Total assets under management rose by 2% to  513 billion.
Aeltus Group, a new institutional investment management firm that combines two existing
In 2001, all wholesale operations, including corporate and investment banking and group insurance, were combined under the
Further restructuring is underway to bring the cost base in line with the changed market conditions.
I N G D I R E C T: A N O T H E R Y E A R O F
S T R AT E G I C A L L I A N C E W I T H
Piraeus Bank agreed on a strategic alliance in the Greek market.
Between them, the two partners have local market shares of 14%
in life insurance, 10% in banking and 8% in asset management and will distribute their products through 2,500 agents and 300 bank branches.
ING Australia and ANZ Bank agreed on a joint venture in funds management and life insurance in Australia and New
Life premiums as a % of total premiums 64 68 69 69 70
‘ING in Society’, which documents our policies in the field of corporate responsibility, sustainability and business principles. ING’s selection as sustainability leader for the financial sector in the 2001
A cornerstone of our social and economic policies is that we aim for an optimal balance between the interests of all our stakeholders.
America and we hold the number two spot in Asia. And we aim to be one of the world’s ten largest asset managers.
We have also made headway in strengthening our position in several key business lines. Our life insurance operations again recorded double-digit revenue growth with a substantial contribution from our blossoming businesses in developing markets. The return to savings in a weak stock market was reflected by the spectacular development of ING Direct, which, just as in 2000, more than doubled its number of clients to 1.75 million and its funds entrusted to  18 billion. Our employee benefits and pensions operations in
Europe and the US also expanded their portfolios substantially in line with the increased demand for wealth accumulation products and services. In a difficult market, our assets under management continued to grow, exceeding  510 billion. We advise governments of several countries in reforming their pension systems.
Though our attention was primarily focused on integrating the major acquisitions of recent years and restructuring our wholesale activities, we were able to strengthen our position in a number of core markets. In Poland, we acquired 88% of the shares in Bank Slaski.
In Germany, we agreed to increase our stake in DiBa, the number one German direct bank, to 70% and in Mexico, we obtained full ownership of the leading insurer Seguros Comercial América.
A joint venture with a well-established local partner can be a very effective entry strategy. We did that to enter the life markets in India and China. We broadened our presence in Greece through a partnership with Piraeus Bank and we intend to do the same with ANZ Bank in Australia. In Canada, we improved our position to become the largest non-life insurer through co-operation with Zurich and in Germany we entered into a partnership in the important field of pensions.
It is rewarding to team up with partners who share our vision of com-
STR ICT COST CONTROL , I S OUR TOP PR IOR ITY IN 2002
New synergies are pursued every day and co-operation has become an innate element of our corporate culture. This expertise gives us a lead on the increasing number of competitors that have subsequently chosen to walk down the same path.
Our goals for 2002 are clear. Performance improvement, both through ongoing revenue growth and strict cost control, is our top priority. Completing the integrations of our US and wholesale businesses is another main objective. Operational excellence and synergy are also key words that feature prominently in the strategy section of this report.
At this moment it is too early for a profit expectation for 2002. The Executive Board is positive, but cautious about the economic outlook for the year ahead. Given the uncertainty about improvement of the economies in which ING is active, we consider it prudent not to make a profit forecast for 2002 yet.
ING Group is a global financial institution of Dutch origin offering banking, insurance and asset management to over 50 million private, corporate and institutional clients in 65 countries. With a diverse workforce of over 110,000 people, ING comprises a broad spectrum of prominent companies that increasingly serve their clients under the ING brand.
ING’s strategy is to achieve stable growth while maintaining healthy profitability. The Group’s financial strength, its broad range of products and services, the wide diversity of its profit sources and the good spread of risks form the basis for ING’s continuity and growth potential. More than 70% of ING’s shares are held by investors outside the Netherlands.
ING seeks a careful balance between the interests of its stakeholders: its customers, shareholders, employees and society at large.
It expects all its employees to act in accordance with the Group’s
ING aims to be a top-10 global financial institution. Through a variety of ING companies – managed by the Executive Centres ING
Europe, ING Americas, ING Asia/Pacific and ING Asset Management – ING wants to deliver added value to clients in banking, insurance and asset management. ING wants to ensure operational excellence, achieve synergies and emphasise cost control within one
ING used to be a group of companies, each having a substantial degree of autonomy and often working under its own name and logo.
Some of these brands were nationally known, while others had mainly a regional reputation.
T O W A R D A G L O B A L I N G B R A N D
They added ING to their name to take advantage of the strength of the global
ING’s presence in the US market. The campaign was well-received by ING’s distributors and customers. It was rated the third best advertising campaign of 2001 in the US financial services industry. In the first three months ING USA
Bank Slaski and Nationale-Nederlanden were the main brands of ING in
ING Focus Fund. ING Emerging Markets Equity Fund. ING Internet Fund. ING European Equity Fund. ING Small Cap Growth Fund. ING International Equity Fund. ING Mid Cap Growth Fund. ING Tax Efficient Equity Fund. ING Large Cap Growth Fund. ING Global Brand Names Fund. ING Growth & Income Fund. ING Global Communications Fund.
ING is active in 65 countries and ranks among the world’s largest 15 financial services companies in terms of market capitalisation.
A strong brand can also help to attract the best employees, facilitate synergies and foster one corporate culture within the Group.
Furthermore, one brand creates considerable long-term cost savings as maintaining and promoting one brand is much cheaper than 70 individual brands.
Advertising campaigns in very different markets, all using the strength of the ING lion: USA,
The move toward a global brand is endorsed by the entire top management of ING.
ING brand manager stimulates and guides the transfer. A Global Branding Committee with brand specialists and senior managers from all over ING coordinates the rebranding and repositioning initiatives together with a dedicated Branding Department.
ING has not chosen to pursue a ‘big-bang scenario’, but rather a gradual approach with pilot projects that offer valuable lessons for the continuation of the process. The companies in the Americas, South, Central and
Netherlands carry an ING endorsement as their first stage toward rebranding.
Similarly, the repositioning route toward the desired brand image is carefully determined for each business unit. Panels with internal and external participants from all over the world, supported by numerous studies, defined the required brand positioning to distinguish ING from its competitors.
They will have to live the brand. Communication and training programmes ensure that the employees embrace the brand values.
Special courses at the ING Business School, a brand and reputation intranet site, brand books and videos will be available in the course of 2002.
The whole rebranding and repositioning will take years. Gradually, stakeholders will experience that ING makes a difference in the world of financial services.
ING Life Taiwan launched a brand awareness campaign, while ING Bank in the Netherlands used the introduction of the euro to profile itself in a very competitive market.
C O M P O S I T I O N O F T H E B O A R D S as at 31 December 2001
North America has always been one of ING’s most important international markets. ING is concentrating on selling life insurance, pension and investment products.
Canada, ING is the largest nonlife insurer. The privatisation of the pension system in various
ING was the first European company to start a life insurance company in Japan, Taiwan and South Korea. Meanwhile, the ING companies have built up good market positions in these countries, further strengthened by the acquisition of
Banking products for the retail and small and medium-sized enterprises have been added over the years.
I N V E S T I N G – M U T U A L F U N D S , S E C U R I T Y B R O K E R A G E ING offers a wide array of investment products, such as country and sector mutual funds, either ING funds or third-party funds, and various forms of security brokerage.
W H O L E S A L E C L I E N T S
PAY M E N T S – C A S H M A N A G E M E N T Optimisation of cash flows can liberate money tied up in numerous local bank accounts for more productive uses. ING’s know-how and experience translate into effective solutions.
