— Summary Annual Report, in Dutch, English, French and German; — Annual Report, in Dutch and English; — Annual Report ING in Society, in Dutch and English; — Annual Accounts, in Dutch and English; — Annual Report on Form 20-F, in English
3. Create value for the clients with a multiproduct /multi-channel approach.
– after careful consideration – to speak out on matters that may affect its employees, shareholders or customers.
ING recognises that certain resources are finite and must be used responsibly. Therefore it pursues a two-pronged, internal and external, approach designed to promote environmental protection. Its external policy is aimed at anticipating developments in the environmental field related to commercial services, and the professional management of environmental risks. Internally, the policy is aimed at controlling any environmental burdens caused by ING itself.
4 Information for shareholders 7 Structure and composition of the boards 8 I N G ’ S G R O W T H M A R K E T S
18 Financial highlights 22 Group strategy and Outlook 24 ING Europe 28 ING Americas 32 ING Asia/Pacific 35 Asset Management 38 ING Direct 40 ING in Society 42 Human Resources 44 Risk management 47 Auditor’s report 48 Summary annual figures 60 Additional information: 61 - Embedded value 64 - Capital base 67 - Efficiency ratios 67 - Credit ratings 68 Tabaksblat Code 70 Capital and control 72 Executive Board 73 Supervisory Board 76 External auditors 76 Trust offices’ reports 79 General policy 82 Remuneration Executive Board 2003 85 Remuneration structure Executive Board 2004 87 Remuneration Supervisory Board 87 Stock option plan 90 Works Councils and Advisory Council
The theme of this annual report is client focus. Clients come first and they are our top priority. Every day we work hard to be their first choice and live up to their expectations. Our 60 million clients count on us. Whether they need life insurance, investment funds, pension funds, a start-up loan for a one-man business or a complex financing facility for a large company, every client gets the same service and attention. But there is always room for improvement. For example, we are working hard to improve the service level of Nationale-Nederlanden.
As you know, we are also working hard on building our brand. We want to create one strong ING brand and become one of the leading international brand names. Last year, we made progress in achieving this goal. The success of ING Direct certainly contributed to this.
On a personal note, 2004 will be a year of major change. On 1 June I will say goodbye to ING where I have worked for the last 35 years. It has been a privilege to be the chairman of ING’s Executive Board and to guide ING through some difficult years. I am proud of this great company and its 115,000 dedicated employees.
I will leave behind a solid company, with an international, renewed Executive Board, led by my successor Michel Tilmant. The new team will have to set the strategic priorities for the years to come. I am confident that they will do a good job. ING is well-positioned to take advantage of better times, provided that we continue to focus on the needs and wishes of our clients in the most efficient way. Value for money and entrepreneurship – that is what it all comes down to in the end.
ING Group’s profit retention and distribution policy is dictated by its internal financing requirements on the one hand and the capital providers’ dividend expectations on the other.
ING Group are its credit ratings, which directly affect its financing costs and hence its profitability. For their part, the capital providers expect a dividend which reflects ING Group’s financial results and is relatively predictable.
Group post a lower result in any year, it will endeavour to maintain the total amount of dividend per share distributed at the same level.
With effect from the final dividend for 2002, the dividend is payable, at the option of the shareholder or depositary-receipt holder, either in cash or in newly issued (depositary receipts for)
Verzekeringen N.V. were downgraded one notch by Moody’s Investors Service to Aa3, whilst the rating for ING Bank N.V. remained unchanged
N.V. AA-). All above-mentioned ratings have a stable outlook. An overview of the ratings is given on page 67.
I N FO R M A T I O N FO R S H A RE H O L D E R S
Euronext Amsterdam Stock Exchange, in euros * Based on the share price at the end of December and operating net profit per ordinary share for the financial year.
(Depositary receipts for) own ordinary shares held by ING Group and its subsidiaries 28.1 28.4
Listings Depositary receipts for ING Group ordinary shares are listed on the stock exchanges of Amsterdam,
Significant Holdings in Listed Companies, three holders of depositary receipts with an interest or potential interest of between 5% and 10%
              
Bulletin. You can subscribe to both publications through the ING Group website, www.ing.com.
ING news, you can subscribe to the e-mail service on www.ing.com.
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Shareholders’ Bulletin is a magazine with interviews and articles about ING’s activities. It appears three times a year.
ING has a two-tier board structure consisting of the Supervisory Board and the Executive Board. The latter is responsible for the day-to-day management of the business and long-term strategy. The Supervisory Board is responsible for controlling management performance and advising the Executive Board. The Supervisory Board is made up exclusively of outside directors. Under the Executive Board, three regionally oriented Executive Centres and a global platform for asset management are responsible for managing the business units.
ING Europe delivers banking, insurance and asset-management services to retail, corporate and institutional clients via a multi-distribution approach. ING belongs to the leading financial institutions in Europe. The Netherlands, Belgium and Poland are the three home markets. ING Europe also includes ING Direct (which is also active in several countries outside Europe) and all international wholesale-banking activities.
ING Americas encompasses ING’s insurance and asset-management activities in the US, Canada, and Latin America, where ING has prominent market positions. The Executive Centre consists of four core operating units: US Financial Services, ING Investment Management, ING Canada and ING Latin America.
Many countries are characterised by a young population, rapid economic growth and a growing demand for more sophisticated financial products that offer a guarantee for a safe future.
ING has a long-standing reputation as a life insurer. Since 1863, National Life Insurance Bank, one of ING’s founding companies, started gaining experience with the development and sale of lifeinsurance products. Another of ING’s predecessors, ’the Netherlands est. 1845’, began even earlier in selling insurance internationally.
Thailand is a promising growht market, where ING sells life insurance through tied agents and offers asset-management services.
The growth of ING Direct UK has been spectacular. In nearly eight months it attracted over 305,000 clients and EUR 11.5 billion in funds entrusted.
ING Direct cafés offer coffee and high interest rates on savings as well as a tangible presence.
ING Direct’s average overall aided brand awareness has developed favourably. It is now over 70%.
All over the globe, countries are struggling with the financial consequences of an ageing population.
The US is the largest market for ING’s pension business. With its ‘Financial Horizons’ program, ING US Financial Services informed people about the financial implications of retirement. The vivid orange Retirement Readiness Vehicles toured the country to spread the message and promote the ING brand.
In the longer term, Asia will witness the fastest growth in retirement savings. With a population of 1.3 billion, China is a market with substantial long-term potential. PALIC, ING’s joint venture with China Pacific Insurance Company, offers life-insurance and annuity products in Shanghai and Ghangzhou.
The Remuneration and Nomination Committee met three times and the Corporate Govern ance
January, the Medium Term Plan 2003 – 2005 and the strategic developments were discussed extensively. In particular the developments in the United States and Belgium, two important markets for ING, were reviewed. The annual results were the main topic of the meeting in February, after which the quarterly results dominated the agenda in May, August and
November. Other agenda items were the dividend policy, the amendments to the Articles of
Association as a result of the modernisation of corporate governance and the annual discussion on management development. In the presence of ING’s Legal Counsel, the draft report of the
Tabaksblat Committee on corporate governance was discussed. The Supervisory Board expressed its intention to adopt the recommendations of this committee as far as possible. With regard to a few items, ING deviates from the recommendations (see page 69). These will be submitted to the Shareholders’ Meeting.
In every meeting the Executive Board informed the Supervisory Board of a number of current topics, such as the reorganisation of the wholesale activities, the new organisational
After profit stabilised in an economically difficult year 2002, we can report an operating net profit increase of 18.1% for 2003, as a result of a modest economic revival, the start of a stock-exchange recovery and strict cost control. In the past year, corporate governance was an important theme. It was decided to abolish the Dutch legal large-company regime and to give the holders of depositary receipts unrestricted voting rights. These decisions are in line with the Dutch corporate-governance code
Detailed information on the Supervisory Board members is given on page 74.
During its meetings without the Execu tive Board, the Supervisory Board discussed its own functioning as well as the composition of the board based on its profile. The functioning of the Executive
Executive Board and of the management levels below the Executive Board.
Audit Committee The regular meetings of the Audit Committee were always held in the presence of the internal and external auditor as well as management of
Board, the chairman, the vice-chairman and the CFO attended every meeting. In January, the Audit Committee held an extra meeting on the possible losses resulting from National
Blanc Capital Corporation, which runs a financial risk on NCFE. A substantial provision was made to cover that risk and measures were taken to prevent this kind of risk in the future.
Other important issues were corporate governance, especially the recommendations of the Tabaksblat Committee regarding the
From right to left: Michel Tilmant, vice-chairman Ewald Kist, chairman Cees Maas, CFO Alexander Rinnooy Kan Fred Hubbell
Detailed information on the Executive Board members is given on page 72.
Committee have increased. Two members are recognised as financial experts according to SOX.
General management of Nationale-Ne der landen gave a presentation on the measures taken to improve the quality of service. In
delegation of the Supervisory Board met on two occasions with representatives of the Central
Nomination Committee talked to every member of the Executive Board individually.
