This article first appeared on GuruFocus .
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Net Profit:Increased almost 30% year-on-year to $781 million.
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Return on Equity:Improved to 12.1%.
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Commercial Net Interest Income (NII):Increased 5% quarter-on-quarter; full-year 2026 guidance raised to around 6.8 billion.
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Fee Income:Reached a record level, up 2% quarter-on-quarter.
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Other Income:Improved strongly to $106 million.
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Operating Income:Increased 6% quarter-on-quarter.
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Costs:Full-year 2026 cost guidance lowered to around 5.5 billion.
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Cost-to-Income Ratio:56% year-to-date.
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Impairments:Low at 24 million; cost of risk of 4 basis points.
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Pro Forma CET1 Ratio:Strengthened to 15.9%.
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Client Assets:Grew by just over 25 billion in Q2.
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Client Deposits:Increased over 5 billion.
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Mortgage Volume:Increased by 1.7 billion with a market share of 18%.
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Interim Dividend:Set at $0.68 per share, based on 40% of year-to-date net profit.
Release Date: August 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net profit increased almost 30% year-on-year to $781 million, with return on equity improving to 12.1%.
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Commercial net interest income increased strongly, leading to a raised full-year 2026 guidance to around 6.8 billion.
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Fees reached a record high, driven by strong growth in client assets and another good quarter for clearing results.
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Cost reduction progress is ahead of schedule, with full-year 2026 cost guidance lowered to around 5.5 billion.
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Credit quality remained solid with limited impairments and a stable Stage 3 ratio at 2.1%.
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Pro forma CET1 ratio strengthened to 15.9%, supported by growth in capital-light businesses.
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Completed the NIBC acquisition, strengthening position in attractive client segments and adding capabilities that fit well with strategy.
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Wealth Management client assets grew by more than 7% this quarter, with $2.3 billion of core net new assets.
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Realized around $300 million of the $900 million savings target for 2028, with cumulative FTE reductions ahead of schedule.
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RWA optimizations totaled 9 billion since the Capital Market Day, including around 2 billion this quarter.
Negative Points
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Asset margins declined by two basis points due to a high share of government-backed capital-light mortgages in new production.
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The mortgage market is very competitive, and the bank remains disciplined rather than seeking to maintain market share at all costs.
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Inflation remains elevated with further upside risk to energy prices from the conflict in the Middle East.
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The Stage 3 coverage ratio declined to around 14%, reflecting de-risking and a greater share of mortgages in the total portfolio.
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The NIBC consolidation is expected to reduce the CET1 ratio by around 70-75 basis points next quarter.
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Cost guidance is subject to the outcome of collective labour agreement negotiations, which could impact costs.
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The bank is not updating its 2028 cost target, as remaining savings will be more spread over time and full synergies will only be achieved beyond 2028.
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There is uncertainty regarding the sustainability of elevated clearing results and other commercial NII.
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The bank faces margin pressure on the asset side due to competitive market conditions.
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The bank is not considering additional capital distributions beyond the 100% payout policy at this time, despite strong capital levels.
Q & A Highlights
Q: Can you give us an update on the distribution, given the strong capital position of 15.9% CET1, which is well ahead of the 13.75% target? Why do we need to wait until full-year results for an excess capital distribution decision? A: Marguerite Berard (CEO): We are committed to returning at least 7.5 billion of capital and paying out up to 100% of net profit over 2026-2028. We will conduct our annual capital assessment with Q4 results and do not want to speculate ahead of that. We are still early in our three-year strategic period, but if our capital position remains significantly above target over time, we may consider additional distributions.
Q: The corporate banking loans grew 11% in the first half. Is that a sustainable level of growth given it's a lower ROE business? What is the margin on corporate loans versus mortgages? A: Marguerite Berard (CEO): The key marching order for Corporate Banking is profitability, not growth at all costs. We are pursuing profitable growth through our discipline client selection framework and RWA optimization. While we are happy with the commercial momentum, the market is competitive, and we see margin pressure on the asset side, partly due to the high share of government-backed NHG mortgages in our mix.
