12 months 2005
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Additional information Results 12 months 2005 ING Group Note on accounting standards: 2005 figures based on full IFRS 2004 figures restated for IFRS excluding IAS 32/39 and IFRS 4 Figures prior to 2004 not restated, based on Dutch GAAP Underlying profit = profit excluding divestments and special items www.ing.com Additional information 12 months 2005 1 of 77 Contents (1) ING Group general Underlying profit before tax P&L ING Group, 12 months Profit before tax and underlying profit before tax Profit before tax and underlying profit before tax Net profit and underlying net profit Net profit and underlying net profit Insurance, pre tax impact of divestments and special items Banking, pre tax impact of divestments and special items Insurance, net profit impact of divestments and special items Banking, net profit impact of divestments and special items P&L Insurance Europe P&L Insurance Americas P&L Insurance Asia/Pacific P&L Wholesale Banking P&L Retail Banking P&L ING Direct Insurance Europe, impact divestments and special items Insurance Americas, impact divestments and special items Insurance Asia/Pacific, impact divestments and special items Wholesale Banking, impact divestments and special items Retail Banking, impact divestment and special items Business lines: income and profit before tax Operating expenses Tax and tax ratio Additional information 12 months 2005 2 of 77 5 of 77 6 of 77 7 of 77 8 of 77 9 of 77 10 of 77 11 of 77 12 of 77 13 of 77 14 of 77 15 of 77 16 of 77 17 of 77 18 of 77 19 of 77 20 of 77 21 of 77 22 of 77 23 of 77 24 of 77 25 of 77 26 of 77 27 of 77 28 of 77 Contents (2) Information on capital Balance sheet ING Group The composition of ING’s capital base Information on capital and solvency Financial leverage ING Group and ING Insurance Capital Position ING Insurance Insurance: capital and reserves per region Capital position ING Bank ING Group insurance operations Premium income, 12 months 2005 Profit before tax Developing markets Developing markets New business information, 12 months 2005 New business information, 12 months 2004 Non-life operations by class of business Profit non-life insurance by class of business Ratios non-life ING Insurance Investments by product type Fixed income securities by rating class Balance sheet ING Verzekeringen N.V. Additional information 12 months 2005 29 of 77 30 of 77 31 of 77 32 of 77 33 of 77 34 of 77 35 of 77 36 of 77 37 of 77 38 of 77 39 of 77 40 of 77 41 of 77 42 of 77 43 of 77 44 of 77 45 of 77 46 of 77 47 of 77 48 -51 of 77 52 of 77 3 of 77 Contents (3) ING Group banking operations Income banking operations Banking: Underlying Profit before tax Banking: development interest margin RAROC and Economic capital Cost/income ratio Risk costs ratio (in bps of average CRWA) Value at Risk trading and treasury positions 2005 Loans and advances to customers of the banking operations Loan portfolio ratios Balance sheet ING Bank N.V. 54 of 77 55 of 77 56 of 77 57 of 77 58 of 77 59 of 77 60 of 77 61 of 77 62 of 77 63 of 77 ING Direct 64 - 72 of 77 Pensions 73 - 76 of 77 Disclaimer Additional information 12 months 2005 77 of 77 4 of 77 Underlying Profit before tax, 2005 Insurance Asia/Pacific 14% Life 32% Bank 53% Non-life 15% Insurance Americas 36% Life (excl. Other) Total ING Direct 13% Insurance Europe 34% Wholesale Banking 48% Insurance Americas 66% Retail Banking 39% Banking Additional information 12 months 2005 Insurance Europe 50% Non-life (excl. Other) 5 of 77 (excl. Other) P&L ING Group, 12 months Insurance 2005 2004 Premium income Investment income Interest result banking operations Commission income Other income Total income 45,758 43,617 9,944 10,179 Underwriting expenditure Other interest expenses Operating expenses Impairments/additions to the provision for loan losses Total expenditure Profit before tax Taxation Third-party interests Net profit Total* 2005 2004 % change 937 363 9,162 8,699 2,401 2,581 1,348 1,035 13,84812,678 45,758 43,617 10,845 10,379 9,067 8,741 3,747 3,779 1,724 1,643 71,141 68,159 5 4 4 -1 5 4 47,120 45,384 1,100 1,140 5,195 4,746 8,844 8,795 47,120 45,384 969 1,019 14,039 13,541 4 -5 4 31 10 53,446 51,280 88 465 8,932 9,260 119 475 62,247 60,419 -75 3 1,346 1,198 376 608 57,424 55,602 3,978 455 255 3,268 * including inter company eliminations Additional information 12 months 2005 Banking 2005 2004 6 of 77 4,322 850 123 3,349 4,916 3,418 924 859 50 153 3,942 2,406 8,894 1,379 305 7,210 7,740 1,709 276 5,755 15 -19 11 25 Profit before tax and underlying profit before tax Insurance Banking Total Twelve months Profit before tax (PBT) Impact divestments PBT excl. divestments %ch 12m05 12m04 12m05 12m04 12m05 12m04 3,978 4,322 4,916 3,418 8,894 7,740 3 372 385 -99 388 273 3,975 3,950 4,531 3,517 8,506 7,467 Special items Underlying PBT Additional information 12 months 2005 386 3,975 3,564 7 of 77 -44 4,531 3,561 15 14 342 8,506 7,125 19 Profit before tax and underlying profit before tax Insurance Banking Total Fourth quarter Profit before tax (PBT) Impact divestments PBT excl. divestments %ch 4Q05 4Q04 4Q05 4Q04 4Q05 4Q04 1,039 1,235 1,120 635 2,159 1,870 17 