Board and the member of the Executive Board responsible for Management Development and
Composition of the Executive Board In the previous annual report, we informed you about the retirement of a member of the
Executive Board as per 1 July 2003. The present chairman, Ewald Kist, will retire as per 1 June 2004, having reached the retirement age. The present vice-chairman, Michel Tilmant, will succeed him as chairman on 28 April 2004. Besides his role as CFO, Cees Maas will become vice-chairman as of that date. The Supervisory Board proposed three new members for appointment by the General Meeting of Shareholders on 27 April 2004, Eric Boyer de la Giroday, Eli Leenaars and
Board less than five years ago. He retired in 2000. His current term of office ends in 2005. In case of his reappointment in 2005, he will then be considered independent pursuant to the
Annual accounts and dividend This annual report contains the report of the
The Supervisory Board would like to express its gratitude to all management and staff for their effort and involvement in the past year. ING is a strong company and still has much potential to grow. Serving the clients’ needs on a daily basis remains the foundation of a successful company.
In January 2003, Johan Stekelenburg, member of the Supervisory Board, contracted a serious illness from which he died nine months later, on 22 September 2003. There had been moments of hope during the difficult months preceding his death, but they were always followed by regression. Although he was unable to attend meetings as a result of his illness, Johan
Stekelenburg remained very involved with ING. He had been able to make a contribution to the discussions with the Central Works Council on the new remuneration structure for the
F I N A N C I A L H I G H L I G H T S
Total operating income of the insurance operations decreased by 11.3% to EUR 57.6 billion due to consumer uncertainty about the economic climate and fierce competition in the main insurance markets. Organic insurance income was flat. Life premium income decreased by 0.8%. Premium income from non-life insurance rose by 4.2% organically. Total premiums in the developing markets in local currencies showed a healthy growth of 10.9%.
The total number of staff (full-time equivalents ) decreased by 1,900 to 114,300 at the end of December 2003. Ongoing restructuring, integration and cost-containment programmes have led to a reduction of the workforce in the banking units in ING Europe and the insurance units in ING Americas. ING Direct attracted some 1,700 new staff (including Entrium employees) to handle the strong growth of its business. Staffing levels of the insurance operations in a number of developing markets as well as in Canada increased, too.
Total operating expenses of banking decreased by 1.4% to EUR 8.2 billion, despite higher pension expenses, the impact of the collective labour agreement in the Netherlands and accelerated depreciation of capitalised software, as well as the ongoing expansion of ING Direct.
Organically, thus excluding currency fluctuations and the consolidation of Toplease and ING Vysya
Bank, expenses increased by EUR 84 million or 1.0%. The efficiency ratio for banking (excluding ING Direct and restructuring provisions)
Operating net profit in 2003 up 18.1% to EUR 4,053 million — Operating expenses decreased by 3.1% — Total number of staff decreased to 114,300 at year-end
Net profit for 2003 fell EUR 457 million, or 10.2%, to EUR 4,043 million, mainly due to the absence of net realised capital gains on shares in 2003 as a result of a deliberate policy change
Operating net profit from the insurance operations decreased from EUR 2,538 million in 2002 to EUR 2,508 million in 2003 (–1.2%).
US-dollar hedge. Excluding the impact of the strong euro, operating net profit from insurance activities rose by 2.7%. Operating profit before tax increased by 10.0% compared with 2002. Life insurance profit before tax decreased by 4.8%
567 million in 2002 to EUR 1,008 million in the reporting year (+77.8%).
Operating net profit from the banking operations increased by 72.6% to EUR 1,545 million in 2003, mainly driven by a higher interest result, lower expenses and lower loan-loss provisions.
From left to right: Ewald Kist (chairman), Michel Tilmant (vice-chairman), Alexander Rinnooy Kan, Fred Hubbell,
Report of the Executive Board expected profits in US dollar and US dollar-linked currencies for 2004 and 2005. On the insurance side, profits were hedged at a EUR/USD exchange rate of 0.922 for 2004 and 1.253 for 2005. On the banking side, the EUR/USD exchange rates were
EUR 440 million, compared with EUR 519 million in 2002. The decrease is primarily due to lower sales and lower pricing targets, which are attributable to lower interest rates. As in 2002, ING
Dividend For 2003, a total dividend of EUR 0.97 per (depositary receipt for an) ordinary share will be proposed to the Annual General Meeting of
The insurance operating profit before tax improved by 8.8% although it bore the impact of one-off items. Pressure on investment income and higher expenses resulted in lower life results in the Netherlands. The life operations in Belgium and Poland, however, performed well. The non-life results on the home markets in the Netherlands and Belgium developed very favourably.
More than half of new insurance business generated by ING Asia/Pacific — Although distributable net profit was lower, dividend was equal to 2002
Asset Management The functional operating profit before tax from asset-management activities grew strongly by 63.9% to EUR 431 million. This figure results from splitting off the asset-management profit contribution from the insurance and banking results. In 2003, asset-management activities accounted for 7% of ING Group’s operating profit before tax.
EUR 449 billion at the end of 2002 to EUR 463 billion at the end of 2003 (+EUR 14 billion or
+3.1%). ING changed its definition of assets under management to conform more closely with industry practice. This restatement led to a net increase of EUR 9 billion. Furthermore, net inflow of EUR 11 billion and the effect of higher stock markets (+EUR 32 billion) were partly offset by exchange differences (–EUR 38 billion). All regional units of ING Investment Management as well as ING Real Estate contributed to the EUR 11 billion net inflow.
also successfully issued two new subordinated perpetual loans in Europe and the US. To protect the capital levels from stock-market decline, ING
As a result of these measures, the capital base of ING Verzekeringen N.V. increased to EUR 15.8 billion at the end of December, which is 180% of the legally required level (year-end 2002: 169%).
EUR 3.0 billion or 16.9% compared with yearend 2002. The full-year net profit added EUR
EUR 9.14 at year-end 2002 to EUR 10.08 at the end of 2003.
Return on equity The operating net return on equity increased from 17.4% in 2002 to 21.5% in 2003. The return on equity of the insurance operations was 22.7%
as against 18.6% for 2002. The return on equity of the banking operations increased from 6.5%
Assets under management increased to EUR 463 billion — Shareholders’ equity rose by 17% to EUR 21.3 billion — Operating net return on equity rose to 21.5%
ING’s financial position to market volatility. An important long-term measure to strengthen the capital base was the introduction of optional stock dividend as of the final dividend 2002.
United States, raising a total amount of EUR 1.1 billion. Another measure to improve the capital base was the sale of shares and real estate during the year. The proceeds were used to reduce the core debt of ING and improve the debt/equity ratio. As a result, the debt/equity ratio of ING
EUR 4 billion of its Dutch equity portfolio against a sharp stock-market decline at the beginning of 2003 by means of a cost-neutral collar. This accounts for approximately 40% of ING’s equity portfolio worldwide. In the course of 2003, ING
15.8 billion, which is 180% of the legally required level (year-end 2002: 169%). The Tier-1 ratio, indicating the financial strength of our banking units, improved from 7.31% at the end of 2002 to 7.59% at the end of 2003. The revaluation reserve for shares amounted to approximately EUR 900 million on 31 December 2003.
Optimise the existing portfolio Focus and execution were the key words in 2003.
ING to increase focus in terms of activities and markets it wants to be in. We continued our policy to refrain from making large acquisitions.
Furthermore, a more critical assessment of the business portfolio has resulted in a number of actions. For instance, several business units were sold in the course of 2003. Examples are
Create value for clients The multi-product and multi-channel approach has been the core of ING’s strategy. In all markets where ING is active, ING’s business units have continued to create value for their clients. ING in the Netherlands, for example, combined its sales forces and made further progress integrating its operations. Perfecting its click-call-face concept enabled ING to increase the quality of customer service, giving clients in the Netherlands improved access to the different distribution channels and products.
An example in Asia is the initial product launch of the China Merchant Antai Open-ended
Looking back on 2003, ING faced a weak economic climate and unstable geo-political circumstances. However, ING made good progress with regard to its five strategic objectives.
Good progress with regard to ING’s strategic objectives — Effective measures resulted in a stronger capital position, for both the insurance company and the bank — Portfolio optimisation resulted in some business units being sold — New initiatives perfected ING’s click-call-face concept
Kingdom, the eighth country where it offers attractive savings products to retail clients. The launch in the UK proved to be the most successful ING Direct start-up so far. By the end of 2003,
Company), received approval to establish a branch in the city of Guangzhou, the third-largest city of China. This allows the many millions of potential customers in southern China to buy insurance products from PALIC.
As a result of the global ageing of the population and pension reforms being introduced in many countries, ING selected pensions as a global spearhead. We developed business objectives for 2004 to expand current pension activities and start up many new initiatives. In addition to working on the realisation of these commercial objectives, ING is stepping up its pension-advisory services to governments and institutions that can benefit from ING’s pensions’
In the United States, ING has integrated its operations, resulting in yearly cost savings in the amount of approximately EUR 300 million. US
Nederlanden). At the insurance operations total operating expenses decreased by 5.9% (organic change: +6.5%). The efficiency ratio of the banking operations improved from 71.0% in 2002 to 68.4% in 2003 (excluding ING Direct and restructuring provisions). As from 2004, ING Direct will no longer be excluded.
Outlook The year 2003 proved that the efforts with regard to the strategic objectives paid off. The
opted to put value before growth. We focussed on the existing business, launched the right initiatives to contain costs and gave high priority to risk management. These efforts, combined with a focus on improving the overall service towards the client, led to good results. ING Europe’s overall operating profit before tax rose by 32.8%
In the home market of the Benelux, ING is present with the full range of distribution channels. In the mature markets (UK, Germany, Spain,
France and Italy), ING serves its clients with a unique direct-banking concept. In this respect,
ING Direct (including DiBa in Germany, discussed in a separate chapter), and Postbank in the
ING runs one of the largest tied-agent forces in the area. The retail business performed well last year. Profits before tax rose by 20% to EUR 1,608 million (excluding Private Banking).
