ING’s operational net profit increased by 6.1% to  4,252 million and operational net profit per share advanced by 5.3% to
Indirectly, ING was confronted with (re-)insurance claims relating to the WTC disaster. After external catastrophe cover of
 100 million and internal charges to catastrophe provisions, the total loss after tax in the 2001 annual results was
I N T E G R AT I O N I N U N I T E D S TAT E S
ING’s insurance activities progressed as planned. In December 2001, the next step in the ongoing integration process was announced together with an expense reduction programme to counter the impact of weaker market conditions.
ING Furman Selz Asset Management. ING Aeltus had  69 billion in assets under management at year-end 2001.
I N T E G R AT I O N O F W H O L E S A L E
ING Direct delivered another year of record growth by doubling its client base and funds entrusted. At year-end, total clients stood at 2.6 million and funds entrusted at  24 billion.
Germany in which ING expanded its 49% stake to a majority interest of 70% in February 2002.
P E N S I O N S J O I N T V E N T U R E I N
BHW Invest FT, a joint venture to enter the newly defined field of pension products based on the new ‘Riester’ legislation.
BHW Invest FT has already received its first mandates from pension funds.
I N G A N D A U S T R A L I A N B A N K A N Z
EMPLOYEES (average full-time equivalents) 50 ,650 49 ,030 46 ,980 52 ,140 55 ,990 1) Restated. 2) Excluding ING Direct.
2001 was a tough year in several respects. The slowdown in economic growth in most of our key markets was aggravated by the terrorist attacks in the US on September 11. This cast a shadow over the entire year, not only financially, but also socially and politically.
Mainly through our new US subsidiary ReliaStar, we were confronted with unexpected large reinsurance claims totalling approximately  600 million from workers’ compensation insurance contracts of some large companies based in the World
The new edition of ‘ING in Society’ will become available this summer.
Our 50 million clients expect value for money and excellent service.
It is my personal conviction that by balancing these interests, we will ultimately deliver added value for the benefit of all our stakeholders.
Reliability, transparency and quality at a fair price are essential elements to obtain a ‘licence to operate’. All of us at ING realise that we have to earn that licence every day, in all our activities.
We have set ambitious goals. We intend to be a leader in our core countries. We want to rank among the world’s ten largest financial services companies and be among the top five in Europe and the US.
We already are the number one international life insurer in Latin
A global ING brand will help us to build a reputation that ING is an innovator and offers different solutions to financial needs of individuals, families, corporations and institutions. From a multitude of local labels, we are transforming to one powerful ING brand, based on one ING culture. The progress that we have made in 2001 is substantial.
In difficult economic circumstances, ING managed to uphold its 11-year track record of uninterrupted profit growth and closed the 2001 accounts with a 6.1% increase in net operational profit and a 5.3% rise in profit per share. We recorded this profit growth thanks to our broad business mix, the confidence of our clients and business partners, and the hard work of our staff.
M E S S A G E F R O M T H E C H A I R M A N
Our human resources policy is aimed at attracting, developing and retaining talent throughout ING. In the same vein, we will continue to support the intermediaries we work with. Professional advice will continue to have a distinct added value in assisting clients to select the products that best suit their needs. My colleagues in the Executive Board join me in thanking our clients and shareholders, our staff and our business partners for their confidence in ING. We will do our utmost to make 2002 a successful year!
Chairman Ewald Kist in front of the new ING head office in Amsterdam, which will be ready mid 2002.
Key to ING is its distribution philosophy: ‘click–call–face’. This is a flexible mix of internet, call centres, intermediaries and branches with which ING can fully deliver what today’s clients expect: unlimited access, maximum convenience, immediate and accurate execution, personal advice, tailor-made solutions and competitive rates.
Business Principles. These principles are based on ING’s core values: responsiveness to the needs of customers, entrepreneurship, professionalism, teamwork and integrity.
ING culture. The long-term financial targets are an average annual growth of operational net profit per share of at least 12%, an average annual operational net return on shareholders’ equity (ROE) of at least 18% and improving efficiency ratios.
ING USA consisted of a variety of companies under their own brand name.
ING brand. The campaign “It’s not an ending. it’s a beginning” was designed to build awareness of the ING brand in the US market, thereby supporting the sales and distribution networks. Its key message was to demonstrate
Scottish comedian Billy Connolly plays the role of the critical customer. The target was 70% aided name awareness after four weeks. Awareness levels went up to almost 90%, which proves the big success of the campaign.
Nothing feels better when you’re old and gray than nice, warm equity.
Among the world’s best known 100 brands, there are only four financials. Though the contacts are frequent – either personal, by phone, mail or internet – financial services companies have apparently not succeeded in reaching the hearts and minds of their customers. This presents a window of opportunity for ING in building a global brand.
Rebranding – the transfer from the local name and logo to the ING name and the orange lion – is one part of the mission.
The other is loading the ING brand in such a way that it conveys the same associations to stakeholders all over the world. This repositioning aims to achieve that ING is perceived as a company that offers different solutions to financial requirements than its competitors. As a pioneer in combining insurance, banking and asset management and in applying various distribution approaches, ING built a reputation as an innovator in the financial sector.
Eastern Europe, Asia and Australia, as well as the wholesale and asset management operations have meanwhile adopted the
ING name and logo. The Belgian companies have chosen a two-step route to switch to the
The length and the approach of the rebranding project vary by country, company and type of business.
The repositioning process is inextricably bound up with the corporate culture. It is absolutely vital that all employees know what the ING brand stands for.
E X E C U T I V E C O M M I T T E E S
I N G E U R O P E I N G A M E R I C A S I N G A S I A / PA C I F I C I N G A S S E T M A N A G E M E N T
Direct formula, at the moment seven operations on various continents, lies also with ING
Europe. The same applies to private banking operations and the global wholesale banking activities, including former ING
I N G A M E R I C A S
After the acquisition of Equitable of Iowa in 1997 and ReliaStar and Aetna Financial Services in 2000, ING became one of the top-5 life insurers in the US. In
enjoys a strong position in life insurance, non-life insurance and mutual funds in Australia.
Asset management is ING’s third core activity, alongside insurance and banking. The activities, which are organised on a world-wide basis, comprise the asset management of ING’s insurance companies, the management of ING’s mutual funds, asset and relationship management for institutional investors, real estate, private equity and venture capital activities.
I N S U R A N C E ING’s life insurance and pension products range from guaranteed-benefit to investment-linked products. In several core markets, ING also provides insurance cover for risks such as fire and property, motor, health, accident and disability.
S AV I N G S ING offers a full range of savings instruments, from basic savings deposits to ING Direct’s high return, no fees Internet savings accounts and sophisticated products that combine savings and investments.
P E R S O N A L L O A N S A N D M O R T G A G E S From a credit limit on a current account to a mortgage loan tied to a securities portfolio, ING can provide the ideal finance form for most situations in all countries where it offers full retail banking services.
P R I VAT E B A N K I N G Private banking products and services offered include investment management, portfolio management, pension planning, lending, estate planning and trust services.
