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Ing Groep N.V. (ING)
:ING
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Risk Overview Q4, 2021
Risk Distribution
28% Finance & Corporate
26% Macro & Political
23% Legal & Regulatory
10% Production
8% Tech & Innovation
5% Ability to Sell
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
ING Groep Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q4, 2021
Main Risk Category
Finance & Corporate
With 11 Risks
Finance & Corporate
With 11 Risks
Number of Disclosed Risks
39
+6
From last reportS&P 500 Average: 31
39
+6
From last reportS&P 500 Average: 31
Recent Changes
7Risks added
1Risks removed
5Risks changed
Since Dec 2021
7Risks added
1Risks removed
5Risks changed
Since Dec 2021
Number of Risk Changed
5
-2
From last reportS&P 500 Average: 3
5
-2
From last reportS&P 500 Average: 3
See the risk highlights of ING Groep in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 39
Finance & Corporate
Total Risks: 11/39 (28%)Below Sector Average
Share Price & Shareholder Rights2 | 5.1%
Share Price & Shareholder Rights - Risk 1
Holders of ING shares may experience dilution of their holdings and may be impacted by any share buyback programme.Changed
Share Price & Shareholder Rights - Risk 2
Because we are incorporated under the laws of the Netherlands and many of the members ofour Supervisory and Executive Board and our officers reside outside of the United States, it maybe difficult to enforce judgments against ING or the members of our Supervisory and Executive Boards or our officers.Added
Most of our Supervisory Board members, our Executive Board members and some of the experts named in thisAnnual Report, as well as many of our officers are persons who are not residents of the United States, and mostof our and their assets are located outside the United States. As a result, investors may not be able to serveprocess on those persons within the United States or to enforce in the United States judgments obtained in UScourts against us or those persons based on the civil liability provisions of the US securities laws.Investors also may not be able to enforce judgments of US courts under the US federal securities laws in courtsoutside the United States, including the Netherlands. The United States and the Netherlands do not currentlyhave a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitrationawards) in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by anyfederal or state court in the United States based on civil liability, whether or not predicated solely upon the U.S.federal securities laws, would not be enforceable in the Netherlands unless the underlying claim is re-litigatedbefore a Dutch court. However, under current practice, the courts of the Netherlands may be expected to rendera judgment in accordance with the judgment of the relevant U.S. court, provided that such judgment (i) is a finaljudgment and has been rendered by a court which has established its jurisdiction on the basis of internationallyaccepted grounds of jurisdictions, (ii) has not been rendered in violation of elementary principles of fair trial, (iii)is not contrary to the public policy of the Netherlands, and (iv) is not incompatible with (a) a prior judgment of aNetherlands court rendered in a dispute between the same parties, or (b) a prior judgment of a foreign courtrendered in a dispute between the same parties, concerning the same subject matter and based on the samecause of action, provided that such prior judgment is not capable of being recognized in the Netherlands. It isuncertain whether this practice extends to default judgments as well.Based on the foregoing, there can be no assurance that U.S. investors will be able to enforce against us ormembers of our board of directors, officers or certain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil andcommercial matters, including judgments under the U.S. federal securities laws.In addition, there is doubt as to whether a Dutch court would impose civil liability on us, the members of ourboard of directors, our officers or certain experts named herein in an original action predicated solely upon theU.S. federal securities laws brought in a court of competent jurisdiction in the Netherlands against us or such members, officers or experts, respectively.
Accounting & Financial Operations2 | 5.1%
Accounting & Financial Operations - Risk 1
Risks relating to our use of quantitative models or assumptions to model client behaviour for thepurposes of our market calculations may adversely impact our reputation or results.Accounting & Financial Operations - Risk 2
Ratings are important to our business for a number of reasons, and a downgrade or a potentialdowngrade in our credit ratings could have an adverse impact on our results and net results.Credit ratings represent the opinions of rating agencies regarding an entity’s ability to repay its indebtedness.Our credit ratings are important to our ability to raise capital and funding through the issuance of debt and to thecost of such financing. In the event of a downgrade, the cost of issuing debt will increase, having an adverseeffect on our net results. Certain institutional investors may also be obliged to withdraw their deposits from INGfollowing a downgrade, which could have an adverse effect on our liquidity. They can also have lower riskappetite for our debt notes, leading to lower purchases of (newly issued) debt notes. We have credit ratings fromS&P, Moody’s Investor Service and Fitch Ratings. Each of the rating agencies reviews its ratings and ratingmethodologies on a recurring basis and may decide on a downgrade at any time.As rating agencies continue to evaluate the financial services industry, it is possible that rating agencies willheighten the level of scrutiny that they apply to financial institutions, increase the frequency and scope of theircredit reviews, request additional information from the companies that they rate and potentially adjust upwardthe capital and other requirements employed in the rating agency models for maintenance of certain ratingslevels. It is possible that the outcome of any such review of us would have additional adverse ratingsconsequences, which could have a material adverse effect on our results and financial condition. We may need totake actions in response to changing standards or capital requirements set by any of the rating agencies, whichcould cause our business and operations to suffer. We cannot predict what additional actions rating agenciesmay take, or what actions we may take in response to the actions of rating agencies.Furthermore, ING Bank’s assets are risk-weighted. Downgrades of these assets could result in a higher risk-weighting, which may result in higher capital requirements. This may impact net earnings and the return oncapital, and may have an adverse impact on our competitive position.