299 -8 -172 9 127 1,022 936 1,128 807 2,150 1,743 Special items Underlying PBT Additional information 12 months 2005 65 1,022 871 8 of 77 -19 1,128 826 15 23 46 2,150 1,697 27 Net profit and underlying net profit Twelve months Net profit Impact divestments Net profit excl. Insurance Banking Total %ch 12m05 12m04 12m05 12m04 12m05 12m04 3,268 3,349 3,942 2,406 7,210 5,755 34 384 397 -43 431 341 3,234 2,965 3,545 2,449 6,779 5,414 400 373 183 82 583 455 2,834 2,592 3,362 2,367 6,196 4,959 25 25 divestments Special items Underlying net profit Additional information 12 months 2005 9 of 77 25 Net profit and underlying net profit Fourth quarter Insurance Banking Total %ch 4Q05 4Q04 4Q05 4Q04 4Q05 4Q04 861 875 979 533 1,840 1,408 19 254 -6 -136 13 118 842 621 985 669 1,827 1,290 Special items 130 -7 148 98 278 91 Underlying net profit 712 628 837 571 1,549 1,199 Net profit Impact divestments Net profit excl. 31 42 divestments Additional information 12 months 2005 10 of 77 29 Insurance, pre tax impact of divestments and special items Insurance Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 Profit before tax 1,039 1,123 794 1,022 1,235 975 1,396 716 Sale Australian non-life 219 Sale ING Re Sale LOG divestment 20 -10 -1 33 -78 -28 Gain IPO Canada 19 Sale Freeler 10 Sale Austbrokers -252 249 27 Absence result divestments 1 7 8 Hedge result 45 20 48 38 65 67 75 83 Gain old reinsurance Underlying profit before tax Additional information 12 months 2005 96 1,022 1,103 11 of 77 865 985 871 1,140 958 595 Banking, pre tax impact of divestments and special items Banking Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 Profit before tax 1,120 1,230 1,013 1,553 635 909 854 1,020 Sale Asian Cash Eq. -84 Sale CenE Bankiers 87 Sale BHF-Bank -169 Sale BAM -15 255 Sale 12.8% shares Slaski 92 Restructuring NMB-Heller Absence result divestments 47 -8 14 Hedge result Restruct.prov. Int. Wh. Banking Underlying profit before tax Additional information 12 months 2005 -3 -28 2 96 22 0 -22 -3 850 874 1,011 -41 1,128 1,245 12 of 77 966 1,192 826 Insurance, net profit impact of divestments and special items Insurance Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 Net profit 861 977 700 730 875 931 1,076 467 Sale Australia non-life 20 Sale ING RE Sale LOG divestment 13 -7 -53 -39 19 Sale Freeler 10 Absence result divestment 249 25 1 1 5 6 Hedge result 56 42 69 37 44 43 49 54 42 92 Gain old reinsurance Release tax provision 130 170 100 Underlying net profit Of which capital gains on shares 712 160 793 76 634 36 Additional information 12 months 2005 -164 -18 Gain IPO Canada Sale Austbrokers 146 13 of 77 695 38 -51 100 628 150 868 382 720 36 376 11 Banking, net profit impact of divestments and special items Banking Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 Net profit 979 901 851 1,211 533 623 587 663 Sale Asian Cash Eq. -54 Sale CenE Bankiers 87 Sale BHF-Bank -114 Sale BAM -15 269 Sale 12.8% shares Slaski 92 Restructuring NMB-Heller Absence result divestments 47 -6 10 Hedge result Restruct.prov. Int. Wh. Banking -23 6 77 14 0 -14 -2 559 595 642 -28 Release tax provision/tax asset 148 Underlying net profit 837 Additional information 12 months 2005 -22 35 916 14 of 77 769 112 840 571 P&L Insurance Europe 2005 2004 Premium income Income from investments Commission and other income Total income Q4 2,651 1,096 253 4,000 Q3 Q2 Q1 2,478 2,421 3,152 1,211 1,219 1,057 111 114 282 3,800 3,754 4,491 Q4 Q3 Q2 Q1 2,661 2,662 2,504 3,542 1,068 985 1,144 975 179 121 71 129 3,908 3,768 3,719 4,646 Underwriting expenditure Other interest expenses Operating expenses Investment losses Total expenditure 2,837 111 477 14 3,439 2,728 2,678 3,401 134 118 118 472 467 454 1 1 3 3,335 3,264 3,976 2,916 2,920 2,703 3,788 92 62 71 97 542 397 429 400 -7 -8 7 9 3,543 3,371 3,210 4,294 Profit before tax (PBT) Gains / losses on divestments PBT from divested units PBT excluding divestments Underlying PBT Additional information 12 months 2005 561 465 490 515 10 365 397 509 352 561 561 465 465 490 490 505 505 365 365 397 397 509 498 352 352 15 of 77 P&L Insurance Americas 2004 2005 Premium income Income from investments Commission and other income Total income Q4 Q3 Q2 Q1 5,875 5,997 5,675 5,197 1,042 1,168 1,148 1,029 127 507 -3 274 7,044 7,672 6,820 6,500 Q4 5,412 1,407 204 7,023 Q3 5,819 1,033 197 7,049 Q2 5,786 1,056 226 7,068 Q1 5,744 1,006 194 6,944 Underwriting expenditure Other interest expenses Operating expenses Investment losses Total expenditure 6,045 6,346 5,794 5,412 -82 131 -24 73 666 602 577 552 1 5 -3 6,630 7,084 6,344 6,037 5,658 58 584 12 6,312 6,326 20 538 1 6,885 6,031 14 551 -1 6,595 6,043 26 529 2 6,600 711 254 40 417 417 164 -252 21 395 395 473 344 12 461 461 16 328 328 Profit before tax (PBT) Gains / losses on divestments PBT from divested units PBT excluding divestments Underlying PBT Additional information 12 months 2005 414 -10 424 424 588 19 569 569 16 of 77 476 -78 5 549 549 463 19 7 437 437 P&L Insurance Asia/Pacific 2005 2004 Premium income Income from investments Commission and other income Total income Q4 Q3 Q2 Q1 3,158 2,961 3,357 2,810 266 255 210 194 -41 -63 46 46 3,383 3,153 3,613 3,050 Q4 2,795 186 1 2,982 Q3 