“We’re specialist in three core activities: transporting bulk cargo and fluids, financing and insurance of company cars, and we’re also the official Volvo company-car dealer in the eastern part of the Netherlands and central Poland. Our relationship with ING Bank is based on mutual trust. ING Bank has been our exclusive banker since we established our company in 1963 and we hope to continue that for many years to come.”
Postbank added a new service for its clients with the creation in January 2003 of a mortgage sales force. In line with ING’s click-call-face strategy, this new sales force introduced the ‘face’
in this attractive but competitive market. This initiative allowed Postbank to boost the sale of mortgages to a total amount of EUR 6.0 billion.
Lambert changed its name in April 2003 to ING, concluding an 18-month process to familiarise customers and employees with the new brand.
The Belgian insurance operations were already integrated and rebranded in 2001 into ING
project: twelve working groups came up with plans and projects to enhance the use of existing infrastructure and resources in order to better meet the requirements of the customers and to improve the level and quality of income. The current implementation of these projects is expected to lead to an important profit contribution by 2005.
Central Europe. In Hungary and Romania, ING is market leader in life insurance and in Poland and
Hungary we are number two in the field of pensions. Furthermore, in 2003 ING received the award for ‘Best Cash Management Bank in
Operating profit before tax up by 33% to EUR 4,305 million — Cost containment and good risk management paid off — Retail bank in core European markets performed well. — Private Banking makes a comeback, five-fold rise in profits — Premium income in developing Central-European markets up by 7%
ING has long been active in Central and Eastern Europe. In Romania, ING’s banking activities have traditionally been focused on serving the corporate market. Last year, ING began to target the retail segment by offering residential mortages.
Slaski in Poland, this implied a major restructuring, leading to the redundancy of 760 employees, ten percent of the total staff.
In 2003, ING Wholesale improved risk management, restructured its operational cost base and its international branch network and, above all, unified its client approach to increase value for both ING and its clients. Important efforts went into the alignment of the commercial strategy of Corporate Financial Services (CFS)
As a result, ING Wholesale restored profitability in 2003. Compared with the very difficult year 2002, profit before tax almost doubled to
surmounted the impact of SARS in the first six months of the year. The UK experienced a breakthrough year in 2003 as the combined operations turned in a profitable performance. In Germany, at ING BHF-Bank, the implementation of the new strategy and the focus on cost control had to be accompanied by a reduction in staff. Employee
Corporate Financial Services Corporate Financial Services (CFS) started to clearly redefine its client base in 2003. This is mid-corporates in the Benelux, Poland and
offers a range of products – from spot foreign exchange to very sophisticated derivatives – to help them manage these risks. Thanks to a continued focus on cost containment (costs were reduced by 10%) results in this business improved.
Important contributors were the treasury and strategic trading businesses. Financial Markets wants to continue this strong performance and give full support to the client-oriented strategy of ING Wholesale. To do so, additional investments have been made into developing a much closer alignment between product specialists and client relationship managers. In the major developed markets, FM started reorganising and upgrading its sales teams. In the future, a global sales co-ordination team will help service clients across the various regions. These initiatives will further improve the exchange of information, which – together with excellent service quality –
Europe) manages EUR 110.8 billion in assets. It was transferred from the former Executive
(see also the Asset Management chapter). As a result of this reorganisation, ING IM Europe
ING Wholesale aligning the commercial strategy of its different segments — Wholesale profits before tax almost doubled to EUR 1,613 million — Asset-management activities in Europe profit from closer alignment with ING’s sales channels and insurance companies
ING to exploit its scale to the fullest extent and to use the available experience within the Group as optimal as possible.
Outlook ING Europe has made important strides to adapt its business to leaner times. Looking forward over the next twelve months, the economic outlook is more positive in some areas, but still uncertain elsewhere.
With these prospects in mind, ING Europe will continue to be very operationally focussed, making sure that financial performance is sustained. Controlling costs will remain high on the agenda for ING, as will risk management. In the longer term, these priorities will enable a high level of cost competitiveness and service quality.
In the short term, they help laying the basis for the business upturn when it comes.
In the Netherlands, Retail Financial Services will enhance its sales capacity and invest more in the improvement of its sales force.
Europe wants to take advantage of new external opportunities, like the accession of several Eastand Central-European countries to the European
Union. ING Private Banking has started to invest in a number of key developing markets where we believe there are significant growth opportunities, including India, China and Korea.
Strategy and results In the Americas, ING holds key positions in insurance, asset management and retirement services. In this region, ING serves more than 33 million customers, 14.4 million of which are in the United States. In the US market, ING has a top-five position in life insurance and retirement services. In Canada, ING is the number-one property-and-casualty (P&C) company. In Latin
benefit costs, combined with one-time US costs, increased total expenses with 2.9% over 2002.
(USFS) comprises businesses offering an array of products and services to retail and institutional clients, including retirement programmes, annuities, life insurance, employee benefits, mutual funds and financial planning. Early 2004, ING
In 2003, ING delivered better results through a continuing effort to improve the business fundamentals. ING continued to face the challenge of historically low interest rates, which has compressed margins and affected returns for fixedannuity and traditional life products. This was partly offset by substantially lower investment losses. The US business carefully balanced the need to retain adequate profit margins with the need to offer competitively priced products to distributors and customers, a challenge confronting the entire industry. ING was well positioned to capitalise on the equity-market upswing. USFS’
ING’s US Institutional Business consists of reinsurance and institutional-markets businesses, offering reinsurance products, risk-management tools and customised solutions and services to direct writers, including mortality research, product-development support and health and disability claim consulting. The good performance in group reinsurance and institutional markets was negatively offset by high mortality in individual life reinsurance throughout the year and especially in the third quarter.
Latin America ING Latin America reported EUR 292 million of operating profit before tax in 2003, an increase of EUR 56 million over 2002. This includes a gain of EUR 44 million from the sale of the Bital joint venture in Mexico. Mexico and Brazil reported higher operating profits before tax, which were dampened by lower results in Argentina and the impact of divestures (e.g. Fatum in the
Chairman Ewald Kist and NY City Mayor Michael Bloomberg hold the finish ribbon as Margaret Okaya of Kenya wins the women’s marathon. ING’s title sponsorship of the NY City Marathon boosted ING’s name recognition significantly in the US.
Head office in Rio de Janeiro. SulAmérica and ING are together em barking on the promising and fast-growing Brazilian market. The joint venture aims to reinforce the activities in the insurance market and develop products and services for the asset-management market.
ING Comercial América in Mexico has established itself as an industry leader in the market with over 7.8 million customers and a top-market ranking in the P&C, auto insurance business and a number-five position for retirement savings funds. Mexico continued to show strong performance in 2003 with EUR 198 million of operating profit before tax. In 2003, our performance continued to benefit from strong insurance underwriting and a wide distribution network of approximately 9,000 agents that helped to deliver consistent returns. During the year, ING
The dispute, which began in 2001, concerns significantly divergent opinions between ING
ING strengthened its relationship with one of the premier insurance providers in the country by launching the ‘SulAmérica, associated with ING’ endorsement brand. The rebranding came 17 months after ING took a 49% stake in SulAmérica in 2002. SulAmérica serves more than 6 million customers and represents 15% of the market.
In Chile, ING is the number-one life insurer and the number two in health. ING in Chile developed ING Express, a new concept in selfservice that allows customers to obtain account information from ING Chile’s diverse business lines.
During 2003, ING IM Americas created a single asset-management platform in the
Americas through the integration of several historically independent organisations. We integrated our businesses under a common management committee, eliminated redundancies and forged a single shared identity and vision. This reorganisation strengthens the competitive position by enabling us to offer our best capabilities in each client channel and making client service, business development and operations more efficient. For example, in 2003 we began offering in the institutional market our core US fixedincome strategies that were initially developed to manage portfolios of insurance affiliates and funds (see also the Asset Management chapter).
ING IM Americas offers its clients four primary areas of investment management: fixed income, quantitative equity strategies, qualitative equity strategies and alternative assets
(including private equity, single-strategy hedge funds and hedge fund of funds). Investors first and foremost expect strong investment performance from ING, and many also require professional advice and investment education. ING IM
In 2003, the ING brand progressed further and now covers all ING Americas business units, except Peru. US brand awareness hit a high point last November at the running of the ING New
York City Marathon. All over the city in the weeks leading up to one of the world’s largest foot races, ING’s lion imprint was seen everywhere
ING Re was one of the top-three reinsurers judged as best overall by life insurers in the 2003 Life Reinsurance Marketing Opportunities
Client Service Guarantee in Canada In Canada, ING introduced an innovative Client
Service Guarantee. This is the first fully national and integrated customer-driven initiative ever undertaken by ING Canada’s three insurers – ING
BELAIRdirect. The new element in this service, however, is that ING is willing to penalise itself if it cannot deliver on its promise, thus ensuring credibility. The Client Service Guarantee lets customers know they can rely on ING at a time when they are facing a crisis and looking for someone to depend on.
Outlook In 2004 and beyond, ING’s economic assumptions reflect some overall improvement in the
ING is aiming on improving returns on economic capital, while also consistently growing its earnings by improving efficiency and getting profitable new business. Overall, ING will continue its policy to properly balance profitability and market share. The focus is on execution: building customer-oriented businesses, strengthening the ties with customers and distributors, managing costs effectively, attracting and keeping inspired employees and further improving the IT infrastructure.