Q: Your asset NII is remarkably stable despite loan growth. Should we expect the pickup in the second half to come from liability NII? Also, given your strong capital position, do you still have appetite for more M&A deals? A: Ferdinand Vaandrager (CFO) & Marguerite Berard (CEO): Asset NII is stable because healthy growth in mortgages and corporate loans is offset by lower lending margins, driven by lower RWA density and lower LTVs. On M&A, we are very focused on making the HAL and NIBC acquisitions successful. We maintain a very disciplined M&A policy, only considering targets that fit our strategy, are accretive, and have manageable execution risk.
Q: Other commercial NII is running above your previous guidance. Is this just a volatile clearing result or is there a structural reason? Also, is the 119 basis point liability margin sustainable given competitive dynamics? A: Ferdinand Vaandrager (CFO): The strong other commercial NII was driven by higher financing needs from clearing clients. We have raised our guidance to around 600 million, which includes NIBC. On liability margins, the 5 basis point increase reflects disciplined deposit pricing and the tailwind from our replicating portfolio. We expect the trajectory to continue, though competition and migration shifts remain factors.
Q: On the liability margin trajectory, the chart on slide 10 shows a 10 basis point uplift compared to last quarter's April curve scenario. Why has the trajectory improved? A: Ferdinand Vaandrager (CFO): The improvement is due to the assumption of a full pass-through on interest-bearing deposits. We have been very disciplined on pricing, with the savings coupon remaining at 1.25% since May last year. As forward curves improve, the starting point for the trajectory is higher each quarter.
Q: Does your NII guidance assume constant margins on interest-bearing deposits? Can you give a sensitivity on the guidance if you include higher loyalty margins? Also, regarding the ICS-Worldline transaction, were the cost savings already included in your CMD targets? A: Ferdinand Vaandrager (CFO) & Marguerite Berard (CEO): The guidance assumes a full pass-through on interest paid deposits. A 10 basis point increase in liability margin could translate to roughly 250 million, but rates are volatile and competition may increase. On ICS-Worldline, only a small part was included in the '28 cost target; the full benefit will be realized in '29, with restructuring costs taken upfront.
Q: What is your view on competition for deposits in the Netherlands, particularly from aggressive fintechs? Also, does the 5.5 billion cost guidance include restructuring costs? A: Marguerite Berard (CEO) & Ferdinand Vaandrager (CFO): The Dutch savings market is healthy, competitive, and transparent. We grew our market share again in Q2, demonstrating strong commercial momentum. The 5.5 billion cost guidance excludes restructuring costs and incidentals but includes an IBC. We expect a cost bump in Q4 due to banking tax and regulatory levies.
Q: On capital, is it fair to assume Q4 results in February are too early to expect distribution above 100%? On costs, can you confirm the 5.5 billion guidance is headline operating expenses excluding restructuring and incidentals? A: Marguerite Berard (CEO) & Ferdinand Vaandrager (CFO): We are still early in the three-year plan, so we won't speculate on additional distributions ahead of the Q4 capital assessment. On costs, the guidance excludes restructuring and incidentals. The H2 versus H1 increase reflects NIBC's contribution, banking tax, and a provision for the ICS outsourcing of around 30 million in Q3.
Q: The CMD targets factored in a mix shift towards NHG and lower LTVs. How does what you're seeing compare to that trajectory? Also, what is the regulatory cost expectation for full year '26? A: Ferdinand Vaandrager (CFO): The mix shift towards NHG-backed mortgages has had a larger effect than expected at the CMD. We also see the outflow of higher-yielding mortgages and the de-risking of interest-only mortgages. The regulatory cost, including banking tax and NIBC, is around 150 million for the year, which is included in the 5.5 billion guidance.
Q: Given the strong system volume growth in the Netherlands of 6-7%, are you willing to not compete on price and seed market share? Also, what are the key areas for growth in wealth management? A: Ferdinand Vaandrager (CFO) & Marguerite Berard (CEO): Our underlying client funding growth was 11% annualized, and our market share slightly increased to 14-15%. We are comfortable with our 3-4% underlying growth assumption for now. On wealth management, we are focused on extracting synergies from the HAL acquisition and achieving our 335 billion client assets target through organic growth in priority segments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
