Legal proceedings

12 Months Ended

Dec. 31, 2023

Legal proceedings [Abstract]

Legal proceedings

42  Legal proceedings

ING Group and its consolidated subsidiaries are involved in governmental, regulatory, arbitration and legal

proceedings and investigations in the Netherlands and in a number of foreign jurisdictions, including the

U.S., involving claims by and against them which arise in the ordinary course of their businesses, including in

connection with their activities as lenders, broker-dealers, underwriters, issuers of securities and investors

and their position as employers and taxpayers. In certain of such proceedings, very large or indeterminate

amounts are sought, including punitive and other damages. While it is not feasible to predict or determine

the ultimate outcome of all pending or threatened governmental, regulatory, arbitration and legal

proceedings and investigations, ING is of the opinion that some of the proceedings and investigations set

out below may have or have in the recent past had a significant effect on the financial position, profitability

or reputation of the ING and/or the ING and its consolidated subsidiaries.

Settlement agreement: On 4 September 2018, ING announced that it had entered into a settlement

agreement with the Dutch Public Prosecution Service relating to previously disclosed investigations

regarding various requirements for client on-boarding and the prevention of money laundering and corrupt

practices. Following the entry into the settlement agreement, ING has experienced heightened scrutiny

from authorities in various countries. ING is also aware, including as a result of media reports, that other

parties may, among other things, seek to commence legal proceedings against ING in connection with the

subject matter of the settlement. Certain parties filed requests with the Court of Appeal in The Netherlands

to reconsider the prosecutor’s decision to enter into the settlement agreement with ING and not to

prosecute ING or (former) ING employees. In December 2020, the Court of Appeal issued its final ruling. In

this ruling the prosecutors' decision to enter into the settlement agreement with ING was upheld, making

the settlement final. However, in a separate ruling, the Court ordered the prosecution of ING’s former CEO.

Litigation by investors: In February 2024, ING and certain (former) board members were served with a writ

of summons for litigation in The Netherlands on behalf of investors who claim to have suffered financial

losses in connection with ING's disclosures on historic shortcomings in its financial economic crime policies,

related risk management and control systems, the investigation by and settlement with the Dutch

authorities in 2018 and related risks for ING. We do not agree with the allegations and will defend ourselves

against these and the claimed damages of around EUR 500 million. We follow IFRS rules for taking legal

provisions and would disclose material amounts in that regard if and when applicable - which currently is

not the case.

Findings regarding AML processes: As previously disclosed, after its September 2018 settlement with Dutch

authorities concerning anti-money laundering matters, and in the context of significantly increased

attention on the prevention of financial economic crime, ING has experienced heightened scrutiny by

authorities in various countries. The interactions with such regulatory and judicial authorities have included,

and can be expected to continue to include, onsite visits, information requests, investigations and other

enquiries. Such interactions, as well as ING’s internal assessments in connection with its global

enhancement programme, have in some cases resulted in satisfactory outcomes, and also have resulted in,

and may continue to result in, findings, or other conclusions which may require appropriate remedial

actions by ING, or may have other consequences. ING intends to continue to work in close cooperation with

authorities as it seeks to improve its management of non-financial risks in terms of policies, tooling,

monitoring, governance, knowledge and behaviour.

In January 2022, a Luxembourg investigating judge informed ING Luxembourg that he intends to instruct

the relevant prosecutor to prepare a criminal indictment regarding alleged shortcomings in the AML process

at ING Luxembourg. Although this matter still remains at an early procedural stage and it is currently not

possible to determine how this matter will be resolved or the timing of any such resolution, ING does not

expect a financial outcome of this matter to have a material effect.

ING's subsidiary Payvision is the subject of a criminal investigation by Dutch authorities regarding money

laundering and various requirements of the Dutch act on Anti-Money Laundering and Counter Terrorist

Financing, focusing on the period from 1 January 2015 up to and including April 2020. Payvision is

cooperating with such ongoing investigation. In October 2021, the phasing out of Payvision was announced.

The phasing out of activities and the transfer of customers to a new service provider were completed in

2022. At the request of Payvision, its license has been withdrawn. It is currently not feasible to determine

how the ongoing investigation may be resolved or the timing of any such resolution, nor to estimate reliably

the possible timing, scope or amounts of any resulting fines, penalties and/or other outcome.

ING continues to take steps to enhance its management of compliance risks and embed stronger awareness

across the whole organisation. These steps are part of the global KYC programme and set of initiatives,

which includes enhancing KYC files and working on various structural improvements in compliance policies,

tooling, monitoring, governance, knowledge and behaviour.

Tax cases: Because of the geographic spread of its business, ING may be subject to tax audits, investigations

and procedures in numerous jurisdictions at any point in time. Although the Issuer believes that it has

adequately provided for all its tax positions, the ultimate resolution of these audits, investigations and

procedures is uncertain and may result in liabilities which are materially different from the amounts

recognised.