2,371 203 19 2,593 Q2 2,227 391 34 2,652 Q1 2,076 164 23 2,263 Underwriting expenditure Other interest expenses Operating expenses Investment losses Total expenditure 2,992 2,802 3,347 2,697 2 3 2 1 243 233 210 181 7 1 3,244 3,039 3,559 2,879 2,649 2 210 -4 2,857 2,308 0 189 2 2,499 2,091 2 155 -1 2,247 1,955 4 173 -1 2,131 405 219 36 150 150 132 Profit before tax (PBT) Gains / losses on divestments PBT from divested units PBT excluding divestments Underlying PBT Additional information 12 months 2005 139 27 112 112 114 54 171 125 94 1 113 113 2 52 52 1 170 170 5 120 120 -1 95 95 17 of 77 22 110 110 P&L Wholesale Banking 2005 Interest result Commission income Other income Total income 2004 Q2 Q1 Q4 Q3 755 836 636 701 327 327 243 302 283 185 575 787 1,365 1,348 1,454 1,790 Q4 Q3 Q2 Q1 807 797 822 846 310 329 322 402 192 334 282 428 1,309 1,460 1,426 1,676 Operating expenses Gross result Addition to the provision for loan losses 882 483 816 532 920 534 848 942 967 342 898 562 932 494 937 739 -11 -21 6 -82 19 34 68 71 Profit before tax (PBT) Gains / losses on divestments PBT from divested units PBT excluding divestments Underlying PBT 494 0 -8 502 502 553 -15 528 1,024 47 285 14 481 725 481 725 323 -169 -4 496 537 528 87 -30 471 471 426 668 -84 91 661 661 Additional information 12 months 2005 568 568 18 of 77 3 423 423 P&L Retail Banking 2005 Interest result Commission income Other income Total income Q4 Q3 Q2 Q1 1,125 1,125 1,102 1,045 272 283 271 272 59 100 35 107 1,456 1,508 1,408 1,424 Operating expenses Gross result Addition to the provision for loan losses 925 1,001 531 507 25 Profit before tax (PBT) Gains / losses on divestments PBT from divested units PBT excluding divestments Underlying PBT 506 Additional information 12 months 2005 2004 506 506 Q4 Q3 Q2 Q1 995 998 982 953 260 292 304 281 38 7 -29 -19 1,293 1,297 1,257 1,215 976 432 927 497 1,054 239 906 391 903 354 840 375 6 18 41 64 39 36 45 501 414 456 62 175 352 318 330 1 174 174 2 350 350 -1 319 319 5 325 325 501 501 19 of 77 414 414 394 394 P&L ING Direct 2005 2004 Q4 547 28 0 575 Q3 516 30 14 560 Q2 432 24 41 497 Q1 452 22 13 487 Q4 431 22 10 463 Q3 430 16 3 449 Q2 396 26 3 425 Q1 351 18 3 372 Operating expenses Gross result Addition to the provision for loan losses 379 196 350 210 344 153 323 164 329 134 307 142 276 149 273 99 12 31 26 37 16 28 24 21 Profit before tax (PBT) PBT excluding divestments Underlying PBT 184 184 184 179 179 179 127 127 127 127 127 127 118 118 118 114 114 114 125 125 125 78 78 78 Interest result Commission income Other income Total income Additional information 12 months 2005 20 of 77 Insurance Europe, impact divestments and special items Profit before tax (PBT) Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 561 465 490 515 365 397 509 352 365 365 397 397 509 11 498 352 352 Gains / losses from divestments • Freeler 10 PBT from divested units PBT excl. divestments Gain old reinsurance Underlying PBT Additional information 12 months 2005 561 561 465 465 21 of 77 490 490 505 505 Insurance Americas, impact divestments and special items Profit before tax (PBT) Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 414 588 476 463 711 164 473 344 19 249 Gains / losses from divestments • ING Canada IPO • ING Re • Loss on sale of Life of Georgia 20 -10 -1 PBT from divested units PBT excl. divestments Special items Underlying PBT Additional information 12 months 2005 424 424 569 569 22 of 77 33 -78 -252 -28 5 7 40 21 12 16 549 549 437 437 417 417 395 395 461 461 328 328 Insurance Asia/Pacific, impact divestments and special items Profit before tax (PBT) Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 139 114 54 171 125 94 405 132 Gains / losses from divestments • Australia non-life • Austbrokers 219 27 PBT from divested units PBT excl. divestments Special items Underlying PBT Additional information 12 months 2005 112 112 1 2 1 5 -1 36 22 113 113 52 52 170 170 120 120 95 95 150 150 110 110 23 of 77 Wholesale Banking, impact divestments and special items Profit before tax (PBT) Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 494 553 528 1,024 323 528 426 668 Gains / losses from divestments • Sale Asian Cash Equities -84 • Sale CenE Bankiers 87 -169 • Sale BHF-Bank • Sale Baring Asset Management 255 -15 30 • Sale shares ING Bank Slaski 47 • Restructuring NMB-Heller PBT from divested units -8 PBT excl. divestments Restructuring provision Underlying PBT 502 502 Additional information 12 months 2005 568 568 24 of 77 481 481 14 -4 -30 3 91 725 725 496 41 537 471 471 423 423 661 661 Retail Banking, impact divestments and special items Profit before tax (PBT) Q4 2005 Q3 2005 Q2 2005 Q1 2005 Q4 2004 Q3 2004 Q2 2004 Q1 2004 506 501 414 456 175 352 318 330 1 2 -1 5 174 174 350 350 319 319 325 325 Gains / losses from divestments • Sale shares ING Bank Slaski 62 PBT from divested units PBT excl. divestments Special items Underlying PBT Additional information 12 months 2005 506 506 501 501 25 of 77 414 414 394 394 Business lines: income and profit before tax 12 months 2005 2004 Insurance Europe Insurance Americas Insurance Asia/Pacific Wholesale Banking Retail Banking ING Direct Corporate line Total income Insurance Europe Insurance