Overall, ING focuses on achieving long-term, sustainable leadership positions in this region with an emphasis on becoming a consistently low-cost producer. Strategic priorities include an increased focus on the current portfolio of countries, growth of the customer base, leadership in bancassurance and expansion of dis tribution alliances. ING also focuses on enhancing agent productivity, operational efficiency and improving the design of products to reduce asset-and-liability mismatches in tenor and yield.
ING Asia/Pacific generated almost 60% of the total value of new business created by ING
Asia/Pacific’s operating profit before tax grew by 19% in 2003. The value of new business and profit generation was particularly strong considering the difficult economic environment in Asia in the first half of 2003, the impact of SARS, the effects of the low-interest-rate environment and the appreciation of the euro.
ING Asia/Pacific delivered a strong performance during 2003, despite a number of adverse economic and financial developments in the region. The Asian life operations continued on their steady growth path. ING’s strategic alliances, especially in the area of bancassurance and distribution capacity, reached scale and delivered good results in markets such as Japan, China and
Nomura continues to be a critical distribution partner, while two of the largest banks (Mizuho and UFJ) started selling annuities in November 2003 with excellent results. ING also signed distribution agreements with the first largest banking group Resona. ING now ranks number three among single-premium variable-annuity providers in Japan. ING’s pensions joint venture with Principal Financial Group of USA is the number-seven pensions provider in the country.
ING’s businesses in Taiwan, Korea and Malaysia continued to do well in 2003. Organic premium income grew by respectively 13.6%, 54.9% and 15.7% in these three countries.
Taiwan is one of ING’s most important markets in the Asia/Pacific region. ING Antai is ranked number four in Taiwan with 1.5 million customers and an 8% market share. In an effort to reduce the overall risk profile of the company,
ING Antai redesigned existing products and introduced new products with a larger unitlinked or participating element.
Malaysia with over one million retail clients. It is also the number-four provider of employee benefits. During the year, ING Malaysia rebranded from its previous name of Aetna Universal
Thailand also proved their growth potential with a strong rise in premium income in 2003.
In China, ING operates three joint ventures comprising two insurance companies and one fund-management operation. In Shanghai, ING’s joint venture with China Pacific Insurance, known as Pacific Antai Life Insurance Company (PALIC), was awarded a license in September 2003 to operate a branch in Guangzhou. PALIC currently ranks seventh in terms of new business premium among life-insurance companies in Shanghai.
Company (ICLIC). ICLIC completed its first full year of operations in 2003 and is now ranked fifth in Dalian based on 2003 total premium written. ING’s fund management joint venture,
— Operating profit before tax up 19%, excluding a one-off gain in 2002 — Almost 60% of new business generated in Asia, underlining the strong growth potential of this region — Good performance in Australia and Japan — Working on products with a larger unit-linked or participating element in Taiwan to counter impact of low interest rates
In 2003, ING Antai in Taiwan opened the doors of its brand new ‘café’, where Taiwanese citizens can update their knowledge on various financial matters in a relaxed atmosphere. The proceeds from the coffee sales are given to charity.
ING is active in Korea with banking, insurance and asset management. Here an advertisement depicting a customer now and in 20 years. ING is keen to capture a greater share of the growing market for retirement and pensions products.
Bank and a 26% share in life-insurance jointventure company, ING Vysya Life. ING Vysya Bank has 3% market share in deposits and over 400 branches. ING Vysya Life launched several new products in the second half of 2003 with strong initial sales. ING Mutual Funds, the investmentmanagement company, promotes a range of mutual funds through an independent distribution network. In Thailand, ING Life continues to build further scale with strong growth in new business and agents. ING ranks number eight in Thailand with over 3,700 agents.
has deepened its relationships with regional banks with sales support and training to enhance operating efficiency and quality of sales.
Towards Performance Excellence In 2003, ING Asia/Pacific rolled out the Towards
Performance Excellence (TPE) strategic framework in all business units. This is a type of balanced scorecard to more effectively manage a diverse range of businesses in the region. The
In 2004, ING Asia/Pacific will continue to focus on its key strategic priorities. Given the importance of joint ventures in the region, special emphasis will be placed on deriving value from these joint ventures. As the businesses in India and China gain momentum and size, their changing needs will require management focus and strategic input. Regulatory changes in the pensions area are expected to create new business opportunities in various countries in the region.
ING was one of the fastest-growing international companies in Korea — Organic premium income in China, India and Thailand up 75% — In 2004, focus on the joint ventures
Strategy and results ING is one of the leading asset-management organisations in the world, offering a complete range of investment products to meet the needs of both institutional and retail investors. The business lines include institutional asset management, mutual funds, managed accounts, real estate, alternative assets as well as trust services.
188 billion), for institutional clients (EUR 126 billion) and ING’s insurance subsidiaries (EUR
149 billion). With 74% of the total assets under management within the Group, ING Investment
Despite the weakening of the dollar against the euro, which adversely affected ING’s assets under management by EUR 38 billion, assets under management increased by 3.1% from EUR
After the US, the European regulatory bodies have also started to implement stricter rules and regulations to enhance good corporate governance in listed companies. Institutional investors are being faced with many changes as a result of developments in the corporate-governance debate. ING Investment Management will take initiatives to help its institutional clients address the resulting challenges, among others by developing a proxy-voting policy for its European funds.
ING continues to improve its investment engine in order to stay a successful asset manager.
Investment performance Investment performance remains the key yardstick to measure the quality of ING’s investment engine. The upturn in the markets after the first quarter of 2003 helped ING’s investment managers to generate a positive performance. In terms of long-term performance 54% of ING’s fund assets delivered an above-median performance compared with their peers and 54% of ING’s fund assets outperformed their relevant benchmarks.
(31% of the funds with a star rating) represent a total of EUR 14.4 billion and show ING’s strong position in the mutual-fund market.
The world economy showed signs of recovery in 2003. From the lowest rate in March, the rise in the stock markets was almost 30%. ING’s asset-management business profited from this upturn.
Assets under management up to EUR 463 billion 3.1% — Solid organic net inflow of EUR 11 billion — Functional pre-tax profit improved by 64% to EUR 431 million — Reorganisation worked as a stimulus for cross-regional sales and leveraging investment expertise
ING IM was able to take advantage of the rebound of the equity markets and a number of its businesses enjoyed good growth in assets and client numbers.
upgraded its marketing and sales efforts with a larger focus on distribution of investment products. Substantial progress was made in the use of the internet for information and reporting to institutional clients. Throughout the year efficiency was increased by maintaining strict cost management and streamlining the processes.
Because of the depth of team expertise and exceptional performance records, ING was mandated for over USD 1 billion by eleven new institutional fixed clients. Within ING IM’s alternative asset strategies in the US, the hedge fundof -funds products strive to provide absolute positive returns through all market conditions.
“Qantas Superannuation is one of the largest corporate pension funds in Australia with almost AUD 4 billion in assets and a reputation for excellence. Critical to that reputation is the performance of our investment managers. ING Investment Management epitomises the strength of the ING brand with high service and performance levels across a decade-long relationship with Qantas.”
Baring Asset Management Baring Asset Management (BAM) has two business units: the Investment Management Group and the Financial Services Group. BAM manages assets in developed and emerging equity and bond markets on behalf of institutional and private clients world-wide.
BAM changed from a market-driven company to an investment product-oriented company and has focussed successfully on strengthening the relationship between the investor and the client.
It is responsible for ensuring that standards of client service are maintained globally and it makes sure that new business opportunities are identified and acted upon.
During 2003 the management structure of the Baring Financial Services Group was reorganised along functional lines based around the three main businesses of fund administration, offshore banking and custody, and trustee services.
Netherlands, showed good sales results in 2003 despite the difficult circumstances in the venture -capital markets. The last quarter showed a noticeable improvement. The size of the portfolio amounted to EUR 500 million. The 2003 profit contribution was quite satisfactory. Parcom will continue to focus on mid-corporate buy-outs in
In 2003, ING reached an agreement in principle with Baring Private Equity Partners (BPEP) for a management buy-out. While ING continues to regard private equity as an attractive asset class to invest in, this agreement is in line with ING’s strategy to focus on its core business.
Outlook The challenge for the financial-services industry as a whole, and therefore also for ING, is to rebuild trust among retail customers in investment products. Asset Management will contribute to investing in a trustworthy ING brand by optimising affiliate customer servicing and investing in performance improvement.
ING will continuously evaluate and fine-tune investment processes, increase style and risk diversification in equity products and develop new fixed-income and structured products. The focus will also remain on risk management, cost containment and synergy.
Strategy ING Direct’s strategy is simple: providing financial services in large mature markets at low cost.
ING Direct distributes these products via three major channels: the call centre, internet and mail.
‘Interactive Voice Response’. After account opening, more than 75% of customer interactions are performed through these fully automated channels. ING Direct cafés and co-operation with intermediaries and tied agents from sister companies and third parties also drive sales. ING Direct uses these ‘face’ channels to sell other products like mortgages. Nevertheless, ING Direct will always focus on designing products specifically so as to be able to sell them via the direct channels.
UK attracted over 305,000 clients and EUR 11.5 billion in funds entrusted. Also in 2003, ING
ING Direct USA experienced strong mortgage growth in 2003. In Spain, ING Direct launched a mortgage campaign.