Litigation regarding products of a former subsidiary in Mexico: Proceedings in which ING is involved include

complaints and lawsuits concerning the performance of certain interest sensitive products that were sold by

a former subsidiary of ING in Mexico.

Claims regarding accounts with predecessors of ING Bank Türkiye: ING Bank Türkiye has received

numerous claims from (former) customers of legal predecessors of ING Bank Türkiye. The claims are based

on offshore accounts held with these banks, which banks were seized by the Savings Deposit Insurance Fund

(“SDIF”) prior to the acquisition of ING Bank Türkiye in 2007 from OYAK. Pursuant to the acquisition contract,

ING can claim compensation from SDIF if a court orders ING to pay amounts to the offshore account holders.

SDIF has made payments to ING pursuant to such compensation requests, but filed various lawsuits to

receive those amounts back. These lawsuits are ongoing in favour of ING Bank Türkiye. In April 2022 the

Turkish Supreme Court decided that the prescription period for the offshore account holders’ compensation

claims starts on the transfer date of the account holders to the offshore accounts. The exact impact of this

decision on the ongoing cases is not clear yet. At this moment it is not possible to assess the outcome of

these procedures nor to provide an estimate of the (potential) financial effect of these claims.

Interest rate derivatives claims: In the past a uniform recovery framework for Dutch SME clients with

interest rate derivatives was established by a committee of independent experts appointed by the Dutch

Ministry of Finance. In the context of this recovery framework most claims have been settled, however ING is

still involved in several legal proceedings in the Netherlands with respect to interest rate derivatives that

were sold to clients in connection with floating interest rate loans in order to hedge the interest rate risk of

the loans. These proceedings are based on several legal grounds, depending on the facts and circumstances

of each specific case, inter alia alleged breach of duty of care, insufficient information provided to the clients

on the product and its risks and other elements related to the interest rate derivatives that were sold to

clients. In some cases, the court has ruled in favour of the claimants and awarded damages, annulled the

interest rate derivative or ordered repayment of certain amounts to the claimants.

Interest surcharges claims: ING received complaints and was involved in litigation with certain individuals in

the Netherlands regarding increases in interest surcharges with respect to several credit products, including

but not limited to commercial property. ING has reviewed the relevant product portfolio. The provision

previously taken has been reversed for certain of these complaints. All claims are dealt with individually.

Thus far, the courts have ruled in favour of ING in each case, ruling that ING was allowed to increase the

interest surcharge based upon the essential obligations in the contract. In a relevant case the Dutch

Supreme Court ruled in favor of another Dutch bank, addressing the question whether or not a bank is

allowed to increase interest surcharges unilaterally. The Supreme Court ruled affirmatively and referred the

case to the Court of Appeal in The Hague. The Court of Appeal also ruled in favour of the Dutch bank in

October 2022 and this ruling has been confirmed by the Supreme Court in its ruling of 22 December 2023.

ING will continue to deal with all claims individually. In the last pending case against ING, the Court of Appeal

dismissed all claims in its ruling of 9 January 2024. The time limit for lodging a cassation appeal at the

Supreme Court expires on 9 April 2024.

Mortgage expenses claims: ING Spain has received claims and is involved in procedures with customers

regarding reimbursement of expenses associated with the formalisation of mortgages. In most first instance

court proceedings the expense clause of the relevant mortgage contract has been declared null and ING

Spain has been ordered to reimburse all or part of the applicable expenses. Since 2018, the Spanish Supreme

Court and the European Court of Justice have issued rulings setting out which party should bear notary,

registration, agency, and stamp duty costs. In January 2021, the Spanish Supreme Court ruled that

valuation costs of mortgages, signed prior to 16 June 2019, the date the new mortgage law entered into

force, should be borne by the bank. Media attention for the statute of limitations applicable to the right to

claim reimbursement of costs resulted in an increased number of claims at the beginning of 2021. In June

2021, the Supreme Court published a press release informing of its decision to ask the European Court of

Justice for a preliminary ruling regarding the criteria that should be applied to determine the date from

which the action for claiming the reimbursement of mortgage expenses is considered to be expired. Two

other preliminary rulings that were submitted by Catalunya courts also related to the limitation period. In

January 2024, the European Court of Justice ruled on one of the complaints filed by the Catalunya Provincial

Court. The European Court of Justice determined that the limitation period for the judicial claim for

reimbursement of expenses cannot begin to run from a Supreme Court decision declaring the clause null

and void, nor from the moment of the payment of the expenses. The European Court of Justice indicated

that it is up to national case-law to determine the criterion that should be applied for the calculation of the

limitation period, so uncertainty remains until the Supreme Court unifies the case-law. Currently, ING is

reviewing the strategy in order to address the latest developments.

