As an international financial services provider, ING operates within the context of foreign laws and regulations, and with corporate and private customers from a range of backgrounds and cultures. It is important, therefore, that ING respects diverse cultures, while maintaining adherence to these Business Principles.
Firm profit growth in 2003 — 60 million clients can count on ING — Investing in ING Direct, insurance in developing markets and pensions as ING’s specialities — ‘Bank of the Year’ in the field of corporate social responsibility — Modernisation of ING’s corporate -governance structure — Successful ING Globerunners Programme — Leaving behind a solid company with an international team led by Michel Tilmant
Brussels Stock Markets. Short-term and longterm options on ING Group depositary receipts for ordinary shares are traded on the Euronext
In addition to financial press releases, ING also publishes a Shareholders’ News and Shareholders’
At www.ing.com/group shareholders can find up-to-date information on ING, such as the agenda for the Shareholders’ Meeting
Asset management is ING’s third core activity alongside insurance and banking. These activities are coordinated on a global basis and include investment and account management for institutional investors, ING’s real-estate and equity-investment activities, the management of ING mutual funds, and asset management on behalf of the ING insurance companies. The investment-management operations are integrated in the three regional executive centres, while the other assetmanagement entities are part of ING Europe.
ING Capital Life (ICL) is the first foreign-invested insurance provider in Dalian (northern China). This is the second life insurance operation
ING’s pension business encompasses all financial instruments that are intended to secure a stable retirement income such as life insurance, annuities, pension funds, 401K and related retirement saving plans, long-term savings, mortgages and mutual funds. ING also advises governments on pension reforms, participates in international research projects and provides information to create awareness of the need for adequate pension provisions.
Supervisory Board. It was decided to set the maximum term for members of the Supervisory
and Poland (ING Bank Slaski) are still far below target. The efficiency ratio (excluding ING Direct and restructuring expenses) improved from 69.8% to 67.4% year-on-year.
All these measures resulted in a more favourable capital position for both the insurance company and the bank. At the end of 2003, the capital base of ING’s insurance units amounted to EUR
EUR 923 million profit before tax. The comparable figures for the non-ING-branded labels were
Europe. Due to the international presence of many of its European clients, ING Wholesale also services these clients in the Americas and Asia.
Americas. ING’s first priority is to improve returns, profits and efficiency. To strengthen customer and distributor relationships is the second business priority. Third, ING aims at strengthening its
York concluded that awareness of the sponsorship increased fourfold, while all important brand attributes – for example fresh thinking, innovative products and purchase consideration – saw a dramatic rise. This elevation of brand in the
ING Investment Management ING Investment Management (ING IM) benefited from the reorganisation, initiated at the end of 2002, which led to three regional investmentmanagement units. The close alignment with the distribution channels which followed from this helped ING to anticipate clients’ needs better and to improve its product offering. The global investment platform was also set up after the reorganisation. It has proven to be a stimulus for cross-regional sales and for leveraging investment expertise.
Investment-management activities are carried out for institutional investors who want to spread their property investments. As an investment manager ING Real Estate launched new funds in 2003, such as the ING Clarion Real
Filo, two large real-estate development companies in Spain, much effort was spent on integrating both companies in the existing organisation.
Finance offers a wide range of products from mortgages, project finance, construction finance and leasing arrangements to syndicated loans. The Finance activities made a considerable contribution to ING Real Estate’s result with significant portfolio growth. In June 2003, ING
Earning the trust of each stakeholder, a prerequisite for business success — ING endorsed the Equator Principles — ING introduced its own corporate social responsibility statements — Initiatives to bring CSR to the attention of analysts and investors — Sponsoring, charitable donations and volunteering to strenghten the bond with community — ING adopted new general procurement terms and conditions with ethical clause
Engaging business suppliers Another dimension to ING’s CSR commitment is the desire to treat its business suppliers in an ethical way and to encourage them to adopt more sustainable forms of business. In 2003, ING
wants to demonstrate that ethical business practices are important to the Group and expects them from all its suppliers worldwide.
During 2003, ING participated in a study carried out by the World Economic Forum that examined attitudes about CSR among mainstream investors and analysts. ING will continue to bring CSR issues to the attention of analysts and investors and try to change attitudes in the mainstream investment community about the importance of CSR.