I N V E S T M E N T B A N K I N G ING offers a comprehensive and integrated range of investment-banking products, tailored to suit the needs and balance sheets of corporate clients in Europe, Asia and the Americas.
ING’s range of services includes corporate finance, M&A advisory, origination of capital-markets products and securitisation.
F I N A N C I A L M A R K E T S Corporate and institutional clients can rely on
F U N D A D M I N I S T R AT I O N S E R V I C E S Enabling investors to outsource non-core functions, ING provides a comprehensive range of fund administration, custody, trust, banking and accounting services.
P R I VAT E E Q U I T Y ING has several specialised units that offer opportunities to make direct or indirect investments in unlisted securities.
W A R R A N T S E X P I R E D
Until 15 March 2001, fourteen ING Group warrants and additional payment of  61.71 could be exchanged for five (depositary receipts for) ING
I S S U A N C E O F C F C E R T I F I C AT E S T E R M I N AT E D
With effect from 2 July 2001, the bearer depositary receipts for ordinary shares and preference shares
certificates, but only in book-entry form. These bearer depositary receipts are now incorporated in two global depositary receipts which will be held in custody by the Nederlands Centraal
Amsterdam, Brussels, Frankfurt, Paris, the Swiss exchanges and the New York Stock Exchange.
ING Group depositary receipts for ordinary shares are traded on Euronext Amsterdam
A stock split in a ratio of 2:1 was effected on 2 July 2001, approved by the Annual General
The exchange ratio of the warrants B, issued on 5 January 1998, has been adjusted as follows: with an additional payment of the (unaltered)
entitles the holder to two ING Group (depositary receipts for) ordinary shares up to 5 January 2008.
Significant Interests, three holders of depositary receipts with a (potential) interest of between 5% and 10% in ING Group were known as at 31 December 2001. They were ABN AMRO,
PRICES DEPOSITARY RECEIPTS FOR ORDINARY SHARES Euronext Amsterdam, in euros 1 Based on the share price at the end of December and net operational profit per ordinary share for the financial year.
(Depositary receipts for) ordinary shares of EUR 0.24 nominal value 1 ,970 .5 1 ,992 .7
(Depositary receipts for) own ordinary shares held by ING Group and its subsidiaries 54 .8 69 .1
Internet site of ING. The Central Works Council of ING discussed the report and was also positive. The report also fulfilled an important function in creating a framework for further dialogue with our stakeholders. The ING in Society report illustrates how
ING handles the interests of each group of stakeholders. We seek to find a careful balance between the interests of all our stakeholders.
In addition to clients, shareholders and employees, ING sees society as its fourth major stakeholder. The Group aims to act as a responsible international company that pays attention to the social and environmental consequences of its activities. Building on good and long-standing relationships with local communities is one of the priorities in the coming years.
ING’s employees are expected to act in accordance with the ING
Principles. Throughout ING, the Business Principles introduction and training programme was communicated to staff and management. Many ING managers attended the ING Business Principles programme at the ING Business school. Through this extensive training programme the ING Business Principles have increasingly become a regular part of the day-to-day business at ING.
I N T E R N AT I O N A L R E P R E S E N TAT I O N
This organisation is a growing force in developing sustainable policies for the international business community. ING participated in many other international organisations, such as the brand it is essential to maintain the confidence and trust of our clients by showing the added value that ING can create to the well-known company names. The newly branded companies are committed to act according to the high ING standards regarding sustainability, corporate values and business principles.
Management System has been operational in the Netherlands. In the coming years, ING will extend its international reporting practices by implementing reporting standards on social, environmental and safety performance in all its business units. Gradually, while accumulating more data, ING will be able to broaden and deepen the coverage of its reporting practices. In 2001, a new global compliance incident registration system was developed to monitor and register compliance risks. ING’s International Credit Risk Management
S U P E R V I S O RY B O A R D M E E T I N G S
The annual retreat of the Supervisory Board and the Executive Board in January was almost entirely dedicated to the Medium Term Plan 2001 – 2003. During the other four meetings, the development of the results was central to the discussion. In the third quarter, the downturn in the economy became increasingly visible in the
ING results, which, combined with the consequences of the September 11 events, led to a downward adjustment of the profit forecast for the whole year. Other subjects of discussion included management development, the share split, the adjustment of the profile of the Supervisory
The Supervisory Board further discussed subjects such as the integration of ING Barings in ING
Several general managers gave presentations about their business units, which also provided the Supervisory Board an insight into the management potential under the Executive Board. The largest Dutch business units, the activities in
Central Europe and the developments in the field of Operations/IT came up for discussion.
S U P E R V I S O RY B O A R D C O M M I T T E E S
The purpose of both Supervisory Board committees – the Audit Committee and the Remuneration & Appointments Committee – is to discuss specific subjects in depth and to advise on these to the full Supervisory Board. The Audit
Committee discussed the annual results and the six months’ results, the reports and management letters of the external auditors, the provision policy and risk management. In October, an extra meeting took place to discuss the impact of the events of September 11 and the further deterioration of the economy, after which it was determined that a downward adjustment of the profit forecast for 2001 was inevitable.
Executive Board including their compensation and the disclosure of the remuneration of the
The composition of the Executive Board did not change in 2001. During the Annual General
Messrs. Berghuis and Kamminga will retire as members of the Supervisory Board after having reached the maximum term. Mr. Karel Vuursteen is proposed for appointment to the Supervisory
Chairman of the Executive Board of Heineken until 25 April 2002. He has been proposed for appointment because of his experience as chairman of a multinational, his knowledge of the international business world and his branding expertise. After internal deliberations Ms. Van den Berghe and Messrs. Herkströter, De Meester,
R E P O R T O F T H E S U P E R V I S O R Y B O A R D
Nederland. His role as Supervisory Board member was characterised by his special connection with small and medium-sized enterprises and the independent-insurance broker system, also after he became a member of the
His departure calls for a special word of gratitude for his attention to the significant importance of the Dutch business units and the interests of their clients.
T H E S U P E R V I S O RY B O A R D A N D
ING and will continue to dedicate themselves to ING on the basis of their different backgrounds. The Central Works Council has met with Mr. Vuursteen and with each Supervisory
Board member who is proposed for reappointment and has given its concurring advice to the proposed appointment and reappointments.
The weaker economy and depressed equity markets drove up risk costs and strongly reduced fee income in investment banking, asset management and equity-linked insurance products. ING
P R O F I T G R O W T H
 0.07 per share (after funding costs) to the net result. The operational net profit from banking declined by 13.1% from  1,660 million in 2000 to  1,442 million. In view of the deteriorated economic situation the loan loss provisions were strengthened by  750 million, equalling 32 basis points of credit-risk-weighted assets, compared to the very low level of  400 million (19 basis points) in the year before.
Total revenues, including ReliaStar, Aetna Financial Services and Aetna International, reached
The world-wide economic slowdown, the decline in equity markets and the September 11 events had a negative impact on
ING’s 2001 results. However, ING’s broad mix of businesses proved essential to conclude this difficult year with a 6.1%
The improvement reflects a higher operational net profit and a substantially lower capital base, mainly caused by the write-off of goodwill and the revaluation of the equity investment portfolio.
ING Europe reported an operational pre-tax profit of  4,188 million, a decrease of 7.8% from a year earlier. The result from insurance went up 2.4% to  2,252 million, but the banking operations saw their operational result before taxation decrease to  1,936 million (-17.4%).