ING Spain was also included, together with other Spanish banks, in three class actions filed by customer

associations. In one of the class actions an agreement was reached with the association. In another class

action ING filed an appeal asking the Spanish Court of Appeal to determine that the ruling of the court of

first instance is only applicable to the consumers that were part of the case. The National Court has revoked

the ruling and declared that the consumers will not be able to initiate an action for compensation based on

the first instance ruling, as the claimant association intended. This last decision is not yet final, as it has

been appealed in the Supreme Court. A provision has been established in the past and has been adjusted

where appropriate.

Imtech claims: In the Netherlands, the trustees in the bankruptcy of Imtech N.V. (“Imtech”) claimed in

September 2018 from various financing parties, including ING, payment of what the security agent has

collected following bankruptcy or intends to collect, repayment of all that was repaid to the financing

parties, as well as compensation for the repayment of a bridge financing, provided by ING and another

bank. This matter was settled by all Imtech financiers, including ING, and the Imtech trustees in October

2023.

In January 2018, ING Bank received a claim from Stichting ImtechClaim.nl and Imtech Shareholders Action

Group B.V. on behalf of certain (former) shareholders of Imtech. Furthermore, in March 2018, ING Bank

received another claim on the same subject matter from the Dutch Association of Stockholders (Vereniging

van Effectenbezitters, “VEB”). In June 2022, VEB reiterated and further substantiated its claim in a letter to

ING. Each of the claimants allege inter alia that shareholders were misled by the prospectus of the rights

issues of Imtech in July 2013 and October 2014. ING Bank, being one of the underwriters of the rights issues,

is held liable by the claimants for the damages that investors in Imtech would have suffered. ING Bank

responded to the claimants denying any and all responsibility in relation to the allegations made in the

relevant letters. ING (and the other underwriting banks) received a tolling letter (stuitingsbrief) from

Stichting Imtechclaim.nl, Imtech Shareholders Action Group B.V. and individual shareholders in December

2022, in connection with the allegations made in their original claim letter of January 2018. At this moment

it is not possible to assess the outcome of these claims nor to provide an estimate of the (potential) effect of

these claims.

Claims regarding mortgage loans in Swiss franc in Poland: ING Poland is a defendant in several lawsuits

with retail customers who took out mortgage loans indexed to the Swiss franc. Such customers have alleged

that the mortgage loan contract contains abusive clauses. One element that the court is expected to

consider in determining whether such contracts contain abusive clauses is whether the rules to determine

the exchange rate used for the conversion of the loan from Polish zloty to Swiss franc are unambiguous and

verifiable. In December 2020, the Polish Financial Supervision Authority (PFSA) proposed that lenders offer

borrowers voluntary out-of-court settlements on foreign-currency mortgage disputes, with mortgages

indexed to Swiss franc serving as a reference point. In February 2021, ING Poland announced its support for

this initiative and in October 2021 began offering the settlements to the borrowers following the PFSA’s

proposal. The Polish Supreme Court was expected to provide further clarity on this topic in a ruling

scheduled for November 2021, however the court’s session on this matter was postponed and the date of

the next session has not yet been announced. In October 2022, a hearing of the European Court of Justice

("CJEU") was held inter alia on the question whether, after cancellation of a contract regarding a Swiss franc

loan by a court, banks may still charge interests for the amount borrowed under such loan prior to

cancellation.

On 15 June 2023, the CJEU issued a ruling. It ruled that under EU law when a loan agreement indexed to the

Swiss franc is declared null and void, banks cannot claim any remuneration (i.e. interest) for the duration the

principal amount was available to the customer. The customer, however, may assert claims against banks in

addition to reimbursement of interest and instalments previously paid to the bank. ING has recorded a

portfolio provision.

Certain Consumer Credit Products: In October 2021, ING announced that it would offer compensation to its

Dutch retail customers in connection with certain revolving consumer loans with variable interest rates that

allegedly did not sufficiently follow market rates. This announcement was made in response to several

rulings by the Dutch Institute for Financial Disputes (Kifid) regarding similar products at other banks. ING has

recognized a provision of EUR 180 million in 2021 for compensation and costs in connection with this

matter. On 22 December 2021, ING announced that it reached an agreement with the Dutch Consumers’

Association (Consumentenbond) on the compensation methodology for revolving credits. Based on a Kifid

ruling regarding similar products, ING has amended its previously announced compensation scheme by also

compensating interest on interest. In the third quarter of 2022, ING increased its provision for this matter by

EUR 75 million. In the fourth quarter of 2022, ING and the Dutch Consumers’ Association reached an

agreement on the compensation of customers who have had an overdraft facility or a revolving credit card

with a variable interest rate. ING has started compensating such customers in line with Kifid rulings about

revolving credits including ‘interest-on-interest’-effect in these cases. The compensation process is taking

more time than expected. Timelines for compensation vary depending on customer and product

segmentation and are dependent on the availability of data.

Climate litigation: In January 2024, Friends of the Earth Netherlands (Milieudefensie) announced that it

holds ING liable for alleged contribution to climate change and threatens to initiate legal proceedings

against ING. If necessary, we will defend our science-based climate approach in court.