Direct. The loyalty of the ING Direct clients is high. For ING Direct as a whole, less than 5%
in funds entrusted to a total of 8.5 million clients and almost
EUR 100 billion funds entrusted. At the same time the mortgage business, ING Direct’s second core product line, grew with EUR 7.7 billion (58%) to a level of EUR 21 billion. ING Direct operates in a very competitive market, but the strength of its business model and execution capabilities will help to ensure future success.
favourably as well, it is now over 70%. Based on retail funds entrusted, ING Direct has now reached a position among the top-ten banks in five countries, which shows the strong market position of these business units in their respective countries.
Australia, Spain, USA and Germany. ING Direct’s savings business in Canada, the US and Australia already exceeded the ING Group pre-tax RAROC
Operational efficiency of ING Direct has improved substantially. The operational cost/asset ratio fell from 59 basis points in 2002 to 49 basis points in 2003. ING Direct puts strong emphasis on operational efficiency, as it is one of the most important sustainable competitive advantages, allowing ING Direct to position itself as a competitive and profitable player in all markets.
Risk Very strict credit and market-risk management, next to good operational-risk management, help to control the strong growth of ING Direct.
ING Direct keeps testing the business model for interest-rate risk and liquidity risk. These tests conclude that ING Direct is flexible and resilient and able to cope with severe interest changes.
Outlook ING Direct will continue to focus on growth of its savings business in all the existing business units, in order to consolidate scale to produce profits and exceed the Group’s RAROC hurdle rate.
clients in thousands, funds entrusted in billions of euros (at year-end)
Stakeholder dialogue Stakeholder dialogue is an integral part of ING’s commitment to responsible entrepreneurship.
Equator Principles In 2003, ING endorsed the Equator Principles, along with other international banks. By endorsing the Equator Principles, ING will only finance projects in the developing world that fulfil certain social and environmental criteria. The principles are based on the guidelines of the
ING will continue to implement the Principles in its internal organisation.
Some of ING’s most successful products and services contribute to sustainable development. An example is setting up life-insurance activities in developing markets. These life companies make an important contribution to Group profit, but they also help develop the financial sector in developing markets. That is because providing life insurance stimulates long-term contractual saving. This is a condition for growing local capital markets.
ING’s strategy. As a global financial-services provider, ING is active on all of the world’s major capital markets and handles millions of daily transactions. As an asset manager, ING invests billions of euros on behalf of pension funds and other institutional investors. ING has a responsibility to conduct its day-today business in an ethical as well as socially and environmentally sustainable manner.
In the same way that ING strives to tailor all products and services to the needs of its clients,
adopted new general procurement terms and conditions to govern its relationships with business partners. One of the new standards states that ING will only do business with companies of unquestionable reputation regarding ethical, environmental, and so ciety-related issues. By including these conditions in its contracts, ING
For an overview of ING’s vision, activities and performance with respect to CSR during 2003, please see the ING in Society 2003 report.
CSR and Investor Relations ING believes CSR is an important issue for investor relations and that managing ethical, social and environmental risks has a positive impact on long-term market value. Conversely, unethical behaviour can cause serious financial and reputation damage. Breaches of business principles can have a direct negative impact on the Group’s capital position and earnings. That is why the
ING’s relationship with the socially responsible investment (SRI) community continued to flourish in 2003. The Investor Relations and
ING ‘CSR Bank of the Year’, and ING received good ratings by various independent providers of SRI research.
The nature of these activities depends on the needs of the local community. In India, ING supports the Christel House in Bangalore, which provides shelter and schooling to orphans and street children. In Bulgaria, ING developed a website to
The ING in Society 2003 report will be published in April 2004
In 2003, the Leadership Pipeline Curriculum was launched on the intranet, which focuses on the leadership skills managers need for the job they are in now, and for the next job they aspire for.
Eleven of ING’s most senior leaders participated in the first ING Leadership Expedition. The group met several times to discuss issues that are critical to ING in its future and to learn from best practices. Another expedition with twelve executives will be organised in 2004.
Another online tool is ING Talent Track, a webbased system that includes 2,000 employees. This system was enhanced to allow MD professionals to search for capabilities within the Group.
HR delivery models are changing. More and more e-tools, like e-learning and the global Job
Vacancies site, are now available. Some 90,000 employees through 25 country links now have access through the intranet to the job openings within the Group.
Performance and Reward ING continues to reinforce performance management throughout the organisation, with some tools now online.
H U M A N RE S O U RC E S
In a continually changing business environment, ING seeks to offer the best products and services to its customers. Financial services are first and foremost a people business and ING relies heavily on its intellectual capital. It is the responsibility of
Corporate Human Resources & Management Development to develop and execute ING’s overarching people strategy and provide employees with the best opportunities to deliver on the customer promise. Top priorities are talent management, performance management, education and support for ING’s cultural evolution.
Diversity is all about valuing the variety of people that work for ING, no matter whether they are female, male, old, young, disabled, gay and regardless of people’s ethnic backgrounds, communities and religions. ING wants to make sure that every voice is heard, valued and adds to the greater organisation.
ING is making good progress in diversity, supported by the Diversity Council and regional diversity councils, which are now in place in the
Employee opinion surveys ING wants to give its employees avenues to share their issues, for example by conducting employee opinion surveys on a regular basis.
Americas, Australia and the Netherlands, representing some 35,000 workers (about 1/3 of the workforce). Some of the positives mentioned were that people generally like their job and that in their minds the customer comes first.
The survey also shows that we could do more in career development at middle and lower management of the organisation. The global job-posting system and e-learning tools will help address this issue.
The survey further showed that employees think ING pays appropriately. However, it could do a better job in allocating the rewards, as they feel there is not enough differentiation between high versus mediocre performers.
We expect our people to be flexible, to take initiative and come up with ideas. So far, we have been able to attract talent and have incurred very low turnover. We are thankful to have such a dedicated and flexible workforce.
Balancing risk, return and capital Because of the size of ING, its wide diversity of activities, types of clients and geographic regions, ING has comprehensive risk-management procedures on all levels within the
The credit exposure of ING Bank is mainly related to traditional lending to private individuals and businesses. Loans to private individuals are mainly mortgage loans secured by residential property. Loans to businesses are often collateralised but can be granted on an unsecured basis if supported by internal analysis of the borrowers ’ creditworthiness. Credit exposure arises also from our trading activities for instance in derivatives, repurchase transactions and securities lending/borrowing.
Country Risk In countries where ING is active, the risk profile is regularly evaluated, resulting in a country rating. Based on this rating and ING’s risk appetite, country-risk limits are defined. Country-risk limits are assigned for transfer risk, generally only in developing markets. The amount of developing-markets transfer risk as a percentage of total retail and wholesale lending activities decreased from 6.0% in 2002 to 4.6% in 2003.
Exposure is closely monitored for economic country risks, although no formal limits are established.
Credit risk ING Insurance Within the insurance companies the investment mandates specify the credit risk appetite by type, quality and duration of security. For the investment portfolios backing the insurance liabilities, ING Insurance’s policy is to maintain a diversified credit fixed-income investment portfolio within acceptable internally and externally
driven parameters. The average credit rating of the general account fixed-income portfolios is shown in the table.
Debtor provisioning For insurance credit risks, a provision for loan losses is maintained that is considered adequate to absorb losses arising from the existing insurance investment portfolios. The provisions are reviewed on a quarterly basis. They amounted to
EaR measures the potential change in the expected (interest) earnings over the next 12 months resulting from an instantaneous rise of interest rates by 1%.
Market risk ING Insurance The risk of loss occurring through adverse changes of prices in the financial markets is quantified in extensive Asset & Liability Management (ALM)
P&L. The market risk of ING Insurance is mainly related to interest-rate risk and equity risk. In 2003, specific focus has been on the low interest-
Investment Grade: 1-10 57.1% 46.5% Aaa - Baa3 AAA - BBB1. Based on retail and wholesale lending activities.
ACTUARIAL AND UNDERWRITING RISKS ING is exposed to life and non-life insurance risks.
Actuarial risks arise with respect to the adequacy of insurance premium rate levels and provisions with respect to insurance liabilities and capital position. Specific attention is given to the adequacy of provisions for the life business. ING is of the opinion that its insurance provisions are adequate. Underwriting risks are inherent in the process whereby applications submitted for insurance coverage are reviewed. The maximum underwriting exposure is limited through exclusions, cover limits and reinsurance.
LIQUIDITY RISK Liquidity risk is defined as the risk that ING cannot meet its financial liabilities when due.
OPERATIONAL RISK ING’s policy is to manage operational risks through clear governance, an embedded operational risk management function, and the implementation of comprehensive operational risk identification, measurement, monitoring and mitigation processes. All business managers are responsible for establishing specific internal policies, procedures and controls and for continuously monitoring and controlling of the operational risks. At the various organisational levels, the Operational Risk Management departments aim at supporting general management.
More information A comprehensive chapter on risk management has been added to the separately issued Annual
United States (US GAAP) and the rules of the American Securities and Exchange Commission (SEC) has been included in the annual accounts. The formal filing with the SEC in accordance with US GAAP is published as Annual Report on Form 20-F.
Availability of Annual Accounts and Form 20-F The Annual Accounts (Dutch and English) and Annual Report on Form 20-F (only English) are available as PDF files on the ING Group website (www.ing.com/group) and can also be ordered in print by: e-mail: via www.ing.com/group, button ING Publications mail: P.O. Box 258, 5280 AG Boxtel, The Netherlands
A u d ito r’s R e p o rt 47Annual Report 2003 · ING Group
Other components of comprehensive net profit: — unrealised revaluations 528 -3,343
Net profit not recognised in the consolidated profit and loss account -595 -4,384
Realised revaluations previously recognised in shareholders’ equity are released from shareholders ’ equity to the profit and loss account. 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.