C O R P O R AT E L O A N S ING offers corporate clients all types of credit: from a current account overdraft facility to a bridge loan for a takeover deal. Specialisations are trade and commodity finance and structured-finance capabilities.
ING for sales, trading and distribution of equity and debt-market products, including research, treasury, foreign exchange, money markets and derivatives. ING also offers custody and administration of securities portfolios as well as integrated brokerage, cash and derivatives clearing, settlement and securities lending.
I N S T I T U T I O N A L C L I E N T S
I N S T I T U T I O N A L I N V E S T M E N T M A N A G E M E N T Institutional investors can tap into ING’s experience in asset management in the form of discretionary portfolio management or by participating in pooled funds and mutual funds.
R E A L E S TAT E Developing, financing, managing and investing in real estate require specialised skills. As the second largest real-estate investor in the world, ING has demonstrated its command of these skills. To institutional investors, ING offers a family of real-estate funds focusing on retail property, offices and residential property.
C A S H D I V I D E N D O N LY
ING abolished the optional stock dividend as from the final dividend 2000. The current policy of cash dividend prevents dilution of the profit per share. Also, as a consequence of income tax changes in the Netherlands per 1 January 2001, the stock dividend lost its appeal to Dutch private shareholders.
ING Group warrants B as the only currently valid category of warrants.
Depositary receipts for preference shares are listed on Euronext Amsterdam. Warrants B are listed on the Amsterdam and Brussels stock exchanges. Short-term and long-term options on
Meeting of Shareholders on 17 April 2001. The split halved the nominal value of the (depositary receipts for) ING Group ordinary shares from
I N V E S T O R R E L AT I O N S
I N F O R M A T I O N F O R S H A R E H O L D E R S
(Depositary receipts for) preference shares of EUR 1.20 nominal value 87 .1 87 .1
It is clear that these events will only strengthen our policy toward sustainable development. As a worldwide provider of financial services, ING has an important economic function in society. Many of our products and services, like mortgages and pension schemes, imply a long-term financial relationship and commitment. By providing these products and services to more than 50 million customers all over the world, it is essential that we maintain the trust of our clients in the many different countries and cultures we operate in. This is one of the reasons ING created sustainable ways of doing business and developed corporate values and business principles which apply to all its business operations.
T R A N S PA R E N C Y
With the publication of its first annual report ‘ING in Society 2000’,
C O R P O R AT E VA L U E S A N D B U S I N E S S P R I N C I P L E S
B U I L D I N G O N A S T R O N G C O R P O R AT E B R A N D A N D C U LT U R E
In the next few years, the name of ING will become more visible worldwide. In many countries the name of ING is or will be tied to the local brands that often have a long-standing relationship in the communities in which they operate. In this process toward one ING
In the year 2001, sustainable development and corporate social responsibility became a much debated issue on the corporate agenda of many internationally operating companies. After 10 years of economic growth, the economic slowdown and the dramatic events of September 11 had a strong impact on the world economy and forced many companies to review their future strategies. It also brought up the question whether this will have an impact on the continuation of the process to more sustainable ways of doing business.
In co-operation with the University of Amsterdam, a research project has been started aimed at developing tools to value corporate responsibility. In 2001, ING also supported the inauguration of a Chair of Business Ethics and Reputation Management at the Vlerick Leuven Gent
wants to make a contribution to the international debate on sustainable development. Therefore,
M E A S U R I N G S U S TA I N A B L E P E R F O R M A N C E
ING wants to be accountable to its stakeholders for the way it conducts business. For several years an extensive Environmental
ING’s efforts in the field of corporate social responsibility are being acknowledged. In 2001, ING was selected as ‘the leading financial services company’ in the Dow Jones Sustainability World Indices and became part of the FTSE4Good index. ING has also been included in several sustainable investment funds as an investment option. For the coming years, ING will focus on maintaining this position by harmonising and developing global reporting and information systems, developing group-wide sustainable policies and initiating dialogues with its stakeholders.
ING WANTS TO BE ACCOUNTABLE TO I TS STAKEHOLDERS FOR THE WAY
Europe, the integration of the American business units within ING Americas and the development toward a worldwide ING brand.
During a session in August, the Supervisory Board met without the Executive Board to assess its own functioning and that of the Executive Board.
The Remuneration & Appointments Committee discussed, among other things, the management potential under the Executive Board, the employment conditions for the members of the
After a number of years during which the results developed favourably, 2001 was predominantly governed by a poor economic climate. ING did not remain unaffected. Notwithstanding the attention to the results, 2001 was also a building year of integration, synergy and acquisitions to strengthen and optimise the existing activities. All these subjects were discussed during five meetings of the Supervisory Board and three meetings of the Audit Committee. The Remuneration &
C O M P O S I T I O N O F T H E E X E C U T I V E B O A R D A N D
Supervisory Board bade farewell to Mr. Verhagen, who was vice-chairman. Ms. Goldberg and
Mr. Van der Lugt were appointed as new members. These changes were announced in the previous annual report.
Stekelenburg and Ververs will be proposed for reappointment. They have each proven their merits as members of the Supervisory Board of
RET IREMENT OF J A N B E R G H U I S A N D
We bid farewell to two Supervisory Board members who both have a very long record of service. Jan Berghuis was appointed Supervisory Board member of NMB Bank in 1987 and in 1991 he was one of the newly appointed
Supervisory Board members of ING Group, which makes him the longest serving Supervisory Board member of ING Group.
We owe him much gratitude for his strong and undiminished involvement during all those years, as from 1998 also as a member of the Audit Committee. He monitored the
Executive Board with a discerning mind, but always in the interest of ING.
Supervisory Board of NMB Bank in 1988, then in his capacity as chairman of the Dutch employers’ organisation for SME, MKB
A N N U A L A C C O U N T S A N D D I V I D E N D
In its meeting of 28 February 2002, the Supervisory Board adopted the annual accounts and is now submitting these for the approval of the shareholders. The proposed dividend for 2001 has been set at  0.97 per share. After the interim dividend of  0.47, the final dividend will amount to  0.50 per share.
Looking back on 2001, the Supervisory Board would like to express its gratitude to the Executive Board for its great efforts during a difficult economic year and to all employees worldwide who, in their daily work, give meaning to the qualities and values ING stands for.
disaster to an amount of approximately  600 million (before catastrophe cover and before tax).
After external catastrophe cover of  100 million and internal charges to catastrophe provisions, the total loss after tax in the 2001 annual results is  100 million ( 150 million before tax).
 2,348 million a year earlier. In the first full year since their acquisition, ReliaStar, Aetna Financial Services and Aetna International contributed
 74.2 billion (+49.6%). Total insurance revenues increased by 64.7% to  63.1 billion with life premiums up 78.1%, non-life premiums advancing 44.2% and investment income rising by 28.6%. In the current difficult economic climate, banking income contracted slightly by 1.7%
to  11.1 billion as the decrease in commission of 23.8% outweighed the increases in interest income of 4.9% and other income of 20.6%.