Americas Insurance Asia/Pacific Wholesale Banking Retail Banking ING Direct Corporate line Total profit before tax Additional information 12 months 2005 Q4 % 16,045 28,036 13,199 5,957 5,796 2,119 -11 71,141 16,041 28,084 10,490 5,871 5,062 1,709 902 68,159 0 0 26 1 15 24 2,031 1,941 478 2,599 1,877 617 -649 8,894 1,623 1,692 756 1,945 1,175 435 114 7,740 25 15 -37 34 60 42 26 of 77 4 15 2005 4,000 7,044 3,383 1,365 1,456 575 130 17,953 561 414 139 494 506 184 -139 2,159 2004 3,908 7,023 2,982 1,309 1,293 463 206 17,184 % 2 0 13 4 13 24 4 365 54 711 -42 125 11 323 53 175 189 118 56 53 1,870 15 Operating expenses (12 months) • Personnel expenses - insurance operations - banking operations • Other expenses - insurance operations - banking operations • Total operating expenses - insurance operations - banking operations Additional information 12 months 2005 27 of 77 2005 2004 % 2,901 4,745 7,646 2,686 4,950 7,636 8 -4 0 2,294 4,099 6,393 2,060 3,845 5,905 11 7 8 5,195 8,844 14,039 4,746 8,795 13,541 9 1 4 Tax and tax ratio (12 months) Tax Insurance operations Banking operations Total 455 924 1,379 850 859 1,709 Tax ratio in %: Insurance operations Banking operations Total 11.4 18.8 15.5 19.7 25.1 22.1 Additional information 12 months 2005 2005 2004 28 of 77 Information on capital Additional information 12 months 2005 29 of 77 Balance sheet ING Group 31 December 2005 Assets Cash and balances with central banks Amounts due from banks Non-trading derivatives Financial assets at fair value through P&L Investments Loans and advances to customers Reinsurance contracts Property and equipment Other assets Total Capital and reserves Third-party interests Total equity Liabilities Preference shares Subordinated loans Insurance and investment contracts Amounts due to banks Customer deposits and other funds on deposit Debt securities in issue/other borrowed funds Financial liabilities at fair value through P&L Non-trading derivatives Other liabilities Total liabilities Total equity and liabilities Additional information 12 months 2005 30 of 77 1 January 2005 % 13,084 47,466 7,766 260,378 322,712 439,181 8,285 5,757 54,010 1,158,639 9,805 48,914 9,103 205,101 265,602 371,919 6,818 5,783 41,410 964,455 33 -3 -15 27 22 18 22 0 30 20 36,736 1,689 38,425 28,172 2,095 30,267 30 -19 27 296 6,096 263,487 122,234 465,712 113,541 103,620 6,248 38,980 1,120,214 1,158,639 296 4,230 218,360 90,444 395,348 107,245 79,398 8,701 30,166 934,188 964,455 44 21 35 18 6 31 -28 29 20 20 The composition of ING’s capital base 31 December 2005 Group Insurance Bank Capital and reserves Group hybrid capital (1) Core debt Other (2) 36,736 7,883 3,964 -151 20,627 1,823 21,331 5,764 -178 -1,205 Total capitalisation 48,432 22,272 25,889 Prudential filter (re volatile parts of IFRS) Insurance hybrid capital Minorities Other -5,978 -2,844 2,229 1,227 -3,134 22,884 23,408 11,318 Regulatory capital Other qualifying capital DAC/VIF adjustment Double gearing - 3,964 Adjusted equity / capital base 38,490 4,503 27,387 (1) Group hybrids exceed hybrids Bank + Insurance (mainly due to preference shares). (2) Goodwill +revaluation of shares and real estate at ING Bank. Additional information 12 months 2005 652 31 of 77 34,726 Information on capital and solvency EXPLANATIONS OF ING’s capital base. • Capital and reserves represent accounting capital (B/S item) • Group hybrid capital consists of all tier-1 instruments issued by the Group (e.g. perpetual debt securities and preference shares); • All Group hybrid tier-1 instruments other than the preference shares, are downstreamed to Insurance and/or Bank on a mirrored basis; • Group core debt equals investments minus equity of the Group holding company. This net debt position is used by the Group as equity for Insurance and Bank and is numerator of the Group D/E ratio. (D/E ratio = (core debt) / (adjusted equity + core debt)); • To calculate regulatory capital, ING deducts the entire revaluation reserve (IFRS prudential filter). The banking regulator requires this deduction to be made from tier-1 capital, and ING applies this method to Bank, Insurance and Group. Regulatory capital for the bank is Tier I capital; • To calculate adjusted equity for Insurance, deduct 50% of the deferred acquisition costs (DAC) and add 50% of the value in force (ViF). Adjusted equity is the basis for calculating the leverage ratio’s of Insurance; • Internally, ING manages and allocates capital on the basis of economic capital (EC). Additional information 12 months 2005 32 of 77 Financial leverage ING Group and ING Insurance ING Insurance ING Group Core debt Adjusted equity D/E ratio Core debt Adjusted equity D/E ratio 31/12/00 7,300 22,729 24.3% 4,698 28,178 14.3% 31/12/01 8,076 22,634 26.3% 6,203 24,656 20.1% 31/12/02 5,721 19,408 22.8% 5,681 22,812 19.9% 31/12/03 4,892 19,818 19.8% 4,441 26,366 14.4% 31/03/04 5,206 20,584 20.2% 4,311 28,034 13.3% 30/06/04 4,743 21,255 18.2% 4,091 29,827 12.1% 30/09/04 4,130 21,562 16.1% 3,918 30,350 11.4% 31/12/04 3,633 22,467 13.9% 3,441 31,258 9.9% 01/01/05 3,633 21,808 14.3% 3,782 27,895 11.9% 31/03/05 4,092 23,029 15.1% 3,152 31,971 9.0% 30/06/05 3,925 23,560 14.3% 3,609 33,400 9.8% 30/09/05 