Debtor provisioning The banking credit portfolio is under constant review. A formal analysis takes place on a quarterly basis to determine the provisions for possible bad debts, using a bottom-up approach. ING
Through scenario analysis ING Insurance measures the potential changes in the expected earnings of the insurance operations over the next 12 months resulting from an instantaneous increase/decrease in equity markets by 10%.
Summary of annual figures and Additional information This chapter includes a summary of the annual figures. The summary starts with the consolidated balance sheet and profit and loss account as well as the consolidated statement of comprehensive net profit and the condensed consolidated statement of cash flows. The main items of the balance sheet and profit and loss account are specified in explanatory notes, which also include the geographical analysis of income and profit before tax.
The complete Annual Accounts and related Other information are published as a separate document in conformity with the statutory requirements as stipulated in Part 9, Book 2 of the Dutch Civil Code.
In 2003, ING Group acquired an additional 30% stake in DiBa (Allgemeine Deutsche Direktbank) from
Salaries, pension and social security costs 2,735 2,764 4,694 4,787 7,429 7,551
Additions to the provision for investment losses 163 664 163 664
ING Group applies the Risk-Adjusted Return on Capital (RAROC) framework for its banking operations to consistently measure performance on a risk-adjusted basis (which is linked to shareholder-value creation). RAROC increases focus, in the decision-making proces, on rewards versus risk and consequently the use of scarce capital in the most efficient way. Risk-adjusted pricing tools are used as a basis for the pricing of transactions and as an important determinant in the credit-approval procedures.
ING Group According to an agreement (‘Protocol’) between the Dutch Central Bank and the Pension & Insurance
Tabaksblat Code as much as possible. Depending on how the best practices are interpreted, on any subsequent recommendations that may be made by the Tabaksblat Committee, on legislation on various aspects of the Code and on possible further discussions within ING, the Group is expected to diverge materially from the best practices of the Code in the following respects: – Code II.2.7: “The maximum remuneration in the event of dismissal is one year’s salary
– Code III.3.4: The number of supervisory boards of Dutch listed companies of which an individual may be a member shall be limited to such an extent that the proper performance of his duties is assured; the maximum number is five, for which purpose the chairmanship of a supervisory board counts double.”
Shareholders in 2002. It is available for inspection at the ING Group offices and on the ING
Board were granted ING option rights during their previous membership of the Executive
Group: April 2003. Current term of office: until the 2007 AGM.
Other directorships of listed companies: – Member of the Supervisory Board of Royal
Mr. Eric Bourdais de Charbonnière (1939, French nationality) will be proposed for appointment to the Supervisory Board. He was the former Chief
The amendment to the Articles of Association has also resulted in a change in the composition of the Board of the Stichting. Executive and
The increase came about as follows: Add: re final dividend for 2002 68,574,068 re interim dividend for 2003 54,212,677 re options Bank Brussels Lambert 407,119 exercise of Warrants 130 conversion of shares into depositary receipts 29,859
Nederlandse Gemeenten (Building society Dutch councils), several supervisory directorships); Huib Blaisse (lawyer and partner at Schut en
In addition to the financial targets, part of the short-term incentive award is based on individual performance, assessed on the basis of predefined measurable targets set for each senior executive. These targets depend on the specific responsibilities of the individual and are determined and assessed by the Supervisory
Group performance did not meet the targets set, so that over 2002 no short-term performancerelated bonuses were paid (contrary to 2003).
Remuneration and Nomination Committee and approved by the Supervisory Board. Individual performance has been assessed by the chairman of the Remuneration and Nomination
(3) Fair Market Value of Long-term Incentive reflects the fair market value of the long-term incentive award using the Black and Scholes methodology
STOCK OPTION PLAN ING Group has granted option rights on ING
Group Executive Board will take a decision as to whether the option scheme is to be continued and, if so, to what extent. Option rights granted will remain valid until expiry date, even if the option scheme is discontinued. The option rights are subject to certain conditions, including a certain continuous period of service. The exercise prices of the options are the same as the quoted prices of ING Group shares at the date on which the options are granted.