The organic growth of Group operating expenses was limited to approximately 1%, reflecting tight cost control throughout the company. Operating expenses in insurance increased by 4.6% organically. In banking, operating expenses decreased by 1.1% due to tight cost control, lower bonuses and the sale of the investment banking activities in the US. The efficiency ratio (excluding ING
in 2001. Including acquisitions, divestments and exchange rate fluctuations, total Group operating expenses increased by 21.4%.
We believe that ING has the potential to continue to meet these targets in a challenging economic environment.
S H A R E H O L D E R S ’ E Q U I T Y
R E T U R N O N E Q U I T Y
The operational net return on equity increased from 12.2% for the full year 2000 to 18.4% in 2001.
 0.97 per (depositary receipt for an) ordinary share, an increase of 3.2% compared to the 2000 dividend of  0.94 (excluding the exceptional dividend of  0.19 paid in 2000 from the profit from the sale of CCF shares). Taking into account the interim dividend of  0.47, made payable in September 2001, the proposal results in a final dividend of  0.50 per (depositary receipt for an) ordinary share. The pay-out ratio as a percentage of distributable net profit is
Lower commission income and higher loan loss provisions – especially in corporate and investment banking – outweighed the positive effects of a higher interest margin and tight cost control.
América, now wholly-owned by ING, contributed  35 million to the result.
This is the most important objective as ING’s existence depends first and foremost on its ability to serve its 50 million clients around the world to their full satisfaction. Today’s private clients are wealthier, better educated and more critical. They want to be in control of their own (financial) destiny. At the same time, they still look for advice, especially as legislation and tax regulations become more complex. They appreciate a full range of financial solutions and they expect value for money, quality, convenience, instant delivery and a personal approach. ING aims to offer them the products and services they need to meet their goals for each phase of their life. Similarly, the Group strives for total fulfilment of the financial needs of its corporate clients. ING’s wide international network is a competitive edge in serving corporations in all countries where they operate.
E M P L O Y E E B E N E F I T S A N D I N G D I R E C T
One of ING’s special talents is to build life insurance operations from scratch in developing countries. Including the newly started joint venture in India, ING currently has 16 greenfields. Their continued growth (premium growth +11.2% in 2001) is a promising sign for
The Group objectives and financial targets are discussed in this chapter.
ING’s main priority for 2002 is to adjust to the new economic reality by adapting the cost base to subdued revenue prospects. Although there is some optimism about the start of a gradual recovery of the economy in the course of this year, the financial sector will have to reckon with lower revenue and profit growth than in the second half of the 1990s.
In 2001, ING made substantial progress in transforming its multitude of different labels into one powerful ING brand and position
With its special design, the new ING headquarters – ING House –
I N S U R A N C E P R E M I U M G R O W T H E X C E E D I N G E X P E N S E G R O W T H B Y AT
The insurance efficiency ratio was met in 2001. There was a positive difference of 2.8% between premium growth and expenditure growth. Strict cost control will be undertaken to further improve this measure.
To summarise economic developments in 2001, the September 11 events exacerbated the downturn, the first signs of which were already visible in 2000. Equity markets reached their lowest point on September 21 and have since somewhat rebounded. Recovery of the economies of the US and Europe may be expected. Japan is still suffering from a recession.
The introduction of the euro has gone smoothly. Recessional tendencies in Europe appear to be levelling off and economic recovery is expected to follow the US, albeit with a certain time lag. Long-term interest rates will gradually go up in line with the economic recovery.
The US economic slowdown, the recession in Japan and the downturn in global demand for IT and electronics continue to exert pressures on growth in Asia. Growth is also hampered by the fact that the inevitable restructuring of the banking sector still has a long way to go in many countries. An Asian recovery in 2002 is highly uncertain. For the next few years, growth is likely to be less than in recent years. The economy in Japan still shows no signs of improvement. Decreased consumer spending, ongoing deflation, rising unemployment and continuously low investment spending cloud the economic outlook. In China, the economic slowdown is less severe than in other Asian countries owing to the relatively closed nature of its economy, accommodating policies (including large public infrastructure outlays), large inflows of foreign investment and continued growth in private consumption. Its membership of the World Trade
Organisation has increased the urgency of structural reform. However, widespread structural imbalances and market imperfections mean that it will take considerable time for reforms to take hold.
Many Asian governments are planning to reform their pension systems. With its extensive expertise, ING can contribute to these reforms which will stimulate the local economy.
To be a top-5 European financial institution pursuing a financial services strategy focusing on retail and wholesale financial services, including employee benefits.
On the wholesale side, ING’s strategy is to offer wholesale banking products and services as well as employee benefits to its European and international clients. ING wants to focus on offering its products and services in those markets and to those clients that are profitable on a sustainable basis. The ING Europe strategy is also built around synergy, which means working together,
sharing know-how to increase commercial effectiveness, cutting IT, operational and development costs and increasing cross-selling. A vast program is underway affecting all business units, regions and functions at all levels.
Direct, as well as seven geographic regions. The new integrated structure will bring more focus into ING’s European and global business.
Europe. In January 2002, private banking was established as a separate business line within
Including the participation in DiBa in Germany, the number of customers increased to 2.6 million and retail funds entrusted grew to  24 billion.
Central Europe and the United Kingdom) as well as the regions of Americas and Asia.
Markets). Employee Benefits in Europe comprises a substantial part of the profits of Corporate
Financial Services and is one of the strategic spearheads of ING Group, anticipating pension reform trends and international mobilisation of workforces. Seven Employee Benefits units already
M I C H E L T I L M A N T
By working together we increase our commercial effectiveness, while our upgraded Operations/IT
Investment Banking is the Group’s provider of high-value-added Mergers & Acquisitions,
The lower results in the Equity Markets business were compensated by the strong performance in the rest of Financial Markets. Measures have been taken to restructure the equities business.
O P E R AT I O N S / I T
(mortgages, securities services, international payments and financial markets) as well as in
A number of IT infrastructure projects were launched. Furthermore, a selection of standard applications was deployed for ING (CRM,
Financial Markets back-office and front-office applications, HR etc.). A great number of synergy projects were launched in the regions and business units as well. In the Netherlands, steps were taken to regroup support functions. In South-West
G E O G R A P H I C R E G I O N S
In addition to its functional lines, ING Europe is also organised along seven geographic regions.
T H E N E T H E R L A N D S
Their combined results increased by 6% in 2001, also owing to adequate cost management. The sale of Tiel Utrecht was successfully completed as part of the strategic portfolio management. In the same context it was also decided to split up
In 2001, a significant restructuring effort was started, optimising the existing franchise by improving cross-selling and transforming the existing product- and channel-oriented business units into dedicated retail, intermediary and wholesale func-
The functional line Intermediaries was added alongside Retail, Wholesale, and Operations/IT, recognising the vital importance, strong position in the market and unique dynamics of this distribution channel in the Netherlands.