Trade Center attacks. The Canadian operations and the businesses in Latin America (except
I N G A S I A / PA C I F I C
The consolidation of the Aetna International businesses in the region was to a large extent responsible for the high percentage increase.
ING Asset Management saw its pre-tax operational result decrease by 18.5% to  264 million as falling equity markets affected management fees. However, total assets under management increased 2.0% to  513 billion. A net inflow of new assets under management of  41 billion, first time inclusions of  11 billion and a positive effect of  5 billion from exchange rate fluctuations more than compensated for revaluation declines.
G R O U P O B J E C T I V E S
D I S T R I B U T I O N A P P R O A C H A N D A C U S T O M E R - C E N T R I C O R G A N I S AT I O N
ING has also built up special expertise in offering employers a wide range of employee benefits in combination with sophisticated administrative support. The combination of European and US expertise makes ING particularly well-positioned to play a leading role in providing solutions to the universal dilemma of offering adequate retirement provisions for an ageing population.
The ING Direct concept, which starts with a high-interest retail savings account and is gradually broadened with other products, has turned out to be highly successful in six countries. Both the number of clients and the funds entrusted more than doubled again last year.
ING intends to launch ING Direct in one or two additional countries in the next few years and extend its presence in the US.
In the past, the management and strategic development of ING Group were mainly governed by the insurance and banking structures of the original merger partners.
As the international operations have increased in size and scope and as the integration of insurance, banking and asset management has progressed, the managerial and strategic focus has shifted to the four Executive Centres. ING has defined strategic objectives for each Executive Centre (EC). These objectives, as well as the plans that have been developed to achieve them, are discussed in the EC chapters. In addition to the specific EC objectives, ING has a number of Group objectives that relate to all its activities as well as financial targets for profit growth, profitability and efficiency.
Financial services providers that succeed in outperforming their peers in cost control, will be the winners in the financial sector in the years ahead. ING will have to intensify its current cost reduction measures without sacrificing investments in projects that will generate future cost savings, such as the shared service centres.
In the early years of ING’s existence, most synergy projects were based on largely voluntary co-operation between business units. In 2001, ING moved from voluntary to committed synergies and made the variable component of the remuneration of senior managers partly dependent on the synergy contribution of their business unit to the Group.
In addition to numerous smaller commercial initiatives, five main synergy projects have been defined: the integration of the European wholesale banking operations, the creation of shared services centres in Europe, the global co-ordination of corporate IT and procurement, the integration of the US retail businesses and the integration of the Aetna and ING operations in Asia and Latin America.
Currently, some of these projects still require considerable investments. Over the years, these investments will start to pay back so that significant, structural benefits can be generated in the longer term.
In Operations/IT ING continues to rationalise its infrastructure by consolidating data centres, outsourcing global networks and reducing redundant IT assets.
ING’s application strategy is to seek more common solutions that are maintained centrally but deployed locally. Leveraging internet technology and applying a consistent e-business approach will enable
ING to deliver more web-based solutions for customers, employees, suppliers and strategic partners.
ING as a company with innovative approaches and solutions to financial services. As economic insecurity increases, people are looking for trust. In these times it is therefore essential to invest in a strong corporate brand and to make it trustworthy. The implementation of the branding and repositioning plans is closely connected with ING’s efforts to foster one ING culture. Branding is all about corporate culture and change management. The branding/repositioning project will prove a success if our customers throughout the world are presented with a company with a similar face, attitude and look and feel.
F I N A N C I A L TA R G E T S
1 . P R O F I T G R O W T H : A N AV E R A G E A N N U A L G R O W T H O F O P E R AT I O N A L
Due to the economic downturn and the losses from claims relating to the attacks on the World Trade Center, ING recorded an increase of 5.3% in operational net profit per share, which is considerably below the target. However, on a longer-term basis, ING continues to meet this target. Since its creation in 1991, the compound annual growth rate in profit per share has been 13%.
2 . P R O F I TA B I L I T Y: A N AV E R A G E A N N U A L O P E R AT I O N A L N E T R E T U R N
With an ROE of 18.4% ING met this target in 2001. An important factor was that the Group’s equity, which had already been considerably reduced in recent years due to the write-offs related to acquisitions, further declined in 2001 as a result of downward revaluations in the investment portfolio due to the decline in worldwide stock markets.
ING believes that the US economy has bottomed out and is on its way to gradual recovery in the second half of 2002. Fiscal and monetary stimuli in the US will support economic growth and consumer spending, leading to a rise in equity markets. ING sees attractive opportunities in savings, pensions and employee benefits in the US.
While growth in domestic product (GDP) is expected to pick up, it will be sub-par for most of 2002. For 2003 and 2004 a recovery of the
US economy to its long-term potential growth rates seems likely. As the recovery kicks in and short-term rates rise, long-term rates can be expected to increase (moderately) from current levels. The crisis in
Argentina is severe, but contagion to other countries has up to now been relatively limited. ING believes that in the long term there are good opportunities in Argentina.
The growth potential of the US economy is estimated to be higher than that of the European Union. As a result of demographic changes
(the ageing of the population), the financial prospects of many social security systems in Europe are not that rosy. Especially state pension schemes are under pressure and reforms are inevitable. Governments are diminishing their role in this area, which opens up a market that private parties are eager to enter. Besides, fringe benefits are growing in importance. These developments create opportunities for ING in the field of life insurance, savings, pensions, employee benefits and asset management.
The Executive Board is positive, but cautious about the economic outlook for the year ahead. Given the uncertainty about improvement of the economies in which ING is active, the Executive Board considers it prudent not to make a profit forecast for 2002 yet.
On the retail side, strategy focuses on retail wealth accumulation and financial protection (i.e. retail banking, asset management, asset gathering, life insurance and pensions) and private banking, supported by the click-call-face (multi-product, multi-channel) distribution approach. In the home markets of the Netherlands, Belgium and Poland, the strategy is wealth accumulation supported by an efficient mix of channels appropriate to client segments and products, and focused on cost reduction. In the large mature markets ING is developing its retail position around ING Direct, selectively and carefully adding new activities and face channels as appropriate. In the developing markets, particularly Central Europe, ING wants to become a market leader in pensions, life and wholesale banking by leveraging its market value, including via distribution alliances.
In terms of profit contribution, Europe is ING’s most important geographic region. The Benelux is a key profit generator, but it is a small and mature market. A core objective of ING Europe is, therefore, to expand ING’s home base, making it possible to compete on an equal basis with other companies that already have a ‘natural’ home base of similar size. To achieve this, ING
will increasingly seek scale and growth in Europe in the coming years while simultaneously trying to extract high value from the existing global franchise. ING Europe, after all, not only refers to ING’s European activities, but also to ING Direct and wholesale banking, which are global businesses.