Debt & Financing6 | 15.4%
Debt & Financing - Risk 1
The inability of counterparties to meet their financial obligations or our inability to fully enforceour rights against counterparties could have a material adverse effect on our results.Debt & Financing - Risk 2
We may incur losses due to failures of banks falling under the scope of state compensation schemesWhile prudential regulation is intended to minimize the risk of bank failures, in the event such a failure occurs,given our size, we may incur significant compensation payments to be made under the Dutch Deposit GuaranteeScheme (DGS), which we may be unable to recover from the bankrupt estate, and therefore the consequences ofany future failure of such a bank could be significant to ING. Such costs and the associated costs to be borne byus may have a material adverse effect on our results and financial condition. On the basis of the EU Directive ondeposit guarantee schemes, ING pays quarterly risk-weighted contributions into a DGS-fund. The DGS-fund is togrow to a target size of 0.8% of all deposits guaranteed under the DGS, which is expected to be reached in July2024. In case of failure of a Dutch bank, depositor compensation is paid from the DGS-fund. If the availablefinancial means of the fund are insufficient, Dutch banks, including ING, may be required pay to extraordinary ex-post contributions not exceeding 0.5% of their covered deposits per calendar year. In exceptional circumstancesand with the consent of the competent authority, higher contributions may be required. However, extraordinaryex-post contributions may be temporarily deferred if, and for so long as, they would jeopardise the solvency orliquidity of a bank. Depending on the size of the failed bank, the available financial means in the fund, and therequired additional financial means, the impact of the extraordinary ex-post contributions on ING may bematerial.Since 2015, the EU has been discussing the introduction of a pan-European deposit guarantee scheme (‘EDIS’),(partly) replacing or complementing national compensation schemes in two or three phases. Proposals containelements of (re)insurance, mutual lending and mutualisation of funds. The new model is intended to be ‘overallcost-neutral’. Discussions have continued in 2020, but it remains uncertain when EDIS will be introduced and, ifintroduced, what impact EDIS would have on ING’s business and operations.In February 2021, the European Commission issued a public consultation on the review of the bank crisismanagement and deposit insurance (CMDI) framework, with a focus on three EU legislative texts: the BankRecovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the DepositGuarantee Schemes Directive (DGSD). The anticipated revision of the CMDI framework is part of the debate onthe completion of the Banking Union and in particular its third and missing pillar EDIS. The consultation periodran until May 2021. It is uncertain when the next steps towards revision of the CMDI framework, including EDIS, can be expected.
Debt & Financing - Risk 3
Interest rate volatility and other interest rate changes may adversely affect our business, results and financial condition.Changes in prevailing interest rates may negatively affect our business, including the level of net interest revenuewe earn, and the levels of deposits and the demand for loans. A sustained increase in the inflation rate in ourprincipal markets may also negatively affect our business, results and financial condition. For example, asustained increase in the inflation rate may result in an increase in nominal market interest rates. A failure toaccurately anticipate higher inflation and factor it into our product pricing assumptions may result in mispricingof our products, which could materially and adversely impact our results. On the other hand, negative interestrates may negatively impact our net interest income, which may have an adverse impact on our profitability.A prolonged period of low interest rates, and in some situations negative interest rates, has resulted in, and maycontinue to result in:?lower earnings over time on investments, as reinvestments will earn lower rates;?increased prepayment or redemption of mortgages and fixed maturity securities in our investmentportfolios, as well as increased prepayments of corporate loans. This as borrowers seek to borrow atlower interest rates potentially combined with lower credit spreads. Consequently, we may be requiredto reinvest the proceeds into assets at lower interest rates;?lower profitability as the result of a decrease in the spread between client rates earned on assets andclient rates paid on savings, current account and other liabilities;?higher costs for certain derivative instruments that may be used to hedge certain of our product risks;?lower profitability since we may not be able to fully track the decline in interest rates in our savingsrates;?lower profitability since we may not always be entitled to impose surcharges to customers tocompensate for the decline in interest rates;?lower profitability since we may have to pay a higher premium for the defined contribution scheme inthe Netherlands for which the premium paid is dependent on interest rate developments and the DutchCentral Bank’s (“DNB’s”) methodology for determining the ultimate forward rate;?lower interest rates may cause asset margins to decrease thereby lowering our results. This may forexample be the consequence of increased competition for investments as result of the low rates,thereby driving margins down; and/or ?(depending on the position) a significant collateral posting requirement associated with our interest ratehedge programs, which could materially and adversely affect liquidity and our profitability. The foregoing impacts have been and may be further amplified in a negative interest rate environment, since wemay not be able to earn interest on our assets (including reserves). In addition, we have, and may continue to,earn negative interest on certain of our assets (including cash balances, loans and bonds), while still payingpositive interest or no interest to others to hold our liabilities, resulting in an adverse impact on our credit spreadand lowering of our net interest income. Furthermore, in the event that a negative interest rate environmentresults in ING’s depositors being forced to pay interest to ING to hold cash deposits, some depositors may chooseto withdraw their deposits rather than pay interest to ING, which would have an adverse effect on ourreputation, business, results and financial condition. For example, in March 2020, the U.S. Federal Reserve hascut the benchmark U.S. interest rate in response to the Covid-19 pandemic and related impacts on the economyand financial markets. On 1 July 2021, ING announced in the Netherlands that it will charge negative interest tocustomers on current and deposit accounts exceeding €100,000 (such negative interest rate will only apply to theamount by which the current or deposit account exceeds €100,000 ). Such declines in interest rates in the UnitedStates or other markets in which ING and its customers and counterparties operate may have a significantadverse effect on our business and operations.Alternatively, any period of rapidly increasing interest rates may result in:?a decrease in the demand for loans;?higher interest rates to be paid on customer deposits and on debt securities that we have issued or mayissue on the financial markets from time to time to finance our operations, which would increase ourinterest expenses and reduce our results;?higher interest rates which can lead to lower investments prices and reduce the revaluation reserves,thereby lowering IFRS equity and the capital ratios. Also the lower securities value leads to a loss ofliquidity generating capacity which needs to be compensated by attracting new liquidity generatingcapacity which reduces our results;?prepayment losses if prepayment rates are lower than expected or if interest rates increase too rapidlyto adjust the accompanying hedges; and/or?(depending on the position) a significant collateral posting requirement associated with our interest ratehedge program.The foregoing impacts grow in relevance following the U.S. Federal Reserve’s plan to wind down its bond-purchase stimulus program and to set the stage for a series of interest rate increases beginning in spring of 2022
Debt & Financing - Risk 4
