Company: INGVF
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001628280-25-010764
Chunk: 7

Company: ING GROEP NV
Filing Date: 2025-03-06
Form: 20-F
Item: Item 3
Chunk 7
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 markets from time to time to finance our operations, which would increase our interest expenses and reduce our results;
•experience further customer defaults as interest rate rises flow through into payment stress for lower credit quality customers.
On the other hand, a decrease in prevailing interest rates may lead to lower interest income from loans and investments, reduced profitability of traditional banking activities, and potential declines in the value of 

ING Group Annual Report 2024 on Form 20-F 

Contents       Part I         Part II        Part III       Additional information        Financial statements    
certain fixed income securities we hold in our investment portfolio, as well as negatively affecting our business in other ways, including leading to:
•lower interest rates, which can compress the net interest income margins because of a potential reduction in the interest income earned from loans;
•lower earnings over time on investments, as reinvestments will earn lower rates;
•increased prepayment or redemption of mortgages and fixed maturity securities in our investment portfolios, as well as increased prepayments of corporate loans. This as borrowers seek to borrow at lower interest rates potentially combined with lower credit spreads. Consequently, we may be required to 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 and client 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 savings rates;
•lower profitability since we may not always be entitled to impose surcharges to customers to compensate for the decline in interest rates;
•lower profitability since we may have to pay a higher premium for the defined contribution scheme in the Netherlands for which the premium paid is dependent on interest rate developments and the Dutch Central Bank’s (DNB) methodology for determining the ultimate forward rate;
•lower interest rates that may cause asset margins to decrease, thereby lowering our results. This may, for example, 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 rate hedge programs, which could materially and adversely affect liquidity and our profitability.
In addition, given the volatility in inflation and related volatility in interest rates, a failure to accurately anticipate inflation on an ongoing basis and factor it into our product pricing assumptions may result in the mispricing of our products, which could materially and adversely