Group acquired Entrium from Fineco/Capitalia (Italy). The goodwill amounted to EUR 100 million and is charged to Shareholders’ equity.
BGAG, the investment company of a number of German trade unions. In this way, ING owns all shares in DiBa. The goodwill amounted to EUR 9 million and is charged to Shareholders’ equity.
In 2003, ING Group sold its 49% shareholding in Seguros Bital to Grupo Financiero Bital S.A. The value of the transaction was EUR 126 million. The result on the sale amounted to EUR 44 million.
In 2002, ING Group increased its 49% stake in DiBa to a 70% interest by acquiring a further share participation in DiBa from BGAG. The figures of DiBa are fully consolidated, without deduction of a third-party interest.
In 2002, ING Group and ANZ, one of Australia’s major banks, have formed a funds management and life insurance joint venture called ING Australia. The company is 51%-owned by ING and 49%-owned by ANZ. The joint venture has been proportionally consolidated.
As part of the transaction, the new joint venture acquired net assets from ANZ. This resulted in goodwill of EUR 169 million that is charged to Shareholders’ equity. Furthermore, ING Group contributed net assets to the new joint venture, which resulted in a net result of EUR 469 million.
Provision for life policy liabilities 119,830 125,945 2,947 5,085 116,883 120,860
Income from investments in land and buildings and shares and convertibles includes realised results on disposal of EUR 425 million (2002: EUR 1,357 million).
Income from investments for risk of policyholders of EUR 9,973 million (2002: EUR -10,642 million) is not included in Income from investments of the insurance operations.
This item includes the interest income and interest expense, results from interest-rate arbitrage, results from financial instruments to the extent that these serve to limit interest-rate, and lending commission.
In 2003 the growth of the average total assets caused an increase of the interest result with EUR 689 million (2002: EUR 541 million). The decrease of the interest margin with 4 basis points caused a decrease of the interest result with EUR 220 million (in 2002 the increase of the interest margin with 23 basis points caused an increase of the interest result with EUR 1,033 million).
S u m m a ry a n n u a l fig u re s
ING Group evaluates the results of its segments using financial performance measures called operating profit before tax and operating (net) profit. Operating (net) profit is defined as (net) profit excluding: — capital gains and losses on equity securities,
— realised gains on divestments that are made with the purpose of using the proceeds to finance acquisitions.
Group’s consolidated financial performance, ING Group believes that the presentation of operating results enhances the understanding and comparability of its performance by highlighting net income attributable to ongoing operations and the underlying profitability of the businesses.
Additions to the provision for loan losses 1,125 1,435 1,125 1,435
Income between geographical 1. Mainly related to reinsurance premiums ceded between group companies in different geographical areas.
Economic capital is defined as the amount of capital required to bear the economic risks created by the activities of the company at the company’s desired level of comfort. ING uses a confidence interval of 99.95% – consistent with our target debt rating (AA/Aa2 long term) – and a one-year time horizon.
The total pre-tax RAROC for the banking operations corresponds to an after-tax RAROC of 13.1%
The percentages shown by risk category reflect all diversification effects, including risk reduction between the risk categories.
Diversification effects as a result of combining bank and insurance activities are not taken into account.
Embedded value is an indicator of the economic value creation as a consequence of selling and managing long-term contracts such as life insurance, annuities and pensions. It is defined as the present value of the future earnings arising from the business on the books, including its allocated capital, at the valuation date plus the free portion of capital and surplus. The value of new business is the embedded value added with sales during the year, and therefore provides insight into the expected profitability related to 2003 sales. Underlying assumptions (expenses, interest rates, mortality, lapse, etc.) reflect best estimates of future expected experience. Future earnings are discounted at a rate representing the cost of capital.
At the end of 2003, the total embedded value of ING’s life insurance operations was EUR 21,724 million compared to EUR 23,279 million at year-end 2002. The decrease mainly reflects the impact of adverse currency movements compared to the euro, and a lowered expectation of future investment returns.
The value of new business written during 2003 was EUR 440 million, compared to the 2002 level of
The value of new business fully reflects acquisition expense overruns, which represent the excess of the costs of acquiring new business over the expense allowances provided in product pricing. Such overruns may exist while new operations are achieving scale, while several businesses are integrating into one, or during a year when sales are lower than anticipated. During 2003, after-tax acquisition expense overruns were EUR 78 million, compared to EUR 133 million in 2002.
The primary reasons for the decline in the Americas embedded value is the decline in the US dollar relative to the euro. For Asia/Pacific, currency effects and changes to future assumed investment returns negatively impacted the change in embedded value for 2003. The Netherlands was also negatively impacted by lower future assumed investment returns.
— Financial variances in 2003 totalled EUR 64 million. Separate account growth in the US and equity returns in favourable equity returns in the Netherlands were offset by unfavourable returns on fixed income securities in the Netherlands.
— Operational variances reduced embedded value by EUR 56 million over 2003. This is the net impact of mortality, morbidity, expense, persistency, and other variances. There is no single material element in these variances.
— Discount rates decreased to reflect ING’s weighted average cost of capital. This increased the embedded value by EUR 556 million.
2. IRR = internal rate of return adjusted for expected currency movements relative to the euro.
Developing markets new business value of EUR 222 million, decreased by 8% from 2002 due to lower sales.
Certain business units have included the cost of options and guarantees in the reported results.
Watson Wyatt has concluded that the methodology adopted is appropriate and that the assumptions used are reasonable overall.
ING Group shares held and consolidation adjustments 25 449 25 447
— ING Bank N.V. (Tier 1 qualifying capital) 19,074 18,080 1. Includes EUR 396 million (2002: EUR 477 million) of subordinated loans to ING Verzekeringen N.V.
2. Includes EUR 2,256 million (2002: EUR 1,336 million) of subordinated loans to ING Bank N.V.
ING Bank Capital adequacy and the use of regulatory required capital are based on the guidelines developed by the Basel Committee on Banking Supervision (the Basel Committee) and European Community
1. Shareholders’ equity includes an amount of EUR 3,002 million that qualifies as innovative Tier 1 capital (dated and undated). EUR 2,402 million has been raised via the Trust Preferred Securities issued by ING Groep N.V. and EUR 600 million has been raised by ING Groep N.V. as perpetual subordinated loan.
2. Subordinated loans qualifying as Tier-1 capital have been placed by ING Groep N.V. with ING Bank N.V.
3. Dividend declared but not yet paid is deducted as it is not part of Tier-1 capital.
4. Revaluation reserve is deducted as it is not part of Tier-1 capital (included in Tier 2).
ING Insurance European Union directives require insurance companies established in member states of the European
Union to maintain minimum capital positions. The capital position of ING Insurance has been measured on the basis of this EU requirement.
Total banking operations (excluding ING Direct and the restructuring provision) 68.4 71.0
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 2003 financial year also saw holders of depositary receipts in the Netherlands being granted the right, for the first time, to cast votes indirectly via the Communication Channel to shareholders (Stichting Communicatiekanaal
States and the United Kingdom will also be able to vote by proxy on items included on the agenda for meetings of shareholders as of the General
These issues are discussed below and will also be on the agenda for ING’s General Meeting of
Corporate governance refers to the proper management and supervision of companies. The year 2003 was an important year from a corporate-governance perspective. ING amended its Articles of Association, as a result of which shareholders and depositary-receipt holders have actually the same position and got more powers. The Tabaksblat Committee’s report on the principles of good corporate governance and best practices was also published during the year. ING’s response to the recommendations of the Tabaksblat Committee, as well as information on capital and control, the Executive Board, the Supervisory Board and the external auditors are discussed in detail below. This chapter ends with the reports of the Trust Office ING Shares and the Trust Office ING Continuity.
In line with the Code, ING’s periodic meetings with analysts, such as those held after publication of the quarterly, half-year and annual figures, now can be followed simultaneously by telephone or webcast. The new procedure was introduced at the meeting following publication of the 2003 results in February 2004.
ING is prepared to take this best practice into account as a reference for new Executive Board members, provided however that the severance may be higher in an individual case depending on existing rights on severance pay, market practice, competitive considerations and other reasons that may give cause to agree upon a higher severance if needed to attract the right qualified person.
– Code III.5.6: “The audit committee shall not be chaired by the chairman of the supervisory board or by a former member of the executive board of the company.”
Changes in 2004 The Executive Board and Supervisory Board have decided to implement the Code as much as possible. The notice convening the General Meeting of Shareholders on 27 April 2004 has, for example, been drawn up in compliance with the Code.
The remuneration policy for the Executive Board will be an agenda item. Moreover, a proposal to amend the Articles of Association is included on the agenda for the meeting. The Articles of
Association will this year be brought into line with the best practices detailed in the Code.
One of the most significant amendments is the proposal to end the current requirement for a higher majority if a binding proposal for nomination to the Executive Board or Supervisory
Board is rejected or if it is proposed to dismiss a member of either Board. The proposed amendment also reduces the number of shareholders’
Upper House of Parliament. In February 2004, the Supervisory Board appointed a Company
The Tabaksblat Code recognises that existing contractual agreements should continue to be respected and that Dutch employment law needs to be amended if Board appointments are to be for limited periods of time. The contracts of existing Board members will not, therefore, be changed. Their appointments for an indefinite period of time will continue, while the existing arrangements in respect of severance pay will also be respected. In other words, they will receive a maximum of three times their most recent fixed annual salary.