As a holding company, ING Groep N.V. is dependent for liquidity on payments from itssubsidiaries, many of which are subject to regulatory and other restrictions on their ability to transact with affiliatesING Groep N.V. is a holding company and, therefore, depends on dividends, distributions and other paymentsfrom its subsidiaries to fund dividend payments to its shareholders and to fund all payments on its obligations,including debt service obligations. ING Groep N.V.’s ability to obtain funds to meet its obligations depends on legal and regulatory restrictionsapplicable to ING Groep N.V.’s subsidiaries. Many of ING Groep N.V.’s direct and indirect subsidiaries, includingcertain subsidiaries of ING Bank N.V., may be subject to laws that restrict dividend payments, as well asrequirements with respect to capital and liquidity levels. For example, certain local governments and regulatorshave taken steps and may take further steps to “ring fence” or impose minimum internal total loss-absorbingcapacity on the local affiliates of a foreign financial institution in order to protect clients and creditors of suchaffiliates in the event of financial difficulties involving such affiliates or the broader banking group. Increasedlocal regulation and supervision have therefore limited and may in the future further limit the ability to movecapital and liquidity among affiliated entities and between ING Groep N.V. and its direct and indirect subsidiaries,limit the flexibility to structure intercompany and external activities of ING as otherwise deemed mostoperationally efficient, and increase in the overall level of capital and liquidity required by ING on a consolidatedbasis.Lower earnings of a local entity may also reduce the ability of such local entity to make dividends anddistributions to ING Groep N.V. Other restrictions, such as restrictions on payments from subsidiaries orlimitations on the use of funds in client accounts, may also apply to distributions to ING Groep N.V. from itssubsidiaries. ING Groep N.V. has also in the past guaranteed and may in the future continue to guarantee the paymentobligations of some of its subsidiaries, including ING Bank N.V. Any such guarantees may require ING Groep N.V.to provide substantial funds or assets to its subsidiaries or the creditors or counterparties of these subsidiaries ata time when the guaranteed subsidiary is in need of liquidity to fund its own obligations.Finally, ING Groep N.V., as the resolution entity of ING, has an obligation to remove impediments to resolutionand to improve resolvability. Regulatory authorities have required and may continue to require ING to increase capital or liquidity levels at the level of the resolution entity or at particular subsidiaries. This may result in,among other things, the issuance of additional long-term debt issuance at the level of ING Groep N.V. orparticular subsidiaries
Debt & Financing - Risk 5
Discontinuation of USD LIBOR may negatively affect our business, results and financial conditionChanged
Changes to major interest rates benchmarks may negatively affect our business, including the level of net interestrevenue. Financial markets have historically relied on Interbank Offered Rates (‘IBORs’) benchmarks, such as theLondon Interbank Offered Rate (‘LIBOR’), the Euro Over Night Index Average (‘EONIA’) and the Euro InterbankOffered Rate (‘EURIBOR’). While some interest benchmarks have been reformed and will continue to exist, suchas EURIBOR, others such as EONIA and LIBOR have been or will be replaced by alternative rates. EONIA ceased tobe published on 3 January 2022, and is succeeded by €STR. All GBP, JPY, CHF and EUR LIBOR settings ceased on31 December 2021. ING has substantially completed the transition of contracts referencing these benchmarkrates and now offers the recommended alternative benchmark rates.The most commonly used USD LIBOR tenors will continue to be published until 30 June 2023 to support existingcontracts. However, the use of USD LIBOR for new contracts is no longer allowed from January 2022, with onlylimited exceptions.Public authorities have recognised that many contracts do not contain reference to alternative rates, orreference inappropriate alternatives, or cannot be renegotiated or amended prior to the cessation of therelevant benchmark. In response, the European Commission has implemented legislation that gives theCommission the power to replace critical benchmarks if their termination would significantly disrupt or otherwiseaffect the functioning of the financial markets in the EU. The EU has used these powers to put in place statutoryreplacement rates for EONIA and CHF LIBOR. The UK government has also granted additional powers to theFinancial Conduct Authority (FCA) to enable the temporary publication of a ‘synthetic‘ LIBOR using a differentmethodology and inputs. The FCA has used these powers to ensure the most commonly used GBP and JPYLIBOR settings continue to be available using a “synthetic” methodology for a limited time. The FCA has not yetdecided whether it will require the LIBOR benchmark administrator to publish synthetic USD LIBOR after June2023. On 6 April 2021, the State of New York passed legislation on benchmark replacement addressing certain contracts, securities and instruments governed by New York which involve interest rates or dividend ratesdetermined by the use of USD LIBOR without “fallback” rate provisions or with inadequate “fallback” rateprovisions. A U.S. federal version of such legislation (passed by the U.S. House of Representatives on 8 December2021) remains under consideration in the U.S. Senate. The discontinuation of USD LIBOR and related interest rate benchmarks could result in a number of risks for theGroup, its customers, and the financial services industry more widely. These risks include legal risks and costs inrelation to changes required to documentation for existing transactions. In addition to the heightened conductand operational risks, the process of adopting new reference rates may expose the Group to an increased level offinancial risk, such as potential earnings volatility resulting from contract modifications and changes in hedgeaccounting relationships. It is not possible to determine the full impact of the USD LIBOR transition on the Group. However, the experiencegained and solutions put in place for the other LIBOR rates, together with our investment in and ability to offer awide range of products using alternative rates, should help to limit any material adverse effect on our business,results and financial condition
Debt & Financing - Risk 6
We are subject to several other bank recovery and resolution regimes that include statutorywrite down and conversion as well as other powers, which remains subject to significant uncertainties as to scope and impact on us.We are subject to several recovery and resolution regimes, including the Single Resolution Mechanism (‘SRM’),the ‘Bank Recovery and Resolution Directive’ (‘BRRD’) as implemented in national legislation, and the Dutch‘Intervention Act’ (Wet bijzondere maatregelen financiële ondernemingen, as implemented in the DutchFinancial Supervision Act). The SRM applies to banks that are supervised by the ECB under the SSM, with the aimof ensuring an orderly resolution of failing banks at minimum costs for taxpayers and the real economy. TheBRRD establishes a common framework for the recovery and resolution for banks within the European Union,with the aim of providing supervisory authorities and resolution authorities with common tools and powers toaddress banking crises pre-emptively in order to safeguard financial stability and minimise taxpayers’ exposure tolosses. In addition, the Intervention Act confers wide-ranging powers to the Dutch Minister of Finance, including,among other things, in relation to shares and other securities issued by us or with our cooperation or otherclaims on us (including, without limitation, expropriation thereof) if there is a serious and immediate threat tothe stability of the financial system. Any application of statutory write-down and conversion or other powerswould not be expected to constitute an event of default under our securities entitling holders to seek repayment.If any of these powers were to be exercised in respect of ING, there could be a material adverse effect on bothING and on holders of ING securities, including through a material adverse effect on credit ratings and/or the price of our securities. Investors in our securities may lose their investment if resolution measures are takenunder current or future regimes.For further discussion of the impact of bank recovery and resolution regimes on ING, see “Item 4. Information onthe Company—Regulation and Supervision—Regulatory Developments—Bank Recovery and Resolution Directive.”