4,197 25,380 14.2% 3,855 35,196 9.9% 31/12/05 4,170 27,387 13.2% 3,964 38,490 9.3% D/E = (core debt) / (adjusted equity + core debt) Additional information 12 months 2005 33 of 77 Capital Position ING Insurance Total regulatory capital base Buffer for shares & real estate 100% EU solvency Internal solvency surplus Internal capital coverage External capital coverage a b c a-b-c a/(b+c) a/c 31/12/2000 18,589 7,800 7,900 2,889 118% 235% 31/12/2001 17,675 7,000 9,845 830 105% 180% 31/12/2002 14,717 4,652 8,718 1,347 110% 169% 31/12/2003 15,844 3,846 8,779 3,219 125% 180% 31/12/2004 18,272 4,273 8,697 5,302 141% 210% 01/01/2005 17,419 4,273 8,697 4,449 134% 200% 31/03/2005 18,658 4,530 8,981 5,147 138% 208% 30/06/2005 19,132 4,674 8,375 6,083 147% 228% 30/09/2005 20,879 5,042 8,501 7,336 154% 246% 31/12/2005 22,884 5,304 8,851 8,729 162% 259% Additional information 12 months 2005 34 of 77 Insurance: capital and reserves per region 31 December 2005 Capital and reserves Netherlands 10,166 Belgium 906 USA 4,515 Canada 1,524 Mexico 955 Australia 1,252 Taiwan 1,293 Other 16 Total Additional information 12 months 2005 20,627 35 of 77 Capital position ING Bank ING GAAP Capital position Year end 2001 2004 2002 2003 13,941 14,000 14,435 16,114 Core capital (excl. hybrids) Core capital funded 3,142 4,080 4,639 5,025 by Group hybrids Tier-1 capital 17,083 18,080 19,074 21,139 Other capital 8,628 9,071 9,408 10,294 Qualifying capital 25,711 27,151 28,482 31,433 IFRS Jan. 1st Q1 2005 2005 13,959 15,569 Q2 Q3 Q4 2005 2005 2005 16,633 16,923 17,644 5,025 5,166 5,367 5,698 5,764 18,984 9,678 28,662 20,735 10,181 30,916 22,000 10,241 32,241 22,621 11,383 34,004 23,408 11,318 34,726 RWAs 243,174 247,287 251,266 274,138 274,138 287,398 305,543 313,905 319,653 Tier-1 ratio BIS ratio 7.03% 7.31% 7.59% 7.71% 10.57% 10.98% 11.34% 11.47% 6.92% 7.21% 7.20% 7.21% 7.32% 10.46% 10.76% 10.55% 10.83% 10.86% Additional information 12 months 2005 36 of 77 ING Group insurance operations Additional information 12 months 2005 37 of 77 Premium income, 12 months 2005 Life %ch Underlying %ch Non-life %ch Underlying %ch Netherlands 5,449 -6 -6 1,642 -3 -3 Belgium 1,630 -23 20 319 -2 -2 Central Europe 1,616 18 18 46 -4 -4 17,625 -2 0 513 -3 -1 2,585 17 5 USA Canada Latin America 567 12 15 1,454 -9 -7 12,064 51 51 41 11 11 181 -85 5 Other 12 8 15 14 -6 -7 Total 39,144 6 12 6,614 0 -1 Asia Australia Additional information 12 months 2005 38 of 77 Profit before tax (12 months 2005) The Netherlands Belgium Centra Europe & Spain Insurance Europe North America Latin America Insurance Americas Asia Australia Insurance Asia/Pacific Other Total Additional information 12 months 2005 Life 1,230 126 251 1,607 1,007 101 1,108 272 200 472 -521 2,666 39 of 77 % 20 3 49 22 50 -4 43 -12 18 -2 1 Non-life 369 48 7 424 775 58 833 6 0 6 49 1,312 % 35 129 -36 39 -5 -42 -9 100 -100 -98 -72 -22 Developing markets (12 months) Premium Profit before tax 2005 2004 % 2005 2004 % Europe 1,045 857 22 211 156 35 Latin America 2,019 2,083 -3 154 202 -24 Asia 5,762 4,588 26 211 228 -7 Total 8,826 7,528 17 575 586 -2 211 575 140 497 52 16 Asia excl. Taiwan Total excl. Taiwan Additional information 12 months 2005 40 of 77 Developing markets Premium (12 months) Poland Czech Republic Slovakia Hungary Romania Bulgaria Russia Mexico Brazil Chile Peru Latin America Corporate South Korea Taiwan China Hong Kong India Malaysia Thailand Total 2005 2004 2005 234 298 64 341 107 0 0 1,424 0 594 0 0 2,278 2,707 46 256 67 358 49 8,826 200 258 57 267 75 0 0 1,551 0 532 0 0 1,598 2,348 36 232 27 313 35 7,528 107 41 -5 61 10 -2 -1 105 6 24 23 -4 181 0 -3 22 -20 35 -4 575 2004 62 37 2 51 6 -1 -2 122 13 45 23 0 119 89 -4 14 -18 33 -4 586 575 497 Total excl. Taiwan Additional information 12 months 2005 Profit before tax 41 of 77 New business information, 12 months 2005 Annual Single APE(1) VNB(2) NBM(3) IRR 167 1,413 308 95 30.8% 13.2% Belgium & Luxembourg 49 1,361 185 36 19.5% 16.9% Central Europe & Spain 260 370 297 94 31.8% 15.6% Insurance Europe 476 3,144 790 226 28.5% 14.6% 1,379 15,659 2,945 172 5.9% 10.9% 119 12 120 21 17.6% 19.9% 96 204 117 13 11.5% 10.0% Insurance Americas 1,594 15,875 3,182 207 6.5% 11.1% Insurance Asia/Pacific 1,687 6,527 2,339 373 15.9% 15.0% Total 3,757 25,545 6,312 805 12.5% 13.2% Netherlands US Mexico South America 1. Annual Premium Equivalent = 100% of Annual plus 10% of Single 2. Value of New Business 3. New Business Margin (Defined as (VNB / APE) * 100%.) Additional information 12 months 2005 42 of 77 New business information, 12 months 2004 Annual Single APE(1) VNB(2) NBM(3) IRR 178 1,709 349 58 16.6% 10.5% Belgium & Luxembourg 52 1,583 210 42 20.2% 22.8% Central Europe & Spain 202 216 224 38 16.8% 12.6% Insurance Europe 432 3,508 783 138 17.6% 12.4% 1,194 13,726 2,567 138 5.4% 10.3% 138 14 139 25 18.1% 26.3% 77 177 95 10 10.6% 10.0% Insurance Americas 1,409 13,917 2,801 173 6.2% 10.7% Insurance Asia/Pacific 1,086 2,996 1,386 321 23.2% 13.6% Total 2,927 20,421 4,970 632 12.7% 12.1% Netherlands US Mexico South America 1. Annual Premium Equivalent = 100% of Annual plus 10% of Single 2. Value of New Business 3. New Business Margin (Defined as (VNB /APE) * 100%.) Additional information 12 months 2005 43 of 77 Non-life operations by class of business (12 months) Fire Marine & Aviation Motor Health Income/Accident Miscellaneous Indirect business Total Additional information 12 months 2005 Premium income Profit before tax 2005 2004 2005 2004 1,503 109 2,371 1,154 780 640 57 6,614 1,490 141 2,175 1,097 872 818 50 6,642 101 11 652 92 268 163 25 1,312 175 10 509 76 287 519 99 1,675 44 of 77 Profit non-life insurance by class of business (12 months 2005) Fire The Netherlands 36 Belgium Central Eur./Spain M.