– Code III.5.11: “The remuneration committee shall not be chaired by the chairman of the supervisory board…”
Board to be substantially involved in these discussions at an early stage.
will be discussed. Subsequently, the Code will be implemented as much as possible, taking into account the above-mentioned remarks and the discussions in the General Meeting of Shareholders. The implementation will be reported on via a continuously updated ‘corporate -governance charter’ on the website of ING
Depositary receipts Over 99% of the issued ordinary and preference shares are held by the Trust Office ING Shares. The
Trust Office issues bearer depositary receipts in exchange for these shares. The depositary re ceipts are listed (see page 5 for an overview of the stock exchanges). The depositary receipts can be exchanged, without any restrictions, for the relevant types of shares. A fee may be charged for this.
Office’s behalf, related to the shares held by the Trust Office. Holders of depositary receipts may vote as they see fit. Holders of depositary receipts not attending a meeting can also issue binding voting instructions to the Trust Office.
The Trust Office has made it easier for votes to be cast in this way by putting arrangements in place for proxy voting (see page 68).
Voting rights Each share entitles the holder to cast a vote at the General Meeting of Shareholders. In accordance with the statutory provisions, voting rights are proportional to the nominal value of the shares. In other words, each ordinary share
shares. Taking these aspects into account, we believe that the objections against the imbalance have been met.
General Meeting of Shareholders unless ING has major reasons for not doing so.
Issue of shares The company’s authorised capital is the maximum amount of capital allowed to be issued under the terms of its Articles of Association.
Executive Board to issue shares require the approval of the Supervisory Board.
Shareholders’ structure Details of investors who have reported their interest in ING Groep N.V. pursuant to the Dutch
Act on the Disclosure of Significant Holdings in Listed Companies are shown on page 5. ING
The way in which the Executive Board operates is detailed in a set of regulations approved by the
Executive Board and any loans or option rights granted to them, together with information on the policy behind such decisions, are provided in a separate chapter, starting on page 79 of this report. Members of the Executive Board are permitted to hold shares and depositary receipts for shares in the company for long-term investment purposes. Transactions in these shares are subject to the ING regulations for insiders.
In order to avoid potential conflicts of interest, ING Group has a policy that members of its Executive Board do not accept corporate directorships outside ING. The only exception is the membership of Fred Hubbell on the Board of Directors of The Macerich Company in the
US, a real-estate company. He held this position already prior to his employment with ING. ING
Executive Board may have with ING Group subsidiaries as ordinary, private individuals are not reported, with the exception of information on any loans that may have been granted to them
Group: May 2000. Joined ING (after the acquisition of Equitable of Iowa) in 1997. Chairman of ING Verzekeringen N.V. (ING Insurance).
Board of Directors of The Macerich Company in the US, a real-estate company.
July 1996. Joined ING in 1992. Former position: Treasurer-General, Ministry of Finance.
Former position: President of VNO-NCW (Confederation of Netherlands Industries and Employers).
April 2004. Cees Maas will become vice-chairman as of that date, besides his function of Chief
At the annual General Meeting of Shareholders on 27 April 2004, the Supervisory Board will propose appointing Eric Boyer de la Giroday (1952,
Financial Markets and Wholesale Banking, and a member of the Board of ING Belgium S.A. Eli
The Supervisory Board has drawn up a profile to be used as a basis for monitoring its composition and ensuring it retains an independent position.
Directors of ING. There is, however, a restriction in that only one in every five members of the
Supervisory Board may be a former member of the Executive Board. In addition, this member must wait at least one year after resigning from the Executive Board before becoming eligible for appointment to the Supervisory Board. Former members of the Executive Board are also not permitted to be appointed to the position of
Board’s committees. However, appointment to the position of chairman of a committee is only possible if the specific individual resigned from the Executive Board at least five years previously.
Remuneration and Nomination Committee and the Corporate Governance Committee. Copies of these regulations are available for inspection at the ING Group offices and may also be viewed on the ING Group website (www.ing.com).
Supervisory Board may have with ING Group subsidiaries as ordinary, private individuals are not reported, with the exception of any loans that may have been granted to them (see page 87).
Remuneration and share ownership The remuneration of the members of the
Group in respect of inside information also apply to these option rights.
Corporate Governance Committee. Current term of office: until the 2006 Annual General Meeting of Shareholders (AGM).
Other significant positions held: – Member of the Advisory Committee, Robert
Principal former position: Member of the Board of Directors of ReliaStar Financial Corp. First appointment to the Supervisory Board of ING
Principal present positions: Rector Magnificus and professor of labour law and industrial relations, University of Amsterdam. First appointment to the Supervisory Board of ING
Group: May 1995, also on the recommendation of the Central Works Council. Member of the
Remuneration & Nomination Committee and the Corporate Governance Committee. Current term of office: until the 2007 AGM.
Other significant positions held: – Member of the Supervisory Board of NUON
– President of the ILO Governing Body, Committee on Freedom of Association (United
Other significant positions held: – Chairman of the Supervisory Board of
Executive Board of Nationale-Nederlanden and ING Groep N.V. First appointment to the
Principal former positions: Minister of Finance and Prime Minister of the Netherlands. First appointment to the Supervisory Board of ING
Board of ING Group: October 1996. Member of the Audit Committee, the Remuneration
Other significant positions held: – Chairman of World Wildlife Fund Netherlands
EXTERNAL AUDITORS Ernst & Young and KPMG Accountants were appointed auditors of the ING Group for an unspecified period of time at the General
and ING Verzekeringen N.V. and its subsidiaries, while KPMG Accountants audits the financial statements of ING Bank N.V. and its subsidiaries.
The auditor’s report on the financial statements of ING Groep N.V. will be issued by Ernst &
Shareholders for the purpose of assessing the nomination for the appointment of the external auditor for the next term. ING believes that continuity in the relationship with the external audit firm is of great importance. ING shall consider the rotation of the leading partner of the firm at least every five year.
The following report is issued in compliance with the provisions in article 15 of the Trust Conditions for registered shares in ING Groep N.V.
In accordance with the changes to the corporate governance structure of ING Groep N.V., as decided upon by the Annual General Meeting of Shareholders on 15 April 2003, the Articles of
Association and the Trust Conditions have been amended by a deed dated 23 June 2003.
The name of the Trust Office has been changed to Stichting ING Aandelen (Trust Office
Trust Office are in complete accordance with the corporate-governance code of the Tabaksblat
The Board held three meetings. On 3 April 2003 the Board met to discuss the 2002 annual report and to prepare the Annual General
Board voted in favour of all voting items on the agenda. Excluding the shares held by the Trust
Office, about 0.85% of the total issued capital attended or was represented in the General
Group provided the Stichting with information on the company’s activities and performance over the first nine months of the reporting year. The Board subsequently met without the attendance of the aforementioned representatives of ING Group. The topics discussed in this meeting included the composition of the Board of the Stichting and the formulation of a Board profile.
John Simons and Huib Blaisse were reappointed as Board members from 1 September 2003.
In accordance with the provisions of article 7, section 3.8, the Stichting disclosed the proposed reappointments by publication in NRC
Grosheide, several other executive offices); Ton Regtuijt (former Executive Board member of Nederlandse Spoorwegen (Dutch Railways), several supervisory and advice offices); Ton Risseeuw (former Chairman of the
Each of the Board members was paid a remuneration of EUR 7,800 during the reporting year.
Stichting Continuïteit ING, established in Ams terdam, was founded on 22 January 1991. By amendment of the Articles of Association on 23 June 2003, the former name ‘Stichting Cumulatief Preferente Aandelen ING Groep’ was changed to Stichting Continuïteit ING (‘ING
Stichting with the right to acquire cumulative preference shares in the capital of ING Groep
N.V. up to a maximum of 900 million cumulative preference shares. The acquisition of cumulative preference shares by the Stichting is subject to the restriction that, immediately after the issuance of cumulative preference shares, the total amount of cumulative preference shares may not exceed one third of the total issued share capital of ING Groep N.V. If new shares other than cumulative preference shares are subsequently issued, the Stichting may again exercise its right, subject to the provisions of the preceding sentence. On acquisition of cumulative preference shares, at least 25% of the nominal value must be paid up on said shares.
ING are permitted to be a member of the Board of the Stichting. As a result, the composition of the Board is currently as follows: Ad Timmermans
Executive Board of ING Groep N.V. hereby declare that in their joint opinion the requirements concerning the independence of the members of the
Background Based on the outcome of a study, started in 2002, conducted by an external consultant on the market competitiveness of ING’s remuneration levels and mix, the Supervisory Board decided to progressively introduce a new remuneration structure for ING’s senior management. The introduction of this new structure was started in 2003.
Shareholders on 27 April 2004 and to seek approval for the new long-term incentive plan.
The prime objective of the study was to formulate a new remuneration policy for ING’s senior management allowing the company to recruit and retain qualified and expert managers. The design of the new remuneration should tie in with ING’s strategic objectives and support a performance -driven culture that aligns ING’s objectives with those of its stakeholders. ING intends to continue to reward performance on the basis of previously-determined, measurable and manageable short-term and long-term targets, using clear and understandable performance criteria. The variable part of the remuneration is designed to strengthen commitment to the company and its objectives.
– The remuneration elements will gradually be rebalanced in order to emphasise the focus on the variable pay components (short-tem and long-term incentives), so as to ensure that an increasing portion of senior management remuneration is directly linked to ING’s short-term and long-term business performance.