Luxembourg (retail market and asset management ), Portugal (corporate), Spain (corporate; retail wealth accumulation) and Switzerland
A key objective in South-West Europe is to move to a single ING organisation. Several synergy projects are of note in this regard: the integration of the Belgian insurance companies, the merger of Caisse Privée Banque activities with BBL and the merger of BBL and ING Baring Private Bank in Switzerland.
The insurance activities in Belgium succeeded in substantially increasing market share during the year 2001, especially for unit-linked insurance products. Strict cost-control measures were also taken. The integration of the three insurance companies will lead to stronger organic growth and an increase in cost efficiency.
In Spain, an ambitious growth scenario is being developed. In Spain and France, local businesses are co-operating more closely, particularly with ING Direct.
ING Group activities in a wide range of countries, including the Poland home market. Throughout
Central Europe, the ING re-branding programme was completed. After a successful tender bid on
Benefits were introduced in Hungary, and a pension fund was started in Bulgaria. In the
Throughout Central Europe, initiatives were started to share back-offices activities between
U N I T E D K I N G D O M
Charterhouse Securities, BBL and BHF-Bank in London and BBL in Dublin into the new
A M E R I C A S (wholesale banking, l inked to EC Europe)
In the Asia region, significant progress was realised in treasury and fixed-income activities with the completion of a build up of resources in these businesses. As the market volumes softened in Asia during the year, especially in the form of lower equity and capital market activities, steps were taken to reduce costs and headcount in line with business opportunities. Also, with the integration of BBL, BHF-Bank and ING Bank in Asia, the number of locations was reduced from 36 to 18 as offices were consolidated and co-located.
STRONG GROWTH OF ING DIRECT IN CL IENTS AND FUNDS ENTRUSTED
NUMBER OF CL IENTS (X 1 ,000) FUNDS ENTRUSTED ( IN EUR MILL ION)
ING Wholesale’s goal is to intensify cross-selling in the Netherlands, Belgium and Poland, to strengthen its market position in the major European countries of the UK, Germany, France, Spain and Italy and to enlarge European client business.
Rationalisation is the first of the five key strategies. The company is rationalising its business portfolio to achieve economies of scale and build a wealth management and/or risk management focus in its core markets. Restructuring and integrating businesses – the second strategy – will drive down unit expenses and eliminate redundancies. In the US, ING restructured its core businesses into US Financial Services to better focus on product manufacturing and distribution channels. In doing so, ING is on its way to realising its third strategy, which is creating a winning customer value proposition, while at the same time reflecting its customer-centric focus in its brand values. Aligning ING’s culture with the customer proposition and business strategy – the fourth strategy – enables the company to attract, retain and motivate a highly professional and diverse workforce which reflects the customer base. As well, initiatives have been launched to leverage ING’s global capabilities and extend expertise in branding, direct marketing, asset management, risk management, IT and procurement across country platforms, which is the fifth of ING Americas’ key strategies.
M A R K E T P O S I T I O N
Build leading market positions through integrated financial services platforms in the core countries.
Star, Aetna Financial Services and Aetna International. Amidst a global economic slump, which was magnified by the tragic events of September 11, it was impossible for ING Americas and most other companies focused on the wealth management market to meet the financial plan for 2001.
Financial Services with ING’s US organisation, and Aetna International with ING Latin America, started in 2001 with significant progress. In the
US was taken by combining retail and wholesale businesses into ING US Financial Services, focusing on separating product manufacturing and distribution to get closer to the customer. The acquisitions also have re-characterised the US
business from a traditional life and annuity insurance company to a multi-product wealthmanagement company. In December 2001, ING
‘ING’ branded paycheque and benefits. Brand campaigns, including the successful ‘It’s not an ending, it’s a beginning’ US programme, are steps toward an evolutionary brand strategy to position
ING as an innovative and refreshingly different financial services provider. A successful advertising campaign was launched in Canada around the
S A L E S M O M E N T U M M A I N TA I N E D
Among the key positives in 2001 were the partnership and teamwork fostered through integration.
There was a solid union of people and cultures across a multitude of businesses and sites. This was so successful that it allowed the region to step up the ‘One ING’ goal and accelerate the next phase of US integration. The businesses maintained their market shares during this complex integration process, amongst others because of the strength of the ING Advisors Network, the largest network in the US market place with over 10,000 representatives.
W O R L D T R A D E C E N T E R C L A I M S L O S S
The September 11 attacks resulted in approximately USD 535 million claims loss, primarily through ING Re, the reinsurance operation, which had an unusual concentration of reinsurance risk in the upper floors of the World Trade Center towers. ING Re had USD 100 million catastrophe reinsurance cover and had never previously been confronted with catastrophe claims over USD 7 million for one single event. Subsequently, it was decided to exit the personal accident and workers’
The alliance with Zurich Canada and acquisition of some of its activities was a major strategic realignment, which moves ING Canada to the number one position in non-life lines. ING
acquired Zurich’s personal and car and home insurance operations in Canada as well as its portfolio of small and mid-market commercial risks. In turn, Zurich acquired ING Canada’s large commercial and corporate lines. Both companies will offer their complete product lines to each other’s distributors and customers in Canada.
S T R O N G P R E S E N C E I N L AT I N A M E R I C A
As part of its rationalisation strategy, ING sold its Argentine subsidiary Aetna Vida SA as well as
The ING US web site was re-launched last year to give a sharper customer focus. The site will
A successful brand advertising campaign was launched bringing the new US companies under the ING name.
easily migrate to the new www.ing-usa.com, which will add more interactive functionality for customers in 2002. ING has seen an increasing need to create technologies with which ING businesses can organise and access customer information.
These technologies enable customers and distributors to access their personal account information and perform functions. A web strategy providing customer-distributor links lies at the heart of becoming a customer-focused organisation. As
ING-associated financial advisors. The web page, then, becomes a workhorse for customers who want more personalisation – as well as for ING
advisors – by immediately engaging users on a variety of levels.
in 2001, ING began the year 2002 with assets under management considerably below expectation. The announced reduction of annual operating expenses by over USD 250 million will help reduce expenses in line with lower revenue expectations. In addition, as significant progress in integration has been made in 2001 and the remaining integration projects will be completed by the end of 2002, ING US Financial Services will achieve its IFS platform operationally and managerially by the close of the year. Assuming a modest recovery in the region’s economic growth and stock markets, ING businesses are wellpositioned to contribute their fair share to the
International businesses, the strategy will be to focus on key strategic markets where scale, distribution, management and technology are the drivers of sustainable profit growth. Building the brand awareness and positioning the ING brand in the region help establish the Integrated Financial Services business platform. Rounding out
ING’s product range with innovative products such as mutual funds, defined contribution plans, variable life and unit-linked products in selected markets, positions ING closer to its customers with more product choices. Distribution ability needs to be enhanced by diversifying distribution and implementing a CRM business model. In other words, ING Asia/Pacific is aiming to build on its strength as a traditional life insurer distributing through agents sales forces to gradually become a multi-channel financial services provider focused on delivering superior products and services to customers in the middle and upper retail market.