N E W S T R U C T U R E
A major accomplishment in the year 2001 was the smooth transition toward an integrated European organisational structure. The new ING Europe is structured along the main functional areas of Retail, Wholesale, Operations/IT and ING
With the new European organisation in place, the management of Retail Europe works together with the regions to set the priorities for future growth. In particular, this includes developing a common set of retail value drivers: scale, cost, cross-sell, value of new business and customer satisfaction. A lot of attention went to the integration of the retail activities in The Netherlands, the implementation of our click-call-face strategy around ING Direct in large mature markets and country-by-country measures to improve scale, including by way of financial advisors in Central
ING Europe, functionally combining the private banking businesses of BBL, ING Bank Nederland, CenE Bankiers, BHF-Bank and ING Baring
ING Direct is a crucial part of ING’s retail strategy. The strategy of ING Direct is to be a low-cost provider of financial services in large mature markets by offering its clients best value for money and excellent service via call-centers and the
Internet. ING Direct uses a high-rate, no-fees, no-minimum savings account as an entry product, and with this product alone ING Direct is able to exceed the ING Group profit hurdle rate. After reaching a minimum customer base, ING Direct business units complement the savings account by cross-selling a focused range of other financial products concerned with wealth accumulation: mortgages, mutual funds, e-brokerage, pension and life insurance.
Measured by retail funds entrusted, ING Direct is now a top-10 bank in Australia, Canada,
France and Spain. Two of the six ING Direct operations (Australia and Canada) are now profitable.
I N G W H O L E S A L E
ING Bank, BBL, BHF-Bank, the wholesale insurance activities of Nationale-Nederlanden and the specialised subsidiaries of Charterhouse,
Ferri and Vermeulen-Raemdonck. ING Wholesale now includes three functional areas (Corporate
Within Corporate Financial Services, fully integrated departments were formed during the year for Global Clients, Corporate Clients, European
Faster than expected growth of ING Direct in terms of number of clients and funds entrusted.
exist and at least two new units will be opened in the forthcoming year.
The market environment was generally very difficult in 2001, with significantly reduced activity throughout the industry. Anticipating the current modest market conditions, the business was restructured early in 2001 resulting in significant cost reductions.
Financial Markets falls into three major segments: Treasury, Strategic Trading, and Sales,
Trading and Research. Overall, Financial Markets had a strong performance in most of its core businesses and regions. The businesses of Treasury, Debt Markets and Foreign Exchange posted particularly positive increases in profit. Depressed market circumstances resulted in an Equities deficit overall. However, the Equities businesses in the Netherlands, South-West Europe and
During the year 2001, ING Europe refined its plan to upgrade IT and Operations as the bedrock for greater operational efficiency. That year saw the first wave of implementations. Several shared service centres were established in Banking
In Central Europe a retail banking shared service centre was set up.
The Netherlands as ING’s original home base is still one of the key markets. Nationale-Nederlanden is market leader in insurance, while ING
Westland/Utrecht mortgage bank into a real estate finance unit within ING Real Estate and a retail mortgage bank. The retail mortgage bank will be combined with other units to create an ‘intermediary bank’.
tions. As the independent intermediaries play an important role in distribution in the Netherlands we also intend to strengthen their position by improving our support.
S O U T H - W E S T E U R O P E
ING’s activities in South-West Europe comprise business units in Belgium (all financial services),
For ING in Germany, the year 2001 was a year of restructuring for BHF-Bank. The risk profile was significantly reduced, while at the same time new business lines were developed. The ING platforms approach for corporate banking and financial markets was put into place. BHF-Bank, BHW
has the objective of securing a market share in pension products related to both individual and group pension schemes. Since DiBa decided to apply the same strategy as ING Direct, strong growth was realised in Germany.
Bank Slaski in Poland, all banking activities were integrated into ING Bank Slaski (no. 5 market position), in which ING has an 88% stake at present. All life (no. 3 market position), employee benefits and pension activities (no. 2 market position) were integrated in Poland. The Polish
Pension Fund showed a strong increase in profit as well as in assets under management. Employee
Czech Republic the first ‘Orange House’ opened, which is the physical location in which the retail and small & medium-sized enterprise clients are serviced according to the click–call–face concept.
We will seek scale and growth in Europe, while simultaneously extracting high value from wholesale banking, a global business with a European focus, and ING Direct, which has operations in Europe,
Europe, predominantly through leveraging market value, however without losing sight of the opportunities to improve our relative position.
In the Americas region, the US domestic investment banking business of ING Barings as well as the US domestic business of BHF-Bank were sold successfully. Costs and headcount were reduced. In Latin America three branches were transformed into representative offices. The integration of the various labels created more commercial possibilities.
A S I A (wholesale banking, l inked to EC Europe)
Europe Retail’s primary goal is to continue stable growth in the home markets (the Netherlands,
YEAR-END 2000 YEAR-END 2001 YEAR-END 2000 YEAR-END 2001 portfolio of long-term sustainable positions in emerging markets.
Private Banking has been established as a new business line within EC Europe, functionally combining the private banking businesses of
ING Direct will strive for further growth by expanding its geographic coverage in the USA
ING brand in 2002. Rebranding will reinforce and reflect ING’s integrated wholesale approach.
In Operations & IT, all initiatives will be focused on synergies to the fullest. The IT platforms will lead to lower costs, improved quality of service and reduced operational risk. A cost-efficient, modern Operations and IT environment will underpin the growth in business.
The mission of ING Americas is to continue to build strong integrated financial services (IFS) platforms in its core markets to satisfy the needs of ING’s customers by offering multiple products through a variety of channels. The five key strategies that were pursued in 2001 will continue to be the key strategies.
These strategies will drive ING Americas in building strong business platforms and a true IFS organisation.
During 2001 ING Americas focused on integration and branding after the acquisitions of Relia-
US alone, almost 200 projects were identified throughout the integration process. By the end of 2001, 94 projects – which included a common finance system and shared service organisation –
had already been completed. The rest of the projects are scheduled to be completed during 2002. All these integration efforts have achieved revenue and expense synergies planned for 2001 and are on track with business plans for 2002 expense savings. The next integration step in the
Americas further streamlined operations by moving its mutual funds business to US Financial Services to enhance cross-selling opportunities. In Latin America, the integration of Aetna
International with ING Latin America has almost been completed and all businesses are now wellpositioned to build strong financial platforms.
B R I N G I N G I T A L L T O G E T H E R – T H E I N G B R A N D
Following the strategy of the global brand positioning, ING Americas promoted its brand throughout the region to raise awareness of the
Our mission is to continue to build strong integrated financial services platforms in each of our core markets and satisfy the needs of our clients by offering multi-products through multi-channels.
ING Direct Café in New York: the success of attracting clients via the Internet and call centers combined with personal contact.
common Human Resources platform has been launched by which all employees can get the same
Afore Bital – under the ING Comercial América label. It also moved its acquired Aetna International insurance business in Chile under the
C A N A D A R E A L I G N M E N T
During 2001, ING continued to build a strong presence in Latin America with the integration of
In Mexico, through the mid-year completion of the Seguros Comercial América acquisition, ING
became the country’s leading private insurance company. ING’s combined retail operations in
In Buenos Aires, ING began construction of a new corporate office building in the city’s Puerto
Revenues and earnings were lower than expected due to weak economies and the World Trade Center attacks.
The Aetna International businesses were combined with those of ING in
South America to form the leading international insurance company on that continent.
ING web sites evolve throughout this year and beyond, they will begin to direct users to contact
The company’s overall goal for the coming year is to strengthen its business platforms in key countries that deliver revenue and earnings growth across a wide range of market conditions – and that ultimately lead to the region’s intent to be the consummate integrated financial provider. Fundamentally, the plan calls for continuing aggressive portfolio management, continued business restructuring, enhancing performance, lowering expenses, customer-focused product development as well as building the ING brand and culture.
ING Comercial América offers its insurance clients mobile assistance in Mexico City.