Corporate Activity and Growth1 | 2.6%
Corporate Activity and Growth - Risk 1
ING may be unable to meet internal or external aims or expectations with respect to ESG-related matters.Added
Macro & Political
Total Risks: 10/39 (26%)Above Sector Average
Economy & Political Environment4 | 10.3%
Economy & Political Environment - Risk 1
Continued risk of political instability and fiscal uncertainty in Europe and the United States, aswell as ongoing volatility in the financial markets and the economy generally have adverselyaffected, and may continue to adversely affect, our business, results and financial conditionAdded
Economy & Political Environment - Risk 2
The regulatory consequences of the United Kingdom’s withdrawal from the European Union mayhave adverse effects on our business, results and financial conditionOn 24 December 2020, the United Kingdom and the EU agreed to the EU-UK Trade and Cooperation Agreement(the “TCA”) in connection with the departure of the UK from the EU (commonly referred to as ‘Brexit’). However,the financial services provisions of the TCA are very limited and , as a result, UK-based financial services providerslost EU passporting rights as of 1 January 2021 and EU-UK financial services are now subject to unilateralequivalence decisions. EU and UK regulators have, however, taken certain measures to address overall financialstability risks, such as the temporary extension by the EU of equivalence recognition to UK-based centralcounterparties (UK CCPs) through to 30 June 2022. In November 2021 the European Commissioner for financialservices announced that the 30 June 2022 extension date will be further extended in early 2022, although theduration of the extension has not yet been specified. There is, however, no guarantee that such equivalencedecisions will be issued by the EU or the UK in the future, or that any further extensions or renewals of temporary equivalence decisions or similar transitional arrangements will be made by the EU or the UK in thefuture. The absence of such equivalence decisions for financial services could have a negative impact on ING’sactivities, with the absence of future UK CCPs recognition expected to increase costs for both ING and itsfinancial markets customers. In addition, Brexit has required and will require other changes to ING’s business andoperations, including requiring ING to obtain a third country branch banking license in the UK, which was grantedin November 2021. ING is also progressing the move of certain financial markets activities from London toAmsterdam in light of the ECB’s supervisory expectations on booking models as a result of Brexit. The regulatoryimpact of Brexit continues to present material risks and uncertainties, particularly as to how regulations maydiverge between the EU and the UK, which could materially increase ING’s compliance costs and have a materialadverse effect on ING’s business, results and financial condition.
Economy & Political Environment - Risk 3
Our revenues and earnings are affected by the volatility and strength of the economic, business,liquidity, funding and capital markets environments of the various geographic regions in whichwe conduct business, as well as by changes in customer behaviour in these regions, and anadverse change in any one region could have an impact on our business, results and financialcondition.Because ING is a multinational banking and financial services corporation, with a global presence and servingaround 38 million customers, corporate clients and financial institutions in over 40 countries, ING’s business,results and financial condition may be significantly impacted by turmoil and volatility in the worldwide financialmarkets or in the particular geographic areas in which we operate. In Retail Banking, our products includesavings, payments, investments, loans and mortgages in most of our Retail Banking markets. In WholesaleBanking, we provide specialised lending, tailored corporate finance, debt and equity market solutions, payments& cash management, trade and treasury services. As a result, negative developments in financial markets and/orcountries or regions in which we operate, have in the past had and may in the future have a material adverseimpact on our business, results and financial condition, including as a result of the potential consequences listedbelow.Factors such as interest rates, securities prices, credit spreads, liquidity spreads, exchange rates, consumerspending, changes in customer behaviour, climate change, business investment, real estate values and privateequity valuations, government spending, inflation or deflation, the volatility and strength of the capital markets,political events and trends, supply chain disruptions, shortages, terrorism, pandemics and epidemics (such asCovid-19, as described in greater detail below under the heading “– ING’s business, results and financialcondition have been, and likely will continue to be adversely affected by the Covid-19 pandemic”) or otherwidespread health emergencies all impact the business and economic environment and, ultimately, our solvency,liquidity and the amount and profitability of business we conduct in a specific geographic region. Certain of theserisks are often experienced globally as well as in specific geographic regions and are described in greater detailbelow under the headings “–Interest rate volatility and other interest rate changes may adversely affect ourbusiness, results and financial condition”, “–Inflation and deflation may negatively affect our business, resultsand financial condition”, “–Market conditions, including those observed over the past few years and theapplication of IFRS 9 may increase the risk of loans being impaired and have a negative effect on our results and inancial condition” and “–Continued risk of political instability and fiscal uncertainty in Europe and the UnitedStates, as well as ongoing volatility in the financial markets and the economy generally have adversely affected,and may continue to adversely affect, our business, results and financial condition”. All of these are factors inlocal and regional economies as well as in the global economy, and we may be affected by changes in any one ofthese factors in any one country or region, and more if more of these factors occur simultaneously and/or inmultiple countries or regions or on a global scale.In case one or more of the factors mentioned above adversely affects the profitability of our business, this mightalso result, among other things, in the following:?inadequate reserves or provisions, in relation to which losses could ultimately be realised through profitand loss and shareholders’ equity;?the write-down of tax assets impacting net results and/or equity;?impairment expenses related to goodwill and other intangible assets, impacting our net result andequity; and/or?movements in risk weighted assets for the determination of required capital.In particular, we are exposed to financial, economic, market and political conditions in the Benelux countries andGermany, from which we derive a significant portion of our revenues in both Retail Banking and WholesaleBanking, and which could present risks of economic downturn. Though less material, we also derive substantialrevenues in the following geographic regions: Turkey, Eastern Europe (primarily Poland among others), SouthernEurope (primarily Spain among others), East Asia (primarily Singapore among others) and Australia. In aneconomic downturn affecting some or all of these jurisdictions, we expect that higher unemployment, lowerfamily income, lower corporate earnings, higher corporate and private debt defaults, lower business investmentsand lower consumer spending would adversely affect the demand for banking products, and that ING may needto increase its reserves and provisions, each of which may result in overall lower earnings. The impact of theCovid-19 pandemic, as an example of an economic downturn, as well as the substantial monetary andgovernment measures, are still materialising and expected to continue to affect our business. For moreinformation, refer to the risk factor described under heading “–ING’s business, results and financial conditionhave been, and likely will continue to be adversely affected by the Covid-19 pandemic”. We also have wholesalebanking activities in both Russia and Ukraine, as well as investments in Russia, some of which are denominated inlocal currency. The impact on our business in Russia and Ukraine, as well as the potential regional and globaleconomic impact of the invasion of Ukraine and related international response measures, including sanctions,capital controls, restrictions on SWIFT access and restrictions on central bank activity, on our broader business,including spill-over risk to the entire wholesale banking portfolio (e.g. commodities financing, energy and utilitiesand energy-consuming clients), remain uncertain. Securities prices, real estate values and private equityvaluations may also be adversely impacted, and any such losses would be realised through profit and loss andshareholders’ equity. We also offer a number of financial products that expose us to risks associated withfluctuations in interest rates, securities prices, corporate and private default rates, the value of real estate assets,exchange rates and credit spreads.For further information on ING’s exposure to particular geographic areas, see Note 36 ‘Information ongeographic areas’ to the consolidated financial statements.