The year 2001 has been a year of integration for ING Asia/
insurance agents in Hong Kong, was highly successful in reinforcing ING’s brand.
Principal Financial Group, was among the first to become operational and enter the promising defined contributions market in November following the long awaited new legislation on Japanese pensions.
To consolidate its strong position in key markets and to ensure it continues to prosper in an increasingly competitive environment, ING in Australia started the process of regrouping its operations into customer and adviser segments, where historically its focus has been on product or distribution. With a new function-based organisation,
S T R O N G M A R K E T P O S I T I O N S
As the second largest international life insurer in the Asia/Pacific region, ING has now become a dominant player. In Australia, ING ranks among the top five insurance and asset management institutions with a market share of 6% for retail funds under management. Measured by new premium income, ING is now the fourth largest life insurer in Taiwan, having strengthened its position from the previous year, and is easily the largest foreign life insurer there. In Hong Kong,
ING ranks 19th in Japan up from 24th last year, and is among the top three for corporate-owned life insurance (COLI) new business with a market share of 3%. In China, ING’s joint venture PALIC
in Shanghai now ranks as the second largest foreign joint venture and fifth overall with a 4%
Aetna’s experience in establishing new emerging market operations is benefiting this company – it already has 100,000 customers and revenue growth over 100% on a pro-forma basis. As the third largest insurance company in terms of premium income and with 10% market share in terms of new business, ING strengthened its position in
R E B R A N D I N G T O I N G
In Australia, the ING brand was smoothly adopted using a transition logo to explain the name change from Mercantile Mutual to ING. The nine-months transition campaign indicated strong consumer awareness and ensures success when removing the Mercantile Mutual link in January 2002. In Taiwan, Life of Georgia and Aetna were smoothly integrated under the new brand name
ING Antai. In Hong Kong and Macau, the change from Aetna to ING Life coincided with the integration and realignment of its operations to establish a single strong financial services plat-
J O I N T V E N T U R E W I T H A N Z B A N K
B E C O M I N G A R E C O G N I S E D E - L E A D E R
Pacific expects substantial growth in revenues and earnings in 2002 through further integrating the business activities, optimising synergy, expanding distribution opportunities, building one powerful brand and focusing on meeting customer needs.
The year 2001 was very difficult for the asset management industry. The business is sensitive to the level of market prices as revenues are linked to funds under management. In addition, a drop in asset prices often coincides with net outflows. Under these difficult circumstances, ING Asset Management generated a pre-tax profit of  264 million – 18.5% below last year’s
Become a global top-10 (currently no.12 in assets under management) and remain a European top-5 (currently no. 4) asset manager with an above-average investment performance.
Asset Management intends to reach its objective to be a top-five asset manager in Europe as well as a top-ten asset manager globally.
Asset Management to form ING Aeltus. The wholesale real estate business of Westland/Utrecht
Hypotheekbank and ING Bank Nederland will be transferred to ING Real Estate.
Asset Management, there is a strong emphasis on product design and manufacturing. Distribution and marketing efforts focus on institutional and wholesale clients, either representing institutional investors or retail distribution channels.
Management is consistently strengthening its risk management infrastructure across its business units. This effort has, for example, resulted in an
A C T I V E M O N E Y M A N A G E M E N T F O R
Management and ING Aeltus offer active money management services to institutional investors.
Institutional client assets under management amounted to  166 billion, which makes ING
one of the larger third-party money managers in the world with strong market positions in Europe, the US and Asia/Pacific. At Baring Asset Management a deterioration of investment performance in some products led to a higher than expected loss of mandates. The investment process has been reviewed and improved. It is expected that a further loss of mandates is stemmed now that the performance is improving.
ING Investment Management performed very satisfactorily and won a number of prestigious new mandates. ING Investment Management manages
In the US, the integration of the general-account investment platforms of Aetna, Reliastar and ING
has been completed, resulting in an expansion of investment capabilities and cost savings.
M O R E C O M P E T I T I O N I N M U T U A L F U N D S
In 2001, retail investors reduced their investments in equity funds in reaction to negative returns. In the mutual fund business, average holding periods are falling due to the emergence of theme funds, but also because investors are becoming more sensitive to performance. Furthermore, the emergence of open architecture, whereby distribution channels are selling products from various providers, has led to a more competitive environment. Alternative investments (funds of hedge funds, private equity) as well as principal protected products are gaining ground.
Retail Fund was jump-started thanks to the wealth of in-house expertise in the development of shopping centres.
product was launched, which marked the first step of this product line outside the US market.
I N G A S S E T M A N A G E M E N T
F U N D A D M I N I S T R AT I O N A N D T R U S T S E R V I C E S
Financial Services Group has built an excellent reputation as an offshore administrator of private equity funds and hedge funds, which business has been growing rapidly in the last two years.
Intra Beheer in April 2001, ING Trust has become a leading player in the Dutch market for offshore trust services.
We are committed to delivering excellence in global investment performance and local client delivery service.
In terms of leadership, ING has made great progress in forming its Management Council targeted at a size of 200 senior leaders. Over the past year these managers have been further linked through a common performance management process which recognises and rewards them on measurable results and their commitment to
Europe was held in June 2001 in Atlanta, recognising ING’s expansion in the Americas and further emphasising its cultural diversity. ING
takes effective talent management seriously and consistently evaluates the longer-term career plans of young people rated as top talent throughout the organisation. Simultaneously, each business unit tracks and plans talent management within its own organisation.
Business School will continue to develop courses, which are ‘time sensitive’ to our current and near-term business priorities such as branding, leveraging synergies, leading effectively through change etc.
as one of Europe’s “10 great companies to work for”. We plan to further develop our employer brand. Each separate business of ING has a distinguished reputation as an employer. Our goal is to maintain that reputation locally, and strenghten it by referring to ING’s global employment opportunities.
ING Business School proves to be a successful learning centre as part of management development.
Management Council of 200 top managers developed as backbone of ING leadership.
These acquaintances are valuable as they are frequently relied upon to solve business challenges long after the courses have been concluded.
D I V E R S I T Y I N B R O A D S E N S E
ING is characterised by a high degree of diversity. The challenge is to utilise this resource as much as possible. During 2001 the Diversity
Council, which advises the Executive Board on these matters, was broadened beyond women.
During 2001 ING announced that diversity would be a component of the medium-term plans of its business units. It is considered a business issue as well as a social issue. Businesses were asked to set measurable objectives as is being done for all other key initiatives. We will discuss progress toward these objectives regularly and ensure our leaders see this topic as part of their overall leadership objectives. Diversity is part of ING’s strength.
N E T H E R L A N D S
Collective Labour Agreement for all its employees in the Netherlands in 2000. This makes it easier for employees to transfer to another business unit to further develop their career.
September 11 altered the very concept of what constitutes a catastrophe, and this has potential implications for the risk profile of all the life, annuity, health and non-life portfolios. ING initiated a study of the Group’s concentration risk exposure in those portfolios and its reinsurance policy, particularly with respect to catastrophe reinsurance.