– ING will provide long-term incentives to ensure a focus on longer-term strategic targets, to create alignment of management with the interests of shareholders and to retain qualified and expert managers. A broad selection of ING’s
Executive Board compensation for 2003 and the compensation structure for 2004. In addition, information is included on loans and advances to the Executive and Supervisory Board members as well as ING Group shares held by members of both boards.
The chapter ends with information on the ING Group stock option plan.
Three financial measures were used in the 2003 short-term incentive plan (STIP) for the senior management to measure performance at Group level. These financial measures are: net operating profit, total operating expenses and return on economic capital.
By combining a profit, a cost and a return measure, the overall performance of ING is properly reflected. Each element is weighted equally to determine the final award. The three performance targets are set by the Supervisory Board at the beginning of the performance period. Under the short-term incentive plan, the actual payout in any year may vary between 0% and 200% of the target level.
Executive Board as the direct accountability of these managers for the Group results declines.
Long-term incentive plan In the overall evaluation of the remuneration components, the Supervisory Board analysed the original long-term incentive plan (LTIP) in 2003. The analysis assessed whether the instrument used (stock options only) supported the
Supervisory Board decided to introduce an additional instrument to the LTIP for the Executive
Participants will only be allowed to exercise options or sell part of the shares at the date of vesting to pay tax over the vested award.
The number of shares that will ultimately be awarded at the end of a 3-year performance period depends on the ING Group performance.
Shareholder Return over three years (return in the form of capital gains and reinvested dividends that shareholders receive in that period) relative to the performance of a pre-defined peer group.
On the basis of these criteria the performance peer group was composed as follows: – Citigroup, Credit Suisse, Fortis, Lloyds TSB
ING’s ranking within this group of companies will determine the final number of shares that will
The Supervisory Board will review the peer group before each new three-year performance period.
The performance test itself will be carried out at the end of every three-year performance period by an independent third party.
ING’s Executive Board and its peer group counterparts. Key recommendations from the report included that in order to close the gap, in particular the variable (performance-driven) pay component should be increased.
In line with ING’s overall remuneration policy, the Supervisory Board decided to introduce a gradual convergence of Executive Board salaries to the European/Dutch median benchmark over a three-year period, starting in 2003. This will be achieved by raising the target bonus levels of both the short-term and long-term incentives. This ensures that future payout will more directly reflect performance. As a result, the mix between base salary, short-term and long-term incentives is assumed to change such that over time the total remuneration will be divided equally between each component (i.e. 1/3rd base salary, 1/3rd short-term incentives, and 1/3rd long-term incentives) in case of at-target performance.
Executive Board are based on defined benefit plans, which are insured through a contract with
Nationale-Nederlanden Levensverzekering Maat schap pij N.V. The Employment Contract will terminate by operation of law in case of retirement
Executive Board members reach the age of 61 or 62. Prospective pensions amount to a maximum of 60% of base salaries. According to existing employment contracts, the pension rights of the members of the Executive Board are free of premium. The non-Dutch members of the Executive
Board members are appointed for a period of four years (the appointment period) and that they can then be re-appointed by the General
For newly appointed Executive Board members the amount they would be entitled to in case of an involuntary exit has been set at a multiple of their new Executive Board member base salary, such that their existing rights are preserved. For the three Executive Board members that are nominated for appointment in the 2004 General
Meeting of Shareholders these rights slightly exceed the exit arrangement as prescribed by the Tabaksblat Code, i.e. no more than two times base salary (first appointment period) or one time base salary (all other situations). For the existing Executive Board members the exit clause has been set at three years base salary.
Board members is three months for the employee and six months for the employer.
Base salary Executive Board 2003 Until recently, the base salaries of the
Executive Board were reviewed every two years through a comparison with peer companies.
Labour Agreement (CAO) for all Dutch employees resulted in an increase of base salary by approximately 15% over the period 1999-2003.
on individual objectives set at the beginning of the year by the Supervisory Board.
against the 2003 targets set at the beginning of that year. Over 2003, ING significantly exceeded the three targets set, resulting in a payout of 175% of target. The difference between actual
Under the proposed new long-term incentive plan (LTIP) for the Executive Board, two instruments are used: stock options and performance shares. As mentioned earlier, an identical plan has been adopted by the Executive Board for the top senior managers across ING. As a result, more than 7,000 senior managers will participate in a similar plan.
(2) Options are granted in the year following the reporting year.
The vesting period for the conditional shares is two years. The total expense relating to the conditional share awards (EUR 604,000) is to be recognised pro rata over the vesting period. Accordingly, an amount of EUR 189,000 was recognised in 2003.
(assuming a share price of EUR 20 for 2003), granted to the board for performance over the year specified.
PENSION COSTS OF THE INDIVIDUAL MEMBERS AND FORMER MEMBERS OF THE EXECUTIVE BOARD (1)
OF OPTIONS GRANTED TO THE MEMBERS OF THE EXECUTIVE BOARD AS AT 31 DECEMBER 2003 number of options amounts in euros
These loans are in the normal course of business and on terms applicable to the personnel as a whole and approved by the Supervisory Board..
Policy for 2004 With regard to the remuneration policy for 2004, the Supervisory Board plans to further build on the new remuneration policy initiated in 2003, further emphasising the movement toward a more performance-oriented culture. The intention is to continue the gradual convergence to the European/Dutch benchmark through a gradual increase in the short and long-term incentive target levels (as a percentage of base salary).
Supervisory Board has decided to increase the target short-term incentive to 50% of base salary. The actual payout may vary between 0% and 200% of the target level (e.g. between 0% and 100% of base salary).
ING GROUP SHARES HELD BY MEMBERS OF THE SUPERVISORY BOARD1 number of shares
Karel Vuursteen 1,510 1,510 1. ING Group shares of direct family included; members of the Supervisory Board (including direct family) not mentioned in this table did not hold ING Group shares.
Board was EUR 1.8 million at an average rate of 4.7%. This amount concerns a loan to Aad Jacobs of EUR 1.6 million at an average rate of 4.7%
Jacobs. No loans and advances were outstanding to other members of the Supervisory Board.
Group shares to a number of senior executives (members of the Executive Board and the Executive Committees, general managers and other officers nominated by the Executive
The option rights are valid for a period of five or ten years. Option rights that are not exercised within this period, lapse. Each year, the ING
The fair values have been determined by using an option-pricing model. This model takes the risk-free interest rate into account, as well as the expected life of the options granted, the expected volatility of the depositary receipts for
NUMBER OF OPTIONS OUTSTANDING AND EXERCISABLE, ANALYSED IN ACCORDANCE WITH YEAR OF ISSUE AND EXERCISE PRICE
1. The options of former members of the Executive Board are included in the movements in option rights of employees.
The weighted average fair value of options granted in 2003 was EUR 3.64 (2002: EUR 6.78; 2001: EUR 8.71).
SUMMARY OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE AS AT 31 DECEMBER 2003
PRO FORMA RESULT IF STOCK OPTIONS WOULD HAVE BEEN RECOGNISED IN THE PROFIT AND LOSS ACCOUNT1
These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties.
(vii) currency exchange rates, (viii) general competitive factors, (ix) changes in laws and regulations, and (x) changes in the policies of governments and/or regulatory authorities. ING
ING is committed to respecting the rule of law. The prime consideration is that ING is a commercial organisation and its activities are therefore business-orientated. ING does not intervene in political or party political matters. Nor does it make gifts or donations to political parties. However, within the legitimate role of business ING reserves the right
Cultural, sport and environmental activities are a central part of ING’s community relations policy, and individual employees are encouraged to play a positive role in community activities.
Criteria for credit and investment decisions are primarily economic and, while respecting the wishes of clients, also take into account a range of social and environmental considerations.
ING employees may not enter into – and must avoid the appearance of engaging in – securities transactions based upon insider trading or misuse of confidential information.
Relationships with employees in all parts of ING are based upon respect for the individual. The Group aims to provide all its employees with safe conditions of work, and competitive terms of employment. ING is committed to equal opportunities and the avoidance of discrimination. Sexual or racial harassment is unacceptable. Personal career development will be encouraged through progressive personnel and training arrangements.
ING recognises the many benefits of a competitive environment. However, the best markets flourish only within an ethical framework, and no one in ING is permitted to disparage a competitor or to use unethical means to obtain any advantage for ING.
Any changes or waivers of these Business Principles will, to the extent required, be promptly disclosed as required by applicable laws, rules and regulations.
ING expects all its employees to respect the rule of law and abide by applicable laws and regulations. Furthermore, ING employees are expected to avoid doing business with any individual, company or institution if that business is connected with activities which are illegal or which could be regarded as unethical.
All employees are expected to handle information with care. In particular, the confidentiality of all proprietary information and data processing should be safeguarded in accordance with applicable laws and regulations. Proper and complete records must be made of all transactions on behalf of ING.
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Key to ING’s retail business is its distribution philosophy of ‘click-call-face’. This is a flexible mix of internet, call centres, intermediaries and branches that enables ING to deliver what today’s clients expect: unlimited access, maximum convenience, immediate and accurate execution, personal advice, tailor-made solutions and competitive rates. ING’s wholesale product offering focuses strongly on its strengths in employee benefits/pensions, financial markets, corporate banking and asset management.
Strategic objectives* ING Group’s strategic objectives are as follows: 1. Strengthen the capital base and improve other key ratios to maintain a solid financial foundation.