December 2000, all the Aetna businesses were fully integrated with ING’s businesses in the region in 2001. In spite of the significant integration efforts which distracted management focus throughout the year, the region delivered its profit target according to plan. Shifting toward one strong ING global brand is also part of the integration efforts. 2001 was marked by major rebranding and brand awareness campaigns throughout the region. Country platforms have been set up to build brand using combined scale to leverage cost structures and enhance revenue synergies.
form. An award-winning advertising campaign, centering on the “good man” image of ING
N E W O P P O R T U N I T I E S I N J A PA N
R E G R O U P I N G O F O P E R AT I O N S I N A U S T R A L I A
Results of ING Asia/Pacific fully met expectations, with good results in Korea,
ING Life Korea has become the fastest growing foreign life insurer in the country with 7% market share in new premiums.
Revenues in life insurance joint venture in Shanghai more than doubled.
ING is the fastest growing foreign life insurer with a 7% market share in new life premiums.
Malaysia in individual life insurance and maintained its leadership in employee benefits.
the restructuring includes all ING Australia’s life insurance, funds management and adviser operations. In terms of shared synergies, expertise and knowledge, Australia continues to serve as a regional hub, transferring its mature market skills to other ING businesses in developing markets of the Asia/Pacific region.
Bank, one of the leading banks in Australia, to form a joint venture in funds management and life insurance in Australia and New Zealand with a view to strengthen the competitive position of
ING Australia in the top of the financial services market. If completed as planned, the joint venture will rank fourth in terms of retail funds under management and will be the exclusive supplier of life insurance and funds management products to the ANZ Bank branch network and to ING Australia’s many distribution channels.
ING and Vysya Bank in India, established operations in Bangalore, Delhi and Mumbai after it was granted an operational licence by the Indian
A key priority is becoming a recognised e-leader in key markets. Through the use of the Internet and other digital technology, ING works to foster new and powerful relationships with its customers, agents, employees and partners by lowering costs per transaction and increasing revenue per customer, while at the same time increasing satisfaction and customer retention.
Altogether there are 24 on-going e-business projects across the region with many in the form of self-service platforms.
Asia/Pacific, which achieved its sales and earnings targets despite the deteriorating economic climate.
ING Asia/Pacific views itself as a financial product manufacturer and distributor, organising around operational excellence to build a customerfocused organisation throughout the Asia/Pacific region. Key will be staying ahead of competition and demonstrating expertise in addressing the negative elements, such as low equity markets and current low interest rates, that impact the business environment. The diversification of ING’s business portfolio across the region together with a close eye on expense levels will help to alleviate these economic adversities. All in all, ING Asia/
I N V E S T M E N T P E R F O R M A N C E U N D E R P R E S S U R E
For ING’s key funds, 53% performed better than their relative benchmark on a 1-year basis and 60% on a 3-year basis per 31 December 2001.
Although these investment performance statistics slipped slightly, ING’s performance against peers improved with 75% of the funds showing abovemedian (first or second quartile) performance on a 1-year basis versus 72% on a 3-year basis.
ING Asset Management is committed to delivering excellence in investment performance and client service quality through its ‘global investment
 324 million. A significant part of the decline was caused by lower results on seed capital invested to sponsor third-party private equity funds. ING’s assets under management still increased 2% from  503 billion to  513 billion thanks to a strong inflow of new funds ( 41 billion). The share of thirdparty assets declined slightly from 71% to 68%.
expertise, local client focus’ business model. By consistently meeting these commitments, ING
As of 2002, ING Asset Management’s private banking activities will be transferred to ING
After these transfers, ING Asset Management comprises a group of attractively homogeneous business units. Each activity is of a truly global character, combining global product sourcing with a global customer base. Throughout ING
ING Aeltus strengthened its managed-account business, resulting in substantial inflows of funds.
The different business units of ING Asset Management managed  181 billion in mutual funds.
and in Asia. ING Pilgrim successfully launched principal protected products in the US, which are managed by ING Aeltus.
In very difficult market circumstances, assets under management still increased by 2% from EUR 503 billion to EUR 513 billion.
ING’s key funds performed well against their peers with 75% of the funds showing above median performance on a 1-year basis per 31 December 2001.
Profit decline due to lower returns on seed capital and lower management fees.
L E A D I N G P O S I T I O N I N R E A L E S TAT E
ING Real Estate operates as asset manager, developer and financier. With  31 billion of assets under management, ING Real Estate ranks in the top three of global real estate asset managers.
The development and financing activities are in themselves highly profitable businesses, but they also support ING’s real estate asset management business. For example, the launch of the Ibérica
After making a public bid in November 2001 for the shares of Filo, a Spanish real estate and shopping centre developer and management company, ING Real Estate reached agreement with the four main Filo shareholders to acquire their stakes totalling 81.5% in December 2001.
The average profit growth of the development activities has been 2% annually over the last four years and further growth is expected. Currently, the portfolio of development projects under construction amounts to  1.3 billion. Several prestigious projects have been added this year, such as the Zlota project in Warsaw, the New York Times Tower project and the Gershwin project in Amsterdam.
In 2002, the wholesale real estate financing businesses of ING business unit Westland/Utrecht
Hypotheekbank and ING Bank will be transferred to ING Real Estate. With a loan portfolio of approximately  15 billion, the new combination will be leading in the Dutch real estate financing market. ING Real Estate expanded its international financing business, especially in Europe and the US. A notable area of growth is the design of innovative (off-balance sheet) financing structures for ING’s international client base.
N E W I N I T I AT I V E S I N A LT E R N AT I V E A S S E T S
‘Alternative’ investments – notably hedge funds and private equity – offer attractive performance characteristics and diversification benefits.
ING Aeltus expanded its hedge fund product range with a diversified fund of hedge funds. With
Private equity was affected by the deteriorating markets and the aftermath of the Internet bubble.
ING Aeltus launched two new private equity funds. Especially the ‘secondaries’ fund, which buys private equity partnership interests from investors who wish to reduce their exposure to this asset class, met good demand from institutional investors in the US and Europe.
At Parcom, the captive private equity company of ING Asset Management, substantial profits from its (middle market) buy-out business more than outweighed the losses from write-downs on some investments in young ICT companies.
S T I L L G R O W I N G
Assets under administration, in custody and held in trust, were  65.4 billion at year-end. The
ING Trust specialises in trustee services and the formation and management of offshore companies used for, amongst other things, tax planning, estate planning and asset protection. By acquiring
Asset management continues to be a highly attractive business for ING because growth prospects remain excellent and capital utilisation is low. In
A L E X A N D E R R I N N O O Y K A N
L E A D E R S H I P A N D TA L E N T M A N A G E M E N T
I N G B U S I N E S S S C H O O L
Business School in the Netherlands continues to flourish as a dedicated learning centre for ING
leadership. During 2001 ING Business School surpassed previous enrolments with over 1,100 participants. The courses continue to focus on the various technical aspects of our core businesses as well as leadership development. Key additions included “ING Mindset”, which was conducted in various satellite locations with the intention of bringing home the values, culture and reach of the ING enterprise. The ING
The ING Business School also provides the opportunity to network and share best practices
HUMAN RESOURCES R E P O R T O F T H E E X E C U T I V E B O A R D
ING’s success is determined by the quality of its people. Active in 65 countries, ING remains in the enviable position of being an attractive employer. In March 2002, Fortune selected ING
Development of talent, performance management and stimulating diversity defined as key issues in human resources.
One ING collective labour agreement for 34,500 employees in the Netherlands.