Additions to provisions in 2001 showed a significant increase after a period of annual declines since 1998. The deterioration of economic conditions necessitated a strong increase in the addition to the provision for loan losses of the banking operations.
ING’s Insurance’s policy is to maintain a fixed-income investment portfolio with an average credit quality comparable to a Standard &
Poor’s rating of AA-/A+ (A3/A1 of Moody’s). The provision for loan losses amounted to  165 million at year-end 2001 (2000:  248 million).
The Executive Board places a high priority on risk management. By nature of the Group’s size and its wide diversity of activities, types of clients and geographic regions, ING
recognises that it has a special responsibility in maintaining the highest quality of risk management and applying the most up-to-date and reliable methods available.
B A N K M A R K E T R I S K
The insurance market risks are monitored through asset and liability management policies and procedures. To this end, a structure is established on business unit, regional and corporate level. The risk of loss occurring through adverse changes of prices in the financial markets is monitored through a set of preferred risk measures. Earningsat -Risk positions measure short-term volatility, whereas Embedded-
LARGEST (>EUR 750 MILL ION) CROSS-BORDER LENDING EXPOSURES IN EMERGING MARKETS
L I Q U I D I T Y R I S K
Actuarial risks arise with respect to the adequacy of insurance premium rate levels, provisions with respect to insurance liabilities and solvency capital, taking into consideration the supporting assets (fair and book value, currency and interest sensitivity), changes in interest rates and exchange rates and developments in mortality, morbidity, lapses and expenses as well as general market conditions. Specific attention is given to the adequacy of provisioning, considering the low interest rates in a number of countries in which ING operates. ING
ING Group level. Insurance Risk Management provides guidelines for product design, reserving, underwriting, pricing criteria and reinsurance strategy. Consistent with other business in ING Group, the current embedded-value methodology is extended to a riskadjusted capital allocation and performance measurement tool.
O P E R AT I O N A L R I S K
The following table shows the solvency ratios for the banking operations and ING’s targets: For the insurance activities, the required solvency margin is based on
European Union directives. At the end of 2001, ING’s solvency margin exceeded the required solvency margin, as shown by the following table: M O R E I N F O R M AT I O N
Annual Accounts. This information is also available on the Internet site of ING Group (www.ing.com).
T H E E X E C U T I V E B O A R D ,
This chapter includes a summary of the annual figures. The summary starts with the consolidated balance sheet and profit and loss account as well as the consolidated statement of comprehensive net profit and the condensed consolidated statement of cash flows. The main items of the balance sheet and profit and loss account are specified in explanatory notes, which also include the geographical analysis of income and result before taxation.
The complete Annual Accounts and related 0ther information are published as a separate document in conformity with the statutory requirements as stipulated in Part 9, Book 2 of the Dutch Civil Code. In addition, the most relevant information as required under the reporting requirements in the 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.
The Annual Accounts (Dutch and English) and Annual Report on Form 20-F (English) are available on the ING website: www.ing.com.
A U D I T O R ’ S R E P O R T
We have audited the summary annual figures of ING Groep N.V., Amsterdam, for the year 2001 as incorporated in this annual report on pages 50 to 60. This summary annual figures was derived from the annual accounts of ING Groep N.V. for 2001. In our report dated 28 February 2002 we expressed an unqualified opinion on these annual accounts.
In our opinion, this summary annual figures is consistent, in all material respects, with the annual accounts from which it was derived.
For a better understanding of the company’s financial position and the result of its operations for the period and of the scope of our audit, the summary annual figures should be read in conjunction with the annual accounts from which the summary annual figures was derived and our audit report thereon.
E Q U I T Y A N D L I A B I L I T I E S
Preference shares of group companies 2 , 5 4 2 2 , 4 1 9
Salaries, pension and social security costs 7 , 7 9 6 6 , 7 2 9
Additions to the provision for loan losses 7 5 0 4 0 0
This consolidated profit and loss account is specif ied by insurance and banking operations and by Operational and Non-operational result on page 57.
Realised revaluations previously recognised in shareholders’ equity are released from shareholders’ equity to the profit and loss account.
Other components of comprehensive net profit: Net profit not recognised in the consolidated profit and loss account - 2 , 5 3 3 2 9 6
Net cash flow from operating activities 2 3 , 4 2 4 - 2 , 2 7 8
Net investment for risk of policyholders 2 , 6 6 3 - 4 , 8 4 4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER
In 2001, ING Group increased its shareholding in Seguros Comercial América, an insurance company based in Mexico, by 45% to almost 100%. SCA was de-listed from the Mexican stock exchange effective 9 November 2001. The total purchase price of the additional acquisition amounted to  1,134 million, including  584 million assumed debt. The acquisition was partly financed by the sale of shares.
América have been fully consolidated in the financial statements of ING Group. All retail operations of ING in Mexico now operate under the name ING Comercial América.
Bank Slaski has been merged with ING Bank Warsaw as from 1 September 2001. The combined bank, in which ING holds 88%, operates under the brand name ING Bank Slaski. Goodwill amounted to  118 million and is charged to Shareholders’ equity.
Goodwill related to ReliaStar has been adjusted in 2001 by  180 million (after tax) as a result of recording a catastrophe provision in the opening balance sheet.
Land and buildings, including commuted ground rents 1 0 , 5 4 1 1 0 , 8 9 0
Loans guaranteed by public authorities 8 , 9 4 9 1 3 , 3 9 8 2 2 , 3 4 7 8 , 3 0 6 1 3 , 0 1 9 2 1 , 3 2 5
Loans guaranteed by credit institutions 9 4 0 6 , 2 8 6 7 , 2 2 6 1 , 6 5 2 5 , 8 7 8 7 , 5 3 0
Changes in ING Groep N.V. shares held by group companies - 5 2 6 - 1 , 1 5 3
Shareholders’ equity was employed in the various activities as follows: Group equity employed in the insurance operations 1 5 , 4 0 1 1 7 , 8 8 4
Provision for life policy liabilities 1 2 9 , 4 2 0 1 1 7 , 2 2 6 8 , 5 1 1 6 , 7 6 0 1 2 0 , 9 0 9 1 1 0 , 4 6 6
The non-operational results can be specified as follows: Provision for reorganisation and relocation - 4 8 6 - 4 8 6
Premium income from life insurance policies 4 4 , 5 5 7 2 5 , 0 1 9
Premium income from non-life insurance policies 5 , 9 0 3 4 , 0 9 5
Premium income life can be specified as follows: POLICIES WHERE POLICIES WHERE
P E R I O D I C P R E M I U M S
S I N G L E P R E M I U M S
O P E R AT I O N A L R E S U LT B E F O R E TA X AT I O N
I N T E R E S T R E S U LT F R O M T H E B A N K I N G O P E R AT I O N S
In addition to risk and performance measurement, RAROC facilitates the efficient use of the Group’s capital base. With RAROC and economic capital analyses as an integral part of the Group’s planning and control cycle, ING aims to increase focus on risk-adjusted performance and efficient use of capital, in order to enhance shareholder value creation. The Executive Board has set a minimum target rate for all new business activities of 18.5% (pre-tax).