& A. Motor Health 2 Acc. Misc. Indirect Total 13 6 248 51 17 11 7 17 -4 48 2 4 2 -1 7 North America 64 4 567 81 55 Latin America 2 4 46 -2 8 Asia 1 1 2 Other -21 Total 101 Additional information 12 months 2005 1 9 11 652 45 of 77 92 268 13 4 369 775 58 1 6 54 7 49 163 25 1,312 Ratios non-life Claims ratio Expense ratio Combined ratio (12 months) 2005 2004 2005 2004 2005 2004 The Netherlands 56% 60% 39% 37% 95% 97% Belgium 67% 71% 34% 37% 101% 108% Central Europe/Spain 51% 46% 42% 36% 93% 82% USA 80% 84% 24% 22% 104% 106% Canada 56% 56% 31% 29% 87% 85% Latin America 76% 72% 28% 27% 104% 99% Asia 53% 57% 40% 41% 93% 98% 46% Australia Total Additional information 12 months 2005 63% 63% 46 of 77 28% 32% 31% 74% 95% 94% ING Insurance Investments by product type 31 December 2005 Europe Americas Asia/Pacific Total 45,000 67,076 18,114 130,190 5,155 342 27 5,524 17,635 9,746 668 28,049 129 2,085 1,322 3,536 1,038 773 1,169 2,980 68,957 80,022 21,300 170,279 Real estate 3,597 368 77 4,042 Equities 9,878 2,083 1,952 13,913 82,432 82,473 23,329 188,234 Fixed income: Debentures Private loans Mortgages Policy loans Other Total fixed income Total Note: table includes general account portfolios only Additional information 12 months 2005 47 of 77 Fixed income securities by rating class Total ING Insurance 31 December 2005 • AAA • AA •A • BBB • BB • Rest 34% 19% 28% 16% 2% 1% Table does not include unrated securities, mortgages, policy loans and “other” fixed income investments Note: table includes general account portfolios only Additional information 12 months 2005 48 of 77 Fixed income securities by rating class Insurance Europe 31 December 2005 • AAA • AA •A • BBB • BB • Rest 42% 25% 24% 7% 1% 1% Table does not include unrated securities, mortgages, policy loans and “other” fixed income investments Note: table includes general account portfolios only Additional information 12 months 2005 49 of 77 Fixed income securities by rating class Insurance Americas 31 December 2005 • AAA • AA •A • BBB • BB • Rest 34% 10% 28% 24% 3% 1% Table does not include unrated securities, mortgages, policy loans and “other” fixed income investments Note: table includes general account portfolios only Additional information 12 months 2005 50 of 77 Fixed income securities by rating class Insurance Asia/Pacific 31 December 2005 • AAA • AA •A • BBB • Rest 13% 36% 38% 11% 2% Table does not include unrated securities, mortgages, policy loans and “other” fixed income investments Note: table includes general account portfolios only Additional information 12 months 2005 51 of 77 Balance sheet ING Verzekeringen N.V. 31 December 2005 Assets Cash and balances with central banks Non-trading derivatives Financial assets marked to market Investments Loans and advances to customers Reinsurance contracts Property and equipment Other assets Total Liabilities Capital and reserves Minority interests Total equity Subordinated loans Insurance and investment contracts Non-trading derivatives Other borrowed funds Other liabilities Total Additional information 12 months 2005 52 of 77 1 January 2005 2,745 2,346 101,965 144,122 38,467 8,285 4,363 26,518 328,811 2,659 1,385 77,497 120,404 36,383 6,818 6,276 20,664 272,086 20,627 1,227 21,854 4,377 263,487 896 21,538 16,659 328,811 15,501 1,776 17,277 2,893 218,360 1,544 13,432 18,580 272,086 ING Group banking operations Additional information 12 months 2005 53 of 77 Income banking operations (12 months) 2005 2004 % Netherlands Belgium Rest of the world Other subtotal Asset Management Total Wholesale Banking 1,923 1,346 1,596 1 4,866 1,091 5,957 1,977 1,466 1,512 29 4,984 887 5,871 -3 -8 6 -2 23 1 Netherlands Belgium Poland Other Total Retail Banking 3,866 1,426 268 236 5,796 3,335 1,274 179 274 5,062 16 12 50 -14 15 2,119 1,709 24 -24 13,848 36 12,678 9 Total ING Direct Other Total Additional information 12 months 2005 54 of 77 Banking, Underlying Profit before tax (12 months) 2005 2004 % Netherlands Belgium Rest of the world Other subtotal Asset Management Total Wholesale Banking 790 519 671 -50 1,930 346 2,276 826 665 313 -47 1,757 335 2,092 -4 -22 114 Netherlands Belgium Poland Other Total Retail Banking 1,387 337 41 50 1,815 1,091 55 19 3 1,168 27 513 116 617 435 42 -177 4,531 -134 3,561 27 Total ING Direct Other Total Additional information 12 months 2005 55 of 77 10 3 9 55 Banking: development interest margin (annualised, in %) IFRS GAAP* Dutch GAAP Total Netherlands Outside the Netherlands Q4 2005 Q3 2005 Q2 2005 Q1 2005 1.15 1.22 1.11 1.19 1.26 1.29 1.33 1.28 0.83 0.92 0.74 0.89 Q4 2004 Q3 2004 Q2 2004 Q1 2004 1.21 1.17 1.22 1.27 1.35 1.23 1.38 1.45 0.89 0.91 0.89 0.91 Q4 2004 Q3 2004 