Clearly the advancement of women in leadership remains a top priority, yet we also realise that one size does not fit all. Our goal is to ensure that
C O L L E C T I V E L A B O U R A G R E E M E N T I N T H E
The differences in the employment conditions of the various business units of ING in the Netherlands were removed in 2001. Before that time, there were separate conditions for employees of
ING Insurance and ING Bank. This situation was corrected when ING introduced its own
Labour Agreement is the introduction of variable compensation based on performance management. In this way, ING has increased its appeal as an employer.
Thanks to the drive, commitment and expertise of our people, ING is wellpositioned to compete in the global market place.
On Executive Board level, the Risk Policy Committee evaluates and manages ING Group’s overall risk profile, aiming for a good balance between risk, return and capital. The principal risks that are monitored are credit risk, market risk, liquidity risk, actuarial and underwriting risks, operational risk and solvency risk.
The Basel Committee is planning to introduce a new capital adequacy framework called Basel II, which is to replace the original Basel Agreement from 1988. In January 2001, the second consultative paper from the Basel Committee was published, which incorporated the comments banks made in response to the proposals. During 2002, a further consultative paper is expected. Basel II is expected to be introduced in 2005. Within ING, various risk management units are preparing for the introduction of Basel II to make sure ING is completely compliant by 2005. The focus of ING’s preparations are in the areas of credit risk, market risk and operational risk management.
ING’s general credit risk policy is to maintain an internationally diversified loan portfolio, avoiding large concentrations. The emphasis is on expanding business within the European region by means of topdown concentration limits in the areas of country, individual borrower and industries. The focus is also on more relationship banking activities, while maintaining stringent internal risk/return guidelines.
I N S U R A N C E C R E D I T R I S K
RISK MANAGEMENT R E P O R T O F T H E E X E C U T I V E B O A R D
ING has comprehensive risk management procedures on all levels within the Group.
The country provision methodology is more closely linked to the risk definitions with respect to determining where the country risk occurs.
Some countries with perceptually high risk, but which have not yet defaulted, require no mandatory provisions. Instead of provisions, additional capital has to be allocated to transactions that incur country risk, the amount of which is a function of the risk of the country as well as the risk of the transaction itself. For countries that are near default or have recently defaulted, adequate provisioning remains a requirement.
The Dutch Central Bank continually monitors our policies with respect to capital allocation and provisioning for country risk. The table below shows the largest cross-border lending exposures in emerging markets.
ING’s policy is to maintain an internationally diversified and mainly client-related trading portfolio, while avoiding large risk concentrations. The emphasis is on expanding business in liquid markets. ING
applies value-at-risk and stress-testing scenarios for market risk management. Value-at-Risk measures the maximum overnight loss that could occur under normal market circumstances if the trading positions remain unchanged for a time interval of one day. Apart from market risks in its trading portfolios, ING Bank has a structural interest rate risk on its balance sheet. As at 31 December 2001, an increase in interest rates of 1% gradually during the year could potentially have an adverse effect on interest income of
I N S U R A N C E M A R K E T R I S K
Value-at-Risk measures longer-term volatility. As a number of business units is in the process of upgrading systems to report on the at-risk market risk measures, the total market risk exposure for the insurance operations of ING is measured using scenario analyses.
The insurance operations are exposed to interest rate movements with respect to guaranteed interest rates and policyholders reason-
able expectations with respect to crediting rates. Asset portfolios backing these liabilities are managed accordingly. The current product portfolio also comprises products where interest-rate risks are entirely passed on to the policyholder, thereby reducing ING’s exposure to interest movements.
The insurance operations are exposed to movements in equity markets since they have an impact on the level of charges deducted for unit-linked and variable business. A 10% decrease in stock market prices would lower the pre-tax budgeted result for the insurance operations in 2002 by 2.7%.
ING closely monitors its liquidity risk to maintain an adequate cushion to meet its financial liabilities when due. Liquidity risk is managed at Group and local level by a combination of existing investment mandates, guidelines for asset & liability management, specific limits for certain business units and Treasury policies and procedures.
A C T U A R I A L A N D U N D E R W R I T I N G R I S K S
ING’s policy is to minimise operational risks by raising the operational risk awareness among its management and staff, setting clear governance and implementing a periodic operational risk identification, assessment and mitigation process. During 2001, an operational risk management (ORM) governance framework was set up. ORM departments were established in the business units.
Detailed figures on regulatory requirements and ratios of the banking and insurance operations are given on page 64. A comprehensive chapter on risk management has been added to the separately issued
The printed documents can be ordered via the website, by fax (+31 411 652125) or by mail (P.O. Box 258, 5280 AG Boxtel, The Netherlands).
E R N S T & Y O U N G A C C O U N TA N T S
Funds entrusted to and debt securities * See notes starting on page 54.
Income from investments of the insurance operations 1 0 , 5 8 7 1 4 , 9 9 8
Interest result from the banking operations 6 , 1 2 1 5 , 8 3 1
Net profit for the period 4 , 5 7 7 1 1 , 9 8 4 amounts in euros
F I N A N C I A L I N F O R M A T I O N
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEARS ENDED 31 DECEMBER
As these revaluations have already been included in comprehensive net profit of the year under report and previous years under the caption unrealised revaluations and are also included in net profit for the period in the year of realisation, these realised results are adjusted in the comprehensive net profit for the period.
S U M M A R Y A N N U A L F I G U R E S
Realised revaluations released to the profit and loss account - 1 , 2 3 3 - 7 , 8 1 6
Comprehensive net profit for the period 8 1 1 4 , 4 6 4
Loans and advances granted/repaid - 8 , 1 5 4 - 4 5 , 4 0 4
Net investment in tangible fixed assets - 6 0 0 - 5 9 3
Net cash flow from investing activities - 2 7 , 1 5 2 - 1 4 , 2 1 3
Purchase of shares ING Groep N.V. - 5 6 3 - 1 , 2 2 7
Net cash flow from financing activities 5 , 2 8 3 6 , 5 4 7
Cash at beginning of the year 3 , 4 8 6 1 4 , 8 2 7
The goodwill amounted to  1,015 million and is charged to Shareholders’ equity. As from 1 July 2001, the results of Seguros Comercial
In 2001, ING Group increased its shareholding in Bank Slaski, based in Poland, from 55.0% to 82.8% for an amount of  187 million.
Investments for risk of policyholders and investments of annual life funds 8 2 , 7 4 3 8 1 , 9 4 7
The movements in the provision for loan losses included in Lending, Banks and other assets were as follows: Additions from: Net profit for the period 4 , 5 7 7 1 1 , 9 8 4
Group equity employed in the banking operations 1 5 , 3 9 8 1 4 , 8 9 9
Own shares held by the parent company, subordinated loans, third-party interests, debenture loans and other elimination entries - 9 , 2 8 5 - 7 , 5 0 9
Provision for profit sharing and rebates 7 4 5 6 8 5 2 1 7 4 3 6 8 4
Additions to the provision for loan losses 7 5 0 4 0 0 7 5 0 4 0 0
Operational net profit for the period 2 , 8 1 0 2 , 3 4 8 1 , 4 4 2 1 , 6 6 0 4 , 2 5 2 4 , 0 0 8
Non-operational items before tax 3 2 5 7 , 4 5 9 7 4 3 3 2 5 8 , 2 0 2
Net profit for the period 4 , 5 7 7 1 1 , 9 8 4 *See notes starting on page 58.