Economy & Political Environment - Risk 4
Inflation and deflation may negatively affect our business, results and financial conditionChanged
A sustained increase in the inflation rate in our principal markets could have multiple impacts on us and maynegatively affect our business, results and financial condition. For example, a sustained increase in the inflationrate may result in an increase in market interest rates, which may:?decrease the estimated fair value of certain fixed income securities that we hold in our investmentportfolios, resulting in:?reduced levels of unrealised capital gains available to us, which could negatively impact oursolvency position and net income, and/or?a decrease in collateral values,?result in increased withdrawal of certain savings products, particularly those with fixed rates belowmarket rates,?require us, as an issuer of securities, to pay higher interest rates on debt securities that we issue in thefinancial markets from time to time to finance our operations, which would increase our interestexpenses and reduce our results,?result in further customer defaults as interest rate rises flow through into payment stress for lowercredit quality customers.A significant and sustained increase in inflation has historically also been associated with decreased prices forequity securities and sluggish performance of equity markets generally. A sustained decline in equity marketsmay:?result in impairment charges to equity securities that we hold in our investment portfolios and reducedlevels of unrealised capital gains available to us which would reduce our net income, and?lower the value of our equity investments impacting our capital position.In addition, a failure to accurately anticipate higher inflation and factor it into our product pricing may result in asystemic mispricing of our products, which would negatively impact our results.On the other hand, deflation could be experienced in our principal markets adversely affecting our financialperformance. Deflation may erode collateral values and diminish the quality of loans and cause a decrease inborrowing levels, which would negatively affect our business and results.
Natural and Human Disruptions3 | 7.7%
Natural and Human Disruptions - Risk 1
ING’s business, results and financial condition have been, and likely will continue to be,adversely affected by the Covid-19 pandemic.Natural and Human Disruptions - Risk 2
ING’s business and operations are exposed to transition risks related to climate change.Added
he transition to a low carbon or net zero economy may give rise to risks and uncertainties associated withclimate change-related laws, regulations and oversight, changing or new technologies, and shifting customersentiment. For instance, ING may be required to change its lending portfolio to comply with new climate change-related regulations. As a result, it might be unable to lend to certain prospective customers, or might even lead tothe termination of certain existing relationships with certain customers. This could result in claims or legalchallenges from such customers against ING. This transition may also adversely impact the business andoperations of ING’s customers and other counterparties. If ING fails to adequately factor in such risks in itslending or other business decisions, ING could be exposed to losses.The low carbon or net zero transition may also require ING to modify or implement new compliance systems,internal controls and procedures or governance frameworks. The integration and automation of internalgovernance, compliance, and disclosure and reporting frameworks across ING could lead to increasedoperational costs for ING and other execution and operational risks. The implementation cost of these systemsmay especially be higher in the near term as ING seeks to adapt its business, or address overlapping, duplicativeor conflicting regulatory or other requirements in this fast-developing area. Furthermore, ING’s ongoingimplementation of appropriate systems, controls and frameworks increasingly requires ING to develop adequateclimate change-related risk assessment and modelling capabilities (as there is currently no standard approach ormethodology available), and to collect customer, third party or other data. There are significant risks anduncertainties inherent in the development of new risk modelling methodologies and the collection of data,potentially resulting in systems or frameworks that could be inadequate, inaccurate or susceptible to incorrectcustomer, third party or other data. Any delay or failure in developing, implementing or meeting ING’s climate change-related commitments andregulatory requirements may have a material adverse impact on our business, financial condition, operating results and reputation, and lead to climate change or ESG-related investigations, enforcement proceedings or litigation
Natural and Human Disruptions - Risk 3
ING’s business and operations are exposed to physical risks, including as a direct result of climate changeAdded
ING’s business and operations may be exposed to the impacts of physical risks arising from climate and weather-related events, including heatwaves, droughts, flooding, storms, rising sea levels, other extreme weather eventsor natural disasters, and to the impacts of physical risks arising from the environmental degradation, includingloss of biodiversity, water or resources scarcity, pollution or waste management. Such physical risks could disruptING’s business continuity and operations or impact ING’s premises or property portfolio, as well as its customers’property, business or other financial interests. These risks could potentially result in impairing asset values,financial losses, declining creditworthiness of customers and increased defaults, delinquencies, write-offs andimpairment charges in ING’s portfolio, etc. In particular, changing climate patterns resulting in more frequent andextreme weather events, such as the severe flooding that occurred in Western Europe in July 2021 or the long-lasting bushfires in Australia in February 2021, could lead to unexpected business interruptions or losses for ING or its customers. For a description of physical risks to our operations and business other than resulting from natural disasters as aresult of climate change, see “–Operational and IT risks, such as systems disruptions or failures, breaches ofsecurity, cyber attacks, human error, changes in operational practices, inadequate controls including in respect ofthird parties with which we do business or outbreaks of communicable diseases may adversely impact our reputation, business and results” above.