Q2 2004 Q1 2004 1.46 1.42 1.49 1.56 1.81 1.68 1.93 2.03 0.97 0.99 0.98 1.00 * estimated interest margins 2004 based on full IFRS Additional information 12 months 2005 56 of 77 RAROC and Economic capital (12 months) Pre-tax RAROC in % 2005 2004 Economic capital in EUR bln 2005 2004 27.7 19.9 17.5 -28.8 20.6 46.9 24.4 20.7 25.5 22.2 -1.6 -43.6 13.6 39.5 16.0 20.1 2.5 1.9 2.7 0.2 7.3 1.2 8.5 8.5 3.0 2.5 3.1 0.2 8.8 0.8 9.6 8.7 Netherlands Belgium Poland Other Total Retail Banking Underlying 70.4 51.1 53.8 3.0 52.4 50.6 58.5 16.4 20.5 -3.1 38.8 38.7 2.0 0.6 0.1 0.7 3.4 3.4 1.9 0.5 0.1 0.6 3.1 3.0 Total ING Direct Corporate line Total Underlying 20.9 19.9 27.7 25.2 19.4 22.1 3.1 0.1 15.0 15.0 2.4 0.2 15.2 14.3 Netherlands Belgium Rest of the world Other subtotal Asset Management Total Wholesale Banking Underlying Additional information 12 months 2005 57 of 77 Cost/income ratio (in %) Netherlands Belgium Rest of the world subtotal Asset Management Total Wholesale Banking Underlying 12m 2005 12m 2004 53.8 66.2 61.5 60.8 46.6 58.2 61.1 48.6 54.0 91.0 64.9 56.1 63.6 57.1 Netherlands Belgium Poland Other retail Total Retail Banking Underlying 61.0 77.1 87.9 79.7 66.1 66.8 63.7 92.9 79.9 92.7 73.2 72.9 Total ING Direct 65.9 69.3 Total Banking Underlying 63.9 65.6 69.4 66.6 Additional information 12 months 2005 58 of 77 Risk costs ratio (in bps of average CRWA) 12m 2005 (in %) Netherlands Belgium Rest of the world Other subtotal Asset Management Total Wholesale Banking Netherlands Belgium Poland Other Total Retail Banking Total ING Direct Total Banking Additional information 12 months 2005 59 of 77 12m 2004 10 -17 -20 0 -8 -4 -7 12 3 23 -8 13 7 12 18 -8 -240 -2 11 21 34 227 21 25 17 22 3 18 Value at Risk trading and treasury positions 2005 40 35 30 25 20 15 10 5 24.4 21.3 22.7 37.2 26.9 31.7 35.2 25.5 30.3 32.3 25.4 28.2 Q1 Q2 Q3 Q4 0 Maximum Minimum Average As of April 1, 2005 Financial Markets treasury and Financial Markets investment portfolios are included in the overall ING VaR limitstructure. This resulted in a significant increase of VaR figures compared to previous quarter. Additional information 12 months 2005 60 of 77 Loans and advances to customers of the banking operations (in EUR bn, end of period) - public authorities - other corporate 31 Dec. 2005 18.6 202.8 1 Jan. 2005 16.9 181.3 % 10 12 December 2005 46% Total corporate - mortgages - other personal Total personal Provisions for bank lending Total Additional information 12 months 2005 221.4 198.2 12 159.6 25.4 124.5 21.0 28 21 185.0 145.5 27 -3.3 -3.9 403.1 339.8 61 of 77 19 54% Corporate Personal Loan portfolio ratios 31 December 2005 (in EUR bn) 1 January 2005 Total provisions 3.3 3.9 Provisioned loans 6.8 7.6 450.5 388.8 Provisioned loans/total loans in % 1.5 2.0 Total provisions/provisioned loans in % 49 51 Provisions / total loans (in bp) 73 100 Total loans (incl. amounts due from banks) Additional information 12 months 2005 62 of 77 Balance sheet ING Bank N.V. 31 December 2005 1 January 2005 Assets Cash and balances with central banks Amounts due from banks Non-trading derivatives Financial assets at fair value through P&L Investments Loans and advances to customers Investments in associated undertakings Investment property/Property and equipment Other assets Total 10,718 47,466 5,780 159,260 180,135 403,059 1,188 6,369 20,060 834,035 7,834 48,914 8,092 127,723 145,198 339,837 940 6,552 13,830 698,920 Liabilities Capital and reserves Third party interests Total equity Amounts due to banks Customer deposits and other funds on deposit Non-trading derivatives Financial liabilities at fair value through P&L Debt securities in issue Subordinated loans Other liabilities Total liabilities and equity 21,331 482 21,813 122,234 466,154 5,593 103,619 73,295 18,781 22,546 834,035 17,196 337 17,533 90,444 398,203 7,484 79,398 70,822 18,470 16,566 698,920 Additional information 12 months 2005 63 of 77 ING Direct Additional information 12 months 2005 64 of 77 ING Direct highlights 2005 • • • • • • • • 3.2m new customers in 2005, reaching 14.7m Strong growth in Funds Entrusted EUR 42.6bn, including EUR 6.5bn currency impact, reaching EUR 188.0bn Accelerated growth in total Mortgages: +EUR 21.8bn to EUR 54.9bn 2005 results: Profit contribution (pre-tax) EUR 617m up 41.8% Operational expense to assets improved to 40 bps from 44 bps in 2004 Marketing expense 2005: EUR 426m 2005 Efficiency ratio (C/I): 65.9% Germany largest mortgage originator Additional information 12 months 2005 65 of 77 ING Direct’s growth Clients & Funds Entrusted (EUR bn) 14.7 m clients 200 180 EUR 188.0 bn Funds Entrusted EUR 10.8 bn off balance funds 160 140 120 80 151 60 0 1999 2000 50 7 40 20 1 -1 2002 2003 2004 2005 Total client retail funds entrusted Number of clients Additional information 12 months 2005 33 66 of 77 21 10 14 7 24 2001 55 30 3 55 7 13 5 103 2 60 9 199 20 15 11 100 40 Mortgages (EUR bn) 0 2001 2002 2003 2004 2005 ING Direct Pretax Profit* 617 600 500 435 400 300 200 151 100 0 97-'99 -100 2000 2001 -48 -70 -200 -151 -194 * Including ING Card Additional information 12 months 2005 2002 67 of 77 2003 2004 2005 ING Direct Operational Costs • Low. Flexible cost base is an