Income from investments in shares and convertible debentures 1 , 4 3 0 1 , 4 9 7
Income from investments in fixed-interest securities: S U M M A R Y A N N U A L F I G U R E S
Income from land and buildings includes an amount in respect of rental income allocated to business units of ING Group (the same amount is included in Other expenses) of  51 million (2000:  45 million). Income from investments in land and buildings and shares and convertibles includes realised results on disposal of  1,005 million (2000:  892 million). Income from investments for risk of policyholders of  -7,864 million (2000:  419 million) is not included in Income from investments of the insurance operations.
The interest margin, analysed on a percentage basis of the Netherlands and international operations, is as follows: The change in the interest result compared with 2000 is due to a decrease of the interest margin of  220 million (2000 compared with 1999:  1,140 million) and a growth in the average total assets of  506 million (2000 compared with 1999:  1,239 million).
The Operational result before taxation is broken down as follows: - Fire and other property losses 6 1 9 9
ING applies the Risk Adjusted Return on Capital (RAROC) framework in order to measure the economic performance of the banking activities on a consistent and risk-adjusted basis. RAROC is calculated by dividing the risk-adjusted return by the economic capital.
Quarterly RAROC figures are calculated and analysed for all major banking business units. Risk-adjusted pricing tools are used as a basis for pricing certain transactions and as an important determinant in credit approval procedures.
The table provides pre-tax RAROC figures for the banking business units of the respective Executive Centres as per year end; economic capital amounts in billions of euros.
ADDIT IONAL INFORMATION F I N A N C I A L I N F O R M A T I O N
Economic capital – the denominator of the RAROC fraction – is defined as the amount of capital that a transaction or business unit requires in order to support the economic risks it creates. It is calculated by measuring those risks as precisely as possible and determining what level of capital is necessary to cover those risks at the company’s desired level of comfort. ING uses a confidence interval of 99.95%
The economic capital calculation is subdivided into five distinct risk types: C R E D I T R I S K The risk of losses due to the inability of borrowers and counterparties to meet their repayment commitment.
T R A N S F E R R I S K The risk of losses due to the inability of a borrower or counterparty to obtain foreign currency to meet its financial obligations.
O P E R A T I O N A L R I S K The risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events.
The table below represents the economic capital numbers as per year-end in billions of euros for the total banking operations.
A D D I T I O N A L I N F O R M A T I O N
As we combine risk factors this will mostly lead to some risk reduction, called diversification, as in certain cases risks will have the opposite effect and can thus neutralise one another. The presented risk capitals include the diversification effects within each of the risk categories.
In addition, risk events between risk categories will not always happen simultaneously. The conservative assumption is made that only operational risk events occur largely independent of the other risk categories. Therefore the presented Diversification effect in the table can be attributed to the operational risk category. Further diversification effects as a result of combining bank and insurance activities are not taken into account.
The value of new business is as follows: in millions of euros 1) The value of new business in 2000 was restated to reflect additional unallocated acquisit ion expenses in the US of EUR 60 mil l ion.
The embedded value of the life operations is as follows: in billions of euros
The regional split of the total embedded value is as follows: in billions of euros
2) Countries classif ied as either l ife greenfields or ex-greenfields are Argentina, China, Czech Republic, Greece, Hungary, India, Indonesia, Italy, Japan, Korea,
P E R F O R M A N C E I N D I C AT O R S N O N - L I F E I N S U R A N C E
The breakdown of the combined ratio for the years 2000 and 2001 in the claims ratio and the cost ratio (in %) is as follows: CLAIMS RATIO COST RATIO COMBINED RATIO
For the insurance activities, the required solvency margin is based on European Union directives. At the end of 2001, ING’s solvency margin exceeded the required solvency margin by a factor of 1.1 (2000: 1.5), as shown by the following table: in billions of euros
C O M P O S I T I O N O F Q U A L I F Y I N G C A P I TA L
Credit ratings are indicators for the likelihood of timely and complete repayment of interest and instalment of fixed-income securities as assigned by rating agencies. The main credit ratings of ING are as follows: S TA N D A R D & P O O R ’ S M O O D Y ’ S
I N G I N S U R A N C E
R E C E N T D E V E L O P M E N T S
In May 2001 ING amended the Articles of Association of ING
Stichting Administratiekantoor ING Groep can also grant a voting proxy to legal persons, in addition to natural persons. Moreover, it was arranged that holders of depositary receipts who wish to receive a voting proxy from Stichting Administratiekantoor ING Groep will have to do no more than to report to Stichting Administratiekantoor ING Groep that they wish to attend the Shareholders’
ING Group largely anticipated this legislative proposal by amending its Articles of Association in 2001 and is deliberating about the other consequences of these proposals in close consultation with the
This was also done in consultation with the Central Works Council.
The profile of the Supervisory Board will be on the agenda for the
M E E T I N G O F S H A R E H O L D E R S A N D P R O V I D E R S O F C A P I TA L
A G E N D A F O R T H E M E E T I N G O F S H A R E H O L D E R S
The agenda for the Meeting of Shareholders is drawn up by the
P R O F I L E O F T H E S U P E R V I S O RY B O A R D
Board members cannot be appointed chairman or vice-chairman of the Supervisory Board. Former ING Executive Board members will, in case of an appointment to the Supervisory Board, observe a waiting period of one year following their retirement from the
Executive Board. The current Supervisory Board profile dates from 1997. The profile has been updated to provide guiding principles for the appointment of members and the composition of the
Supervisory Board. The new profile is an agenda item at the
The Supervisory Board has drawn up a set of rules governing the manner in which it functions. These rules also set forth the duties of the two Supervisory Board Committees: the Audit Committee and the Remuneration and Appointments Committee.
R E A P P O I N T M E N T O F S U P E R V I S O RY B O A R D M E M B E R S
Shareholders following completion of a term of office of four years.
Group in any way whatsoever. Responsibility for the proper performance of the duties associated with membership of the ING
The remuneration paid to Supervisory Board members is determined by the Annual General Meeting of Shareholders and is not dependent on the company’s results. For the remuneration paid to members of the Supervisory Board in 2001, reference is made to page 71.
Supervisory Board members are permitted to hold shares of the company as long-term investments. As at year-end 2001, members of the Supervisory Board held an aggregate of 24,984 depositary receipts for ordinary shares and 457 warrants B. They did not hold any depositary receipts for preference shares. If Supervisory Board members hold ING options that were granted in their former capacity as member of the ING Executive Board, these options are subject to the ING stock option plan as specified on page 71.
Directors Royal Dutch/Shell Group. F I R S T A P P O I N T M E N T S U P E R -
V I S O R Y B O A R D I N G G R O U P : May 1998, Chairman as of May 1999.
P R I N C I P A L F O R M E R P O S I T I O N : Chairman Executive Board Wolters
Leuven Gent Management School and Professor at the University of Gent (Belgium). Appointed to the Supervisory Board of
Nationale-Nederlanden in 1991. F I R S T A P P O I N T M E N T S U P E R V I S O R Y
B O A R D I N G G R O U P : May 1994. Member of the Audit Committee.
C U R R E N T T E R M O F O F F I C E : until the 2002 AGM in which she will be proposed for reappointment.
J A N B E R G H U I S (1934 - Dutch nationality)
P R I N C I P A L F O R M E R P O S I T I O N S : Vice-Chairman Executive Board
Member of the Audit Committee. C U R R E N T T E R M A N D L A S T T E R M O F
O F F I C E : until the 2002 AGM.