Capital Markets3 | 7.7%
Capital Markets - Risk 1
Market conditions, including those observed over the past few years, and the application of IFRS9 may increase the risk of loans being impaired and have a negative effect on our results and financial conditionCapital Markets - Risk 2
The default of a major market participant could disrupt the markets and may have an adverse effect on our business, results and financial conditionWithin the financial services industry, the severe distress or default of any one institution (including sovereignsand central counterparties (CCPs)) could lead to defaults by, or the severe distress of, other market participants.While prudential regulation may reduce the probability of a default by a major financial institution, the actualoccurrence of such a default could have a material adverse impact on ING. Such distress of, or default by, a majorfinancial institution could disrupt markets or clearance and settlement systems and lead to a chain of defaults byother financial institutions, since the commercial and financial soundness of many financial institutions may beclosely related as a result of credit, trading, clearing or other relationships. Also the perceived lack ofcreditworthiness of a sovereign or a major financial institution (or a default by any such entity) may lead tomarket-wide liquidity problems and losses or defaults by us or by other institutions. This risk is sometimesreferred to as ‘systemic risk’ and may adversely affect financial intermediaries, such as clearing agencies, clearinghouses, banks, securities firms and exchanges with whom we interact on a daily basis and financial instrumentsof sovereigns in which we invest. Systemic risk could impact ING directly, by exposing it to material credit losseson transactions with defaulting counterparties or indirectly by significantly reducing the available market liquidityon which ING and its lending customers depend to fund their operations and/or leading to a write down of loansor securities held by ING. In addition, ING may also be faced with additional open market risk for which hedgingor mitigation strategies may not be available or effective (either by hedges eliminated by defaultingcounterparties, or reduce market liquidity). Systemic risk could have a material adverse effect on our ability toraise new funding and on our business, results and financial condition. In addition, such distress or failure couldimpact future product sales as a potential result of reduced confidence in the financial services industry
Capital Markets - Risk 3
We depend on the capital and credit markets, as well as customer deposits, to provide theliquidity and capital required to fund our operations, and adverse conditions in the capital andcredit markets, or significant withdrawals of customer deposits, may impact our liquidity,borrowing and capital positions, as well as the cost of liquidity, borrowings and capital.Adverse capital market conditions have in the past affected, and may in the future affect, our cost of borrowedfunds and our ability to borrow on a secured and unsecured basis, thereby impacting our ability to supportand/or grow our businesses. Furthermore, although interest rates are at or near historically low levels, since therecent financial crisis, we have experienced increased funding costs due in part to the withdrawal of perceivedgovernment support of such institutions in the event of future financial crises. In addition, liquidity in thefinancial markets has also been negatively impacted as market participants and market practices and structuresadjust to new regulations.We need liquidity to fund new and recurring business, to pay our operating expenses, interest on our debt anddividends on our capital stock, maintain our securities lending activities and replace certain maturing liabilities.Without sufficient liquidity, we will be forced to curtail our operations and our business will suffer. The principalsources of our funding include a variety of short-and long-term instruments, including deposit fund, repurchaseagreements, commercial paper, medium- and long-term debt, subordinated debt securities, capital securities andshareholders’ equity.In addition, because we rely on customer deposits to fund our business and operations, the confidence ofcustomers in financial institutions may be tested in a manner that may adversely impact our liquidity and capitalposition. Consumer confidence in financial institutions may, for example, decrease due to our or our competitors’failure to communicate to customers the terms of, and the benefits to customers of, complex or high-feefinancial products. Reduced confidence could have an adverse effect on our liquidity and capital position throughwithdrawal of deposits, in addition to our revenues and results. Because a significant percentage of our customerdeposit base is originated via Internet banking, a loss of customer confidence may result in a rapid withdrawal of deposits over the Internet. In the event that our current resources do not satisfy our needs, we may need to seek additional financing. Theavailability of additional financing will depend on a variety of factors, such as market conditions, the generalavailability of credit, the volume of trading activities, the overall availability of credit to the financial servicesindustry, our credit ratings and credit capacity, as well as the possibility that customers or lenders could developa negative perception of our long- or short-term financial prospects. Also see under the heading “Ratings areimportant to our business for a number of reasons, and a downgrade or a potential downgrade in our creditratings could have an adverse impact on our results and net results”. Similarly, our access to funds may be limitedif regulatory authorities or rating agencies take negative actions against us. If our internal sources of liquidityprove to be insufficient, there is a risk that we may not be able to successfully obtain additional financing onfavourable terms, or at all. Any actions we might take to access financing may, in turn, cause rating agencies tore-evaluate our ratings.Disruptions, uncertainty or volatility in the capital and credit markets may also limit our access to capital. Suchmarket conditions may in the future limit our ability to raise additional capital to support business growth, or tocounterbalance the consequences of losses or increased regulatory capital and rating agency capitalrequirements. This could force us to (i) delay raising capital, (ii) reduce, cancel or postpone payment of dividendson our shares, (iii) reduce, cancel or postpone interest payments on our other securities, (iv) issue capital ofdifferent types or under different terms than we would otherwise, or (v) incur a higher cost of capital than in amore stable market environment. This would have the potential to decrease both our profitability and ourfinancial flexibility. Our results, financial condition, cash flows, regulatory capital and rating agency capitalposition could be materially adversely affected by disruptions in the financial markets.Furthermore, regulatory liquidity requirements in certain jurisdictions in which we operate are remain stringent,undermining our efforts to maintain centralised management of our liquidity. These developments may causetrapped pools of liquidity and capital, resulting in inefficiencies in the cost of managing our liquidity and solvency,and hinder our efforts to integrate our balance sheet. An example of such trapped liquidity includes ouroperations in Germany where German regulations impose separate liquidity requirements that restrict ING’sability to move a liquidity surplus out of the German subsidiary.
