rabobank and their six-year examination of Hamers show that enforcement has become more personal and less predictable. A repeat failure would cost more than money.

How does ING compare with its Dutch rivals?

ING is larger, more international and more profitable on a return basis than either ABN AMRO or Rabobank, but it also carries the thinnest capital buffer of the three. ING’s 2025 net result of €6.3 billion compares with about €2.3 billion at ABN AMRO and €5.0 billion at Rabobank.

The differences in return reflect strategy. ING’s 13.2 per cent return on equity for 2025 sits above ABN AMRO’s 8.7 per cent and Rabobank’s 9.1 per cent because ING operates in more fast-growing markets, has a lower cost-to-income ratio in its digital-only countries and has spent fifteen years pruning low-return businesses. ABN AMRO is only now executing a cost programme that removes 5,200 full-time positions by 2028, and Rabobank’s cooperative structure means it retains profit rather than returning it, which is why its CET1 ratio of 20.3 per cent is far above ING’s 13.1 per cent.

The three banks share a home market with a 21 to 22 per cent mortgage share each for ABN AMRO and Rabobank and a comparable position for ING, and they share a regulator, De Nederlandsche Bank, whose anti-money-laundering enforcement has touched all of them. Where ING stands apart is distribution: no Dutch peer has anything like its 15 million mobile-primary customers across Germany, Spain, Poland, Italy, Australia and Turkey.

The comparison also shows what ING gave up. ABN AMRO and Rabobank still own large domestic franchises in private banking, SME lending and agriculture; ING’s Dutch retail bank is strong but its growth comes from elsewhere. That is a direct legacy of the 2009 European Commission decision, and it has turned out to be an advantage.

What can founders and investors learn from ING?

The most useful lesson from ING is that a forced simplification can become the strategy, provided management then concentrates investment on the one platform that remains. ING did not choose to lose its insurer and its US bank, but it chose to use the proceeds and the attention to build a single retail technology stack.

The second lesson is about metrics. ING’s reporting is organised around a handful of operating numbers, mobile-primary customers, net core lending and deposit growth, fee income and risk costs, that line up with its financial targets. Investors can follow the chain from customer growth to fee income to return on tangible equity, which is why the market has rewarded the bank for upgrading targets twice in 2026. Companies that report many metrics but tie none of them to capital allocation do not earn that trust.

The third lesson is that compliance failures outlast the people who caused them. The 2018 settlement was six years in the making and the examination of Hamers took six more; the costs ran through at least three chief executives. Founders scaling payments or lending businesses, including the Amsterdam fintech profiled in the Adyen story, inherit the same regulatory regime and should treat financial-crime controls as product infrastructure rather than overhead.

Finally, ING shows the value of a clear capital rule. A published CET1 target of about 13 per cent, with everything above it returned, removes the annual argument about what to do with profit. It also disciplines acquisitions: every deal must fit within the buffer, which is why ING’s purchases have been stakes and bolt-ons rather than transformational bets. Readers interested in how other national champions handle the same choice can compare the UK Company Stories hub.

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