For insurance activities RAROC is in the process of being introduced for certain activities; embedded value however, is used as the overall indicator of economic value creation.
R A R O C F O R B A N K I N G O P E R AT I O N S
which is consistent with our target debt rating (AA/Aa2 long term) and a one-year time horizon.
M A R K E T R I S K The risk of losses due to unfavourable market movements.
B U S I N E S S R I S K The risk of losses due to unfavourable changes in business volumes, margins and costs.
While the first three risk categories are mainly calculated starting at transaction level and then aggregated up to total portfolio level, business and operational risk capitals are mainly based on top-down calculations and the numbers presented should thus be regarded as such.
Note that the solvency capital that is prescribed by the banking regulators in principle only takes into account credit risk and market risk for trading portfolios.
Several comments can be made, as follows: - The value of new life business written in 2001,  346 million, represents a substantial increase over 2000. The 2000 results do not include any new business values for the ex-Aetna and ex-ReliaStar businesses.
- During 2001 ING invested  2 billion to write new life insurance business. The overall rate of return expected on this investment is 11.2%.
- During 2001 ING experienced substantial expenses ( 286 million) in excess of the amount of expenses assumed in pricing this new business. A substantial portion of these excess expenses was in the U.S., where there is a major reorganisation underway designed to eliminate such expenses by the end of 2003/2004. If these excess expenses were eliminated, the expected rate of return on new business would increase to 13.8%.
The regional split of the new business production used in the determination of the reported value of new business is as follows: in millions of euros
Value of business in force 2 2 . 6 1 1 9 . 6 9
The value of in-force business for the life greenfields and ex-greenfields(2) is  3.66 billion at the end of 2001 against a value of  2.69 billion at the end of 2000. The embedded-value amounts include the values for Aetna and ReliaStar as appropriate for both year-end 2000 and 2001.
Phil ippines, Poland, Romania, Slovakia, Spain and Taiwan. The embedded value for 2000 was restated to include Aetna China and Taiwan operations.
Breakdown efficiency ratios of (operational) banking activities by Executive Centre for the years 2000 and 2001 (in %) is as follows: ING Europe (excluding ING Direct) 7 1 . 6 7 2 . 2
Total banking operations (excluding ING Direct) 7 1 . 7 7 2 . 1
R E G U L AT O RY R E Q U I R E M E N T S A N D R AT I O S W I T H R E G A R D T O S O LV E N C Y
For the banking operations, the required capital in accordance with the BIS requirements amounts to 8% of all risk-weighted assets (known as the ‘BIS standard’). The tables show the risk-weighted assets, the composition of the qualifying capital and solvency ratios.
S O LV E N C Y R AT I O S
In recent years, Corporate Governance has moved to the centre of attention all over the world. ING Group attaches great importance to good management, adequate supervision and reporting, and balancing the interests of its various stakeholders: clients, shareholders, employees and society. This section explains how corporate governance is addressed within ING Group.
(natural and legal persons) can exchange the depositary receipts they hold for ordinary shares or preference shares up to a maximum of 1% of the issued share capital. Furthermore, it was decided that
meeting and to be actually present at this meeting. This means that all present shareholders and depositary-receipt holders can exercise their voting rights during the Annual General Meeting of
Shareholders, albeit that the voting right is limited to 1% of the issued share capital. This way, ING aims to intensify the commitment of providers of capital to the company.
At the end of 2001, a legislative proposal was submitted to the
Dutch parliament to adapt the rules applicable to statutory two-tier entities. The purpose of this legislative proposal is to enhance the position of shareholders and holders of depositary receipts.
Furthermore, this legislative proposal includes that members of supervisory boards of a statutory two-tier company will be appointed by the annual general meeting of shareholders on the binding nomination of the supervisory board. The annual general meeting of shareholders will then also have the power to dismiss the entire supervisory board. The works council would get the power to nominate up to a third of the supervisory-board members. Furthermore, certain decisions that have far-reaching consequences for the identity or character of the company, would be subject to approval of the general meeting. Finally, the legislative proposal stipulates that in
‘peacetime’, voting rights have to be granted without any restriction to holders of depositary receipts.
Supervisory Board to update its profile in the beginning of 2002.
I S S U E O F S H A R E S I N T H E F O R M O F D E P O S I TA RY R E C E I P T S
Meeting of Shareholders, ING Group’s ordinary and preference shares are available in the form of non-voting bearer depositary receipts. The voting rights attached to the ordinary and preference shares are exercised by Stichting Administratiekantoor ING Groep, an independent trust office. The Stichting votes in accordance with the interests of the company, the enterprises carried on by the company and all concerned with them. The Stichting’s report for 2001 is included on page 73.
The non-voting depositary receipts of ordinary and preference shares can be exchanged for the underlying registered shares with full voting rights. However, there is a maximum for the number of shares a shareholder may own. The maximum for ordinary shares is 1% of the share capital that is issued in the form of ordinary shares and the maximum for preference shares is 1% of the share capital that is issued in the form of preference shares.
Shareholders, Stichting Administratiekantoor ING Groep will under normal circumstances automatically grant a proxy to holders of bearer depositary receipts attending the Annual General Meeting of
Shareholders. Accordingly, the holder of a bearer depositary receipt may vote as if his bearer depositary receipts were shares of the relevant kind. However, the number of shares for which a holder of bearer depositary receipts may obtain a proxy is identical to the number of bearer depositary receipts that he may exchange for shares, i.e. subject to a maximum of 1% of the relevant part of the issued share capital.
C U M U L AT I V E P R E F E R E N C E S H A R E S
The authorised capital of ING Group is made up of cumulative
Aandelen a call option on cumulative preference shares. Reference is also made to the information on page 73.
Articles of Association, providers of capital (shareholders and holders of depositary receipts for shares) who alone or together represent at least 1% of the issued share capital are entitled to have items included on the agenda, provided the request is submitted at least 50 days prior to the meeting.
E X E C U T I V E B O A R D
The Executive Board has drawn up a set of rules governing the manner in which it functions, and these rules have been approved by the Supervisory Board.
COMPENSATION, GRANTED OPT ION R IGHTS AND HOLDING OF SECURIT IES
The compensation of the Executive Board members and granted option rights are disclosed in the annual accounts and summarised on pages 70 and 71 of this report. Executive Board members are permitted to hold shares of the company as long-term investments.
S U P E R V I S O RY B O A R D
As a large company within the meaning of the Netherlands Civil
Supervisory Board in relation to those of other offices is a matter for the individual Supervisory Board members.
R E M U N E R AT I O N A N D H O L D I N G O F S E C U R I T I E S
P R I N C I P A L F O R M E R P O S I T I O N : Chairman Committee of Managing
C U R R E N T T E R M O F O F F I C E : until the 2002 Annual General Meeting of Shareholders (AGM) in which he will be proposed for reappointment.