important competitive advantage • ING Direct’s operational cost base (excluding marketing) is much lower and more flexible than traditional branch banks 300 250 250 Average Branch Bank: 250 bps 200 150 142 123 96 100 59 50 49 44 40 0 1999 • 2000 2001 2002 2003 2004 2005 Branch Marketing costs of over EUR 400 m p.a. can be adjusted quickly Additional information 12 months 2005 68 of 77 ING Direct main reasons to launch mortgages • • • • • Already successful in Australia and Germany Stable, locked-in margins Less dependence on one product Investment of savings balances Improve customer stickiness Additional information 12 months 2005 69 of 77 ING Direct: Credit and Market risk under control Mortgage Loan to value (LTV) Mortgage Interest rate risk Main Mortgage type Prepayment exposure Fixed > 90% Limited** Max LTV Current average LTV Canada 75%* 80%** Canada Spain 80% 58.7% Spain Variable 100% Negligible Australia 80% 57.2% Australia Variable 100% Negligible USA 95% 61% USA Hybrid* 100% Up to 100% Italy 80% 55.5% Italy Variable 100% Negligible Germany 100% 77% Fixed >90% Limited** Country Germany * Insured loans up to 95% ** Including insured loans (65% of the book) The growth is not coming from relaxed underwriting standards Additional information 12 months 2005 Country * Adjustable Rate Mortgage (ARM) 3,5,7 year fixed interest period ** With penalties Manageable risk + matched funding taking prepayments into consideration Prudent reserving level 70 of 77 ING Direct Investment Portfolio overview ING DIRECT -- Asset Class 1% 9% 5% Government 25% Provincials 1% Municipals 8% RMBS-GOV RMBS CMBS ABS Financials Covered Bonds 13% 32% FI Funds 5% 1% • Portfolio Rating: AA Average Additional information 12 months 2005 Corporates 71 of 77 ING Direct Canada: interest rate sensitivity • • • ING Direct Canada is the most mature business unit of ING Direct and has gone through many interest rate movements Results targets have always been met or exceeded Margin development Canada is shown in following graph: Interest paid / Liabilities vs. interest received / assets (%) 8% 7% Very stable / slightly 6% widening margin over time 5% 4% 3% interest paid / liabilities 2% interest received / assets 1% 0% jan99 10 yr- 3 months yield (steepness of the yield curve) jul99 jan00 jul00 Additional information 12 months 2005 jan01 jul01 jan02 jul02 jan03 jul03 72 of 77 jan04 jul04 jan05 jul05 jan06 Global Pensions Additional information 12 months 2005 73 of 77 Retirement Services full year 2005 Value new business: + 56% Assets: + 13% EUR m 806 569 187 Full year 2004 Total Pensions 366 EUR bn 258 223 112 195 Full year 2004 Total Pensions 198**) 30 187 Total Life/ Pensions Total Americas Europe***) Pensions Asia/Pacific Sales (annual premium equivalent):+33% Total Life/ Pensions Total Americas Europe***) Pensions Asia/Pacific Premiums/Pension funds: +8% EUR m 6,311 5,008 2,536 Full year 2004 Total Pensions 3,758 40 EUR bn 34*) 15 Full year 2004 Total Pensions 31**) 9 1,731 10 741 Total Total Life/ Pensions Pensions Americas Europe***) Asia/Pacific *) of which EUR 2,392 m is inflow pension funds Additional information 12 months 2005 81 Total Total Life/ Pensions Pensions **) adjusted for currency effects 74 of 77 Europe***) Americas Asia/Pacific ***) Includes both Insurance Europe and Retail Banking Retirement Services remain growth area • • • • • • • • • • Total value new business from retirement services increases by 56% • Europe +56%, Americas +30%, Asia/Pacific +91% Assets +13% to EUR 223 bn on year-on-year basis Premium/inflows +8% to EUR 34 m thanks to Asia/Pacific Value new business from pension business in US up 47% Japan and Korea leading in Asia/Pacific’s growth and value creation VNB in the Netherlands rises thanks to focus on profitable growth Ongoing strong growth and value creation in Central Europe Profit before tax year 2005: EUR 1,923 m Favourable increase compared with 9m 2005 (EUR 1,306 m) Main contributors: • US: EUR 648 m • Netherlands: EUR 639 m • Belgium: EUR 127 m • Korea: EUR 123 m Additional information 12 months 2005 75 of 77 Profit before tax EUR m 1,923 770 180 Total Pensions Americas Asia/Pacific 973 Europe*) *) Includes both Insurance Europe and Retail Banking Upward trend in VNB from Retirement Services Value new business from Retirement Services by quarter 170 160 EUR mln 124 115 94 99 98 75 51 -20% +85% 25% of 2003 Q1 2004 +31% Q2 2004 +1% Q3 2004 +16% Q4 2004 +8% Q1 2005 Q2 2005 +29% Q3 2005 +72% +63% +65% +22% +95% Additional information 12 months 2005 76 of 77 +6% Q4 2005 Certain of the statements contained herein are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements due to, among other things, (i) general economic conditions, in particular economic conditions in ING’s core markets, (ii) performance of financial markets, including emerging markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates (viii) general competitive factors, (ix) changes in laws and regulations, (x) changes in the policies of governments and regulatory authorities. ING assumes no obligation to update any forward-looking information contained in this document. www.ing.com Additional information 12 months 2005 77 of 77