A A D J A C O B S (1936 - Dutch nationality)
J A N K A M M I N G A (1947 - Dutch nationality)
Province of Gelderland. F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D
P R I N C I P A L F O R M E R P O S I T I O N S : Chairman Executive Board ING
I N G G R O U P : April 2001, one year after his retirement from the chairmanship of the Executive Board of ING Group. C U R R E N T T E R M
PA U L B A R O N D E M E E S T E R (1935 - Belgian nationality)
J O H A N S T E K E L E N B U R G (1941 - Dutch nationality)
A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G G R O U P : September 1997, also on the recommendation of the Central Works Council. C U R R E N T
H A N S T I E T M E Y E R (1931 - German nationality)
Bundesbank. F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G G R O U P : May 2000. C U R R E N T A N D L A S T T E R M O F O F F I C E : until the 2003
J A N T I M M E R (1933 - Dutch nationality)
Appointments Committee. C U R R E N T A N D L A S T T E R M O F O F F I C E : until the 2003 AGM.
N E W A P P O I N T M E N T S
E W A L D K I S T Chairman (1944 - Dutch nationality)
A P P O I N T M E N T E X E C U T I V E B O A R D I N G G R O U P : July 1993. Vice-
M A I N R E S P O N S I B I L I T I E S : ING Europe/retail market, ING Direct,
A P P O I N T M E N T E X E C U T I V E B O A R D I N G G R O U P : May 2000. Joined
ING (after merger with Equitable of Iowa) in 1997. M A I N
H E S S E L L I N D E N B E R G H (1943 - Dutch nationality)
C E E S M A A S Chief Financial Officer (1947 - Dutch nationality)
Joined ING in 1996. F O R M E R P O S I T I O N : President VNO-NCW
G E N E R A L P O L I C Y
The base salaries are reviewed every two years against developments in the market. It was decided not to change the base salaries for 2001 as compared to 2000. The base salaries of the non-Dutch Executive
L O N G - T E R M I N C E N T I V E
Long-term incentives for members of the Executive Board are provided through ING’s stock option plan. This plan aligns the interests of shareholders and the members of the Executive Board.
Committee, the Supervisory Board each year has the discretionary power to grant ING stock options to members of the Executive
Executive Board ends on 1 June of the calendar year in which they turn 60. By mutual agreement the retirement date can be extended to 1 June of the calendar year in which they turn 61 or 62. Their prospective pensions amount to a maximum of 60% of their base salaries. Just as for the other ING employees in the Netherlands, the pension rights of the members of the Executive Board are free of premium. The non-Dutch members of the Executive Board have a pension plan related to their home-country practices.
The total remuneration of the members of the Executive Board as at 31 December is as follows: amounts in thousands of euros
Short-term performance-related bonus 6 9 7 1 , 2 2 9
(1) Increase in 2001 due to full year of Executive-Board membership of Fred Hubbell .
The remuneration of the members of the Executive Board was as follows: amounts in thousands of euros
(1) Based on 2001 results, 13.25% over base salary; bonus of Michel Tilmant is based on his international contract.
(2) Based on 2000 results, 30% over base salary; bonus of Michel Ti lmant is based on his international contract.
(3) Number of (10 year) options related to financial results 2001 of ING Group. The exercise price of these options wil l be fixed at the Euronext Amsterdam Stock
(4) Number of (5 year) options related to financial result 2000 of ING Group. Adjustment is made for the 2:1 stock split .
The amount outstanding as at 31 December 2001 in respect of loans and advances to members of the Executive Board was  2.6 million
(2000:  2.7 million) at an average interest rate of 4.9% (2000: 4.4%).
the Executive Committees, general managers and other officers nominated by the Executive Board), to all ING Group staff in the
ING Group purchases direct or indirect its own shares at the time options are granted in order to fulfil the obligations with regard to the existing stock option plan and to hedge the position risk of the options concerned. The purpose of this policy is to avoid an increase in the number of shares, causing a dilution of the net profit per share. As at 31 December 2001, 69.1 million own shares were held in connection to the option plan (2000: 54.8 million); as a result all granted option rights were hedged, taking into account the expected staff turnover. The options granted do not incur costs for
ING Group other than administrative costs for the stock option plan and funding costs resulting from the purchase of own shares.
Option rights which are not exercised within this period lapse. Each year, the 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)
DECEMBER 2000 IN 2001 IN 2001 (1) DECEMBER 2001 PRICE IN EUROS DATE IN EUROS
In 2002, to each member of the Executive Board 35,000 options were granted relating to the financial year 2001 (2000: 50,000; 1999: 50,000). The exercise price of these options will be fixed at the
0.6 million). The remuneration of the chairman and vice-chairman amounted to  68,100; other members received a remuneration of
The amount outstanding as at 31 December 2001 in respect of loans and advances to members of the Supervisory Board was  4.6 million (2000:  4.8 million) at an average rate of 5.4% (2000: 5.7%).
Transferred to/from the Executive Board (1) 2 0 9 , 8 8 6
The following table summarises information about stock options outstanding and exercisable as at 31 December 2001: RANGE OF EXERCISE PRICE IN EUROS OPTIONS OUTSTANDING WEIGHTED AVERAGE WEIGHTED AVERAGE OPTIONS EXERCISABLE WEIGHTED AVERAGE
AS AT 31 DECEMBER 2001 REMAINING CONTRACTUAL LIFE EXERCISE PRICE AS AT 31 DECEMBER 2001 EXERCISE PRICE
dated 24 January 1991 and most recently amended on 29 June 2001, we hereby report the following to the holders of depositary receipts.
As a result of the alteration in the articles of association of ING
Groep N.V., whereby among others the nominal value of the ordinary shares was changed into  0.24, the nominal value of the depositary receipts for ordinary shares was changed accordingly. During its meeting on 6 December 2001, the Board was informed about the general course of business up to 30 September 2001. As at 31 December 2001, ordinary shares totalling  478,011, 131.04 nominal value, against which 1,991,713,046 depositary receipts in denominations of
Veraart. The composition of the Board is currently as follows: John
The activities involved in the administration of the shares are performed by the administrator of the Stichting: Administratiekantoor van het Algemeen Administratie- en Trustkantoor B.V.,
S TAT E M E N T O F I N D E P E N D E N C E
Executive Board of ING Groep N.V. hereby declare that in their joint opinion the requirements concerning the independence of the members of the Board of Stichting Administratiekantoor ING
Groep contained in Annex X of the Rules Relating to Securities of
The Board of Stichting Cumulatief Preferente Aandelen ING Groep and the Executive Board of ING Groep N.V. hereby declare that in their joint opinion the requirements concerning the independence of the members of the Board of Stichting Cumulatief Preferente
HOFF, FOPPE VAN D I JK , GEERT VAN DR IMMELEN , FRED HALBERSTADT,
PETER SCHOUTEN , BERT SNELLER , BEN SOETENS , RUUD UYLENHOED,
The ING Group Advisory Council advises the Executive Board regarding strategic, social or policy issues or developments, which are relevant for ING.
( i ) general economic conditions, in particular economic conditions in ING’s core markets, ( i i ) performance of f inancial markets, including emerging markets,
( i i i ) the frequency and severity of insured loss events, ( iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels,
(vi i ) currency exchange rates, (vi i i ) general competitive factors, ( ix) changes in laws and regulations and (x) changes in the policies of governments and/or regulatory authorities. ING assumes no obligation to update any forward-looking information contained in this document.
T E X T A N D P R O D U C T I O N