Legal & Regulatory
Total Risks: 9/39 (23%)Above Sector Average
Regulation6 | 15.4%
Regulation - Risk 1
We are subject to the regulatory supervision of the ECB and other regulators with extensive supervisory and investigatory powers.Regulation - Risk 2
Failure to meet minimum capital and other prudential regulatory requirements as applicable tous from time to time may have a material adverse effect on our business, results and financialcondition and on our ability to make payments on certain of our securities.ING is subject to a variety of regulations that require us to comply with minimum requirements for capital (ownfunds) and additional loss absorbing capacity, as well as for liquidity, and to comply with leverage restrictions. Inaddition, such capital, liquidity and leverage requirements and their application and interpretation may change.Any changes may require us to maintain more capital or to raise a different type of capital by disqualifyingexisting capital instruments from continued inclusion in regulatory capital, requiring replacement with newcapital instruments that meet the new criteria. Sometimes changes are introduced subject to a transitionalperiod during which the new requirements are being phased in, gradually progressing to a fully phased-in, orfully-loaded, application of the requirements. Any failure to comply with these requirements, or to adapt to changes in such requirements, may have a materialadverse effect on our business, results and financial condition, and may require us to seek additional capital.Failures to meet minimum capital or other prudential requirements may also result in ING being prohibited frommaking payments on certain of our securities. Because implementation phases and transposition into EU ornational regulation where required may often involve a lengthy period, the impact of changes in capital, liquidityand leverage regulations on our business, results and financial condition, and on our ability to make payments on certain of our securities, is often unclear For further discussion of the impact of minimum capital and other prudential regulatory requirements on ING,see “Item 4. Information on the Company—Regulation and Supervision—Regulatory Developments—Basel III andEuropean Union Standards as currently applied by ING Group.”
Regulation - Risk 3
Our US commodities and derivatives business is subject to CFTC and SEC regulation under the Dodd-Frank Act.Our affiliate ING Capital Markets LLC is registered with the Commodity Futures Trading Commission (“CFTC”) as aswap dealer and is subject to CFTC regulation of the off-exchange derivatives market pursuant to Title VII of theU.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Operating as a swap dealerrequires compliance with CFTC regulatory requirements, which may be burdensome, impose additionalcompliance costs and could adversely affect the profitability of this business, as well as exposing ING to the riskof non-compliance with these regulations.ING Capital Markets LLC is also registered with the SEC as a security-based swap dealer pursuant to Dodd-Frankand SEC regulations enacted thereunder effective 1 November 2021. While ING Capital Markets LLC, as asecurity-based swap dealer, is required to comply with SEC rules with respect to most of these requirements, SECrules have permitted an “Alternative Compliance Mechanism” that allows for compliance, subject to eligibilityrequirements, with CFTC capital and margin rules applying to swap dealers in lieu of SEC capital and margin rulesapplying to security-based swap dealers. ING Capital Markets LLC has elected to use the Alternative ComplianceMechanism. However, should ING Capital Markets LLC in the future be ineligible for the “Alternative ComplianceMechanism” it would be subject to SEC capital and margin security-based swap dealer rules instead of the CFTCcapital and margin security-based swap dealer rules. SEC registration may increase ING Capital Markets LLC’soperational costs as a result of compliance, margin, capital and other requirements, and result in a substantialportion or all of ING’s security-based swap activities with U.S. persons being conducted through ING CapitalMarkets LLC. These registration and related requirements may also reduce trading activity, reduce marketliquidity and increase volatility in the relevant markets.In addition, new position limits under Dodd-Frank applicable to the derivatives market generally for futurescontracts based on any of twenty-five commodity futures contracts on physical commodities, which to all marketparticipants, could limit ING’s position sizes in these futures contracts and similarly limit the ability ofcounterparties to utilize certain of our products to the extent hedging exemptions from the position limits areunavailable. In addition, position limits on swaps on the same physical commodities will become effective in January 2023, which could further limit the ability of ING and its counterparties to enter into such swaps. Suchregulation of the derivative markets and market participants will likely result in increased cost of hedging andother trading activities, both for ING and its customers, which could expose our business to greater risk and couldreduce the size and profitability of our customer business. The imposition of these regulatory restrictions andrequirements, could also result in reduced market liquidity, which could in turn increase market volatility and therisks and costs of hedging and other trading activities. Any of the foregoing factors, and any further regulatory developments with respect to commodities andderivatives, could have a material impact on our business, results and financial condition.For further discussion of the impact of regulation of commodities and derivatives on ING, see “Item 4.Information on the Company—Regulation and Supervision—Regulatory Developments—Dodd-Frank Act and other US Regulations.”
Regulation - Risk 4
We are subject to additional legal and regulatory risk in certain countries where we operate withless developed or predictable legal and regulatory frameworks.In certain countries in which we operate, judiciary and dispute resolution systems may be less effective. As aresult, in case of a breach of contract, we may have difficulties in making and enforcing claims against contractualcounterparties and, if claims are made against us, we might encounter difficulties in mounting a defence againstsuch allegations. If we become party to legal proceedings in a market with an insufficiently developed judicialsystem, it could have an adverse effect on our operations and net results.In addition, as a result of our operations in certain countries, we are subject to risks of possible nationalisation,expropriation, price controls, exchange controls and other restrictive government actions, as well as the outbreakof hostilities and or war, in these markets. In particular, we have wholesale banking activities in both Russia andUkraine, as well as investments in Russia, some of which are denominated in local currency, and othercounterparties located in Russia. Furthermore, the current economic environment in certain countries in which we operate may increase the likelihood for regulatory initiatives to enhance consumer protection or to protecthomeowners from foreclosures. Any such regulatory initiative could have an adverse impact on our ability toprotect our economic interest, for instance in the event of defaults on residential mortgages.
Regulation - Risk 5
Changes in laws and/or regulations governing financial services or financial institutions or theapplication of such laws and/or regulations may increase our operating costs and limit our activities.We are subject to detailed banking laws and financial regulation in the jurisdictions in which we conductbusiness. Regulation of the industries in which we operate is becoming increasingly more extensive and complex,while also attracting supervisory scrutiny. Compliance with applicable and new laws and regulations is resources-intensive, and may materially increase our operating costs. Moreover, these regulations intended to protect ourcustomers, markets and society as a whole and can limit our activities, among others, through stricter net capital, market conduct and transparency requirements and restrictions on the businesses in which we can operate orinvest.Our revenues and profitability and those of our industry have been and will continue to be impacted byrequirements relating to capital, additional loss-absorbing capacity, leverage, minimum liquidity and long-termfunding levels, requirements related to resolution and recovery planning, derivatives clearing and margin rulesand levels of regulatory oversight, as well as limitations on which and, if permitted, how certain business activities may be carried out by financial institutions.
Regulation - Risk 6
Non-compliance with laws and/or regulations concerning financial services or financialinstitutions, including with respect to financial economic crimes, could result in fines and otherliabilities, penalties or consequences for us, which could materially affect our business and reduce our profitabilityING has faced, and in the future may continue to face, the risk of consequences in connection with non-compliance with applicable laws and regulations. For additional information on legal proceedings, see Note 46‘Legal proceedings’ to the consolidated financial statements. There are a number of risks in areas whereapplicable regulations may be unclear, subject to multiple interpretations or under development, or whereregulations may conflict with one another, or where regulators revise their previous guidance or courts overturnprevious rulings, which could result in our failure to meet applicable standards. Regulators and other authoritieshave the power to bring administrative or judicial proceedings against us, which could result, among other things,in suspension or revocation of our licenses, cease and desist orders, fines, civil penalties, criminal penalties orother disciplinary action, which could materially harm our results and financial condition. If we fail to address, orappear to fail to address, any of these matters appropriately, our reputation could be harmed and we could besubject to additional legal risk, which could, in turn, increase the size and number of claims and damages broughtagainst us or subject us to enforcement actions, fines and penalties.Furthermore, as a financial institution, we are exposed to the risk of unintentional involvement in criminalactivity in connection with the commission of financial economic crimes, including with respect to moneylaundering and the funding of terrorist and other criminal activities. The failure or perceived failure by us tocomply with legal and regulatory requirements with respect to financial economic crimes may result in adversepublicity, claims and allegations, litigation and regulatory investigations and sanctions, which may have a materialadverse effect on our business, results, financial condition and/or prospects in any given period. For furtherdiscussion of the impact of litigation, enforcement proceedings, investigations or other regulatory actions withrespect to financial economic crimes, see “– We may be subject to litigation, enforcement proceedings,investigations or other regulatory actions, and adverse publicity” below.
Litigation & Legal Liabilities1 | 2.6%
Litigation & Legal Liabilities - Risk 1
We may be subject to litigation, enforcement proceedings, investigations or other regulatory actions, and adverse publicity.Taxation & Government Incentives2 | 5.1%
Taxation & Government Incentives - Risk 1
We are subject to different tax regulations in each of the jurisdictions where we conductbusiness, and are exposed to changes in tax laws, and risks of non-compliance with or proceedings or investigations with respect to, tax laws.Taxation & Government Incentives - Risk 2
We may be subject to withholding tax if we fail to comply with the Foreign Account TaxCompliance Act (“FATCA”) and other US withholding tax regulationsDue to the nature of its business, ING is subject to various provisions of US tax law. These include FATCA, whichrequires ING to provide certain information for the US Internal Revenue Service (“IRS”), and the QualifiedIntermediary (“QI”) requirements, which require withholding tax on certain US-source payments. Failure tocomply with FATCA and/or QI requirements and regulations could harm our reputation and could subject theGroup to enforcement actions, fines and penalties, which could have a material adverse effect on our business,reputation, revenues, results, financial condition and prospects. For further discussion of FATCA and QIrequirements with respect to ING, see “Item 4. Information on the Company—Regulation and Supervision—KYCRequirements.”
Production
Total Risks: 4/39 (10%)Above Sector Average
Manufacturing1 | 2.6%
Manufacturing - Risk 1
ING may be unable to adapt its products and services to meet changing customer behaviour and demand, including as a result of ESG-related matters.Added
Employment / Personnel2 | 5.1%
Employment / Personnel - Risk 1
We may incur further liabilities in respect of our defined benefit retirement plans if the value ofplan assets is not sufficient to cover potential obligations, including as a result of differencesbetween actual results and underlying actuarial assumptions and models.Employment / Personnel - Risk 2
An inability to retain or attract key personnel may affect our business and resultsING Group relies to a considerable extent on the quality of its senior management, such as members of theexecutive committee, and management in the jurisdictions which are material to ING’s business and operations.The success of ING Group’s operations is dependent, among other things, on its ability to attract and retain highlyqualified personnel. Competition for key personnel in most countries in which ING Group operates, and globallyfor senior management, is intense. ING Group’s ability to attract and retain key personnel, in senior managementand in particular areas such as technology and operational management, client relationship management,finance, risk and product development, is dependent on a number of factors, including prevailing marketconditions and compensation packages offered by companies competing for the same talent.The (increasing) restrictions on remuneration, plus the public and political scrutiny especially in the Netherlands,will continue to have an impact on existing ING Group remuneration policies and individual remunerationpackages for personnel. For example, under the EU’s amended Shareholder Rights Directive, known as ‘SRD II’,which came into effect on June 10, 2019, ING is required to hold a shareholder (binding) vote on ING’s ExecutiveBoard remuneration policy and Supervisory Board remuneration policy at least every four years. Furthermore theshareholders have an advisory vote on ING’s remuneration report annually. This may restrict our ability to offercompetitive compensation compared with companies (financial and/or non-financial) that are not subject to suchrestrictions and it could adversely affect ING Group’s ability to retain or attract key personnel, which, in turn, may affect our business and results.
Supply Chain1 | 2.6%
Supply Chain - Risk 1
We may be unable to manage our risks successfully through derivatives.Tech & Innovation
Total Risks: 3/39 (8%)Above Sector Average
Trade Secrets1 | 2.6%
Trade Secrets - Risk 1
We may not always be able to protect our intellectual property developed in our products andservices and may be subject to infringement claims, which could adversely impact our corebusiness, inhibit efforts to monetize our internal innovations and restrict our ability to capitalize on future opportunitiesAdded
Cyber Security1 | 2.6%
Cyber Security - Risk 1
We are subject to increasing risks related to cybercrime and compliance with cyber security regulationTechnology1 | 2.6%
Technology - Risk 1
Operational and IT risks, such as systems disruptions or failures, breaches of security, cyberattacks, human error, changes in operational practices, inadequate controls including in respectof third parties with which we do business or outbreaks of communicable diseases may adversely impact our reputation, business and resultsChanged
Ability to Sell
Total Risks: 2/39 (5%)Below Sector Average
Competition1 | 2.6%
Competition - Risk 1
Because we operate in highly competitive markets, including our home market, we may not beable to increase or maintain our market share, which may have an adverse effect on our resultsSales & Marketing1 | 2.6%
Sales & Marketing - Risk 1
ING is exposed to the risk of claims from customers or stakeholders who feel misled or treated unfairly because of advice or information received.Changed
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.