M I J N D E R T V E R V E R S Vice-Chairman (1933 - Dutch nationality)
Nederlanden in 1991. F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G
G R O U P : May 1994; Vice-Chairman as of May 1996; temporary chairmanship for three years as of November 1996. Resumed vicechairmanship in May 1999. Chairman of the Audit Committee as of
L U T G A R T VA N D E N B E R G H E (1951 - Belgian nationality)
P R I N C I P A L P R E S E N T P O S I T I O N S : Executive Director of the Vlerick
N.V. Appointed to the Supervisory Board of NMB Bank in 1987.
F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G G R O U P : January 1991.
L U E L L A G R O S S G O L D B E R G (1937 - American nationality)
Financial Corp. F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G
G R O U P : April 2001. C U R R E N T T E R M O F O F F I C E : until the 2005 AGM.
PA U L VA N D E R H E I J D E N (1949 - Dutch nationality)
F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G G R O U P : May 1995, also on the recommendation of the Central Works Council. Member of the Remuneration & Appointments Committee. C U R R E N T T E R M
P R I N C I P A L F O R M E R P O S I T I O N S : Chairman Executive Board
S U P E R V I S O R Y B O A R D I N G G R O U P : June 1998, following his retirement from the chairmanship of the Executive Board of ING Group.
Member of the Audit Committee. C U R R E N T T E R M O F O F F I C E : until the 2003 AGM.
P R I N C I P A L P R E S E N T P O S I T I O N : The Queen’s Commissioner in the
I N G G R O U P : May 1994. C U R R E N T A N D L A S T T E R M O F O F F I C E : until the 2002 AGM.
G O D F R I E D VA N D E R L U G T (1940 - Dutch nationality)
Bank and ING Group. F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D
O F O F F I C E : until the 2005 AGM.
P R I N C I P A L P R E S E N T P O S I T I O N : Chairman Besix N.V. F I R S T
A P P O I N T M E N T S U P E R V I S O R Y B O A R D I N G G R O U P : May 1998. C U R R E N T
P R I N C I P A L P R E S E N T P O S I T I O N : Mayor of the city of Tilburg. F I R S T
T E R M O F O F F I C E : until the 2002 AGM in which he will be proposed for reappointment.
P R I N C I P A L F O R M E R P O S I T I O N S : President and Chairman Executive
Board Philips Electronics. F I R S T A P P O I N T M E N T S U P E R V I S O R Y B O A R D
I N G G R O U P : October 1996. Member of the Remuneration &
At the Annual General Meeting of Shareholders of 17 April 2002, the Supervisory Board will propose to appoint Karel Vuursteen
(Dutch nationality) as a member of the Supervisory Board. The proposed appointment of Karel Vuursteen is based on his experience as chairman Executive Board of a multinational, his knowledge of the international business world and his branding expertise.
Chairman as of April 1999. Chairman as of May 2000. Joined ING
(Nationale-Nederlanden) in 1969. M A I N R E S P O N S I B I L I T I E S : Strategy,
M I C H E L T I L M A N T Vice-Chairman (1952 - Belgian nationality)
F R E D H U B B E L L (1951 - American nationality)
R E S P O N S I B I L I T I E S : ING Americas and ING Asia/Pacific.
A P P O I N T M E N T E X E C U T I V E B O A R D I N G G R O U P : January 1995. Joined
ING (NMB Bank) in 1983. M A I N R E S P O N S I B I L I T I E S : ING Europe/
A P P O I N T M E N T E X E C U T I V E B O A R D I N G G R O U P : July 1992. Chief
P O S I T I O N : Treasurer-General Ministry of Finance. M A I N
A P P O I N T M E N T E X E C U T I V E B O A R D I N G G R O U P : September 1996.
Federation. M A I N R E S P O N S I B I L I T I E S : ING Asset Management,
ING’s remuneration policy for the members of the Executive Board is consistent with that for other senior executives within the group. Its objectives are to attract and retain high quality people and motivate them towards excellent performance, in accordance with ING’s strategic and financial goals. The remuneration of the Executive Board is determined by the Supervisory Board on the basis of a proposal of its Remuneration and Appointments Committee. The remuneration package consists of a base salary, a short-term performance-related bonus and a long-term incentive in the form of stock options. In order to maintain a competitive remuneration package, benchmarking against comparable companies is carried out regularly.
S H O R T- T E R M P E R F O R M A N C E - R E L AT E D B O N U S
Board are determined by the Supervisory Board on the basis of a proposal of its Remuneration and Appointments Committee. These criteria are related to the financial results of ING Group.
Board. The number of stock options to be granted is related to the financial results of ING Group.
The pensions of the Dutch members of the Executive Board are based on defined benefit plans, which are insured through a contract with Nationale-Nederlanden N.V. Employment of members of the
Long-term incentives (number of options) 2 1 0 , 0 0 0 ( 2 ) 3 0 0 , 0 0 0 ( 3 )
(2) Number of options related to financial result 2001 of ING Group. The exercise price of these options wil l be fixed at the Euronext Amsterdam Stock Exchange opening price of the ING Group share on 11 March 2002.
BASE SALARY BASE SALARY BONUS (1) BONUS (2) OPTIONS (3) OPTIONS OPTIONS (4)
Exchange opening price of the ING Group share on 11 March 2002.
(5) Fred Hubbell joined the Executive Board on 2 May 2000.
Netherlands and to a considerable number of employees outside the Netherlands. The purpose of the option scheme, apart from promoting a lasting growth of ING Group, is to attract, retain and motivate senior executives and staff.
The option rights are valid for a period of five or ten years.
I N G G R O U P S H A R E S H E L D B Y M E M B E R S O F T H E E X E C U T I V E B O A R D
As at 31 December 2001, Fred Hubbell held 840,000 ING Group shares (2000: 856,000) of which 405,000 (2000: 406,000) are held for his income only benefit in a trust. Other members of the Executive
 38,600. Members of a Supervisory Board Committee, not being chairman or vice-chairman of the Supervisory Board, received a remuneration of  1,800 for that membership.
ING Group has granted option rights on ING Group shares to a number of senior executives (members of the Executive Board and
FINANCIAL YEAR OF OPTIONS AS AT 1 JANUARY 2001 AS AT 31 DECEMBER 2001 AS AT 31 DECEMBER 2001
The movements in the option rights were as follow: OPTIONS OUTSTANDING WEIGHTED AVERAGE 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 2001 was  8.71 (2000:  8.67; 1999:  7.34).
R E P O R T T O H O L D E R S O F D E P O S I TA RY R E C E I P T S
During the 2001 financial year, the Stichting carried out duties in relation to the administration of ordinary and preference shares against which bearer depositary receipts have been issued. On 12
April 2001, the Board met to discuss the 2000 annual report and the agenda for the Annual General Meeting of Shareholders on 17 April 2001. During this meeting, the Board furthermore decided to alter the Articles of Association and the Conditions for the Administration of Registered Shares of ING Groep N.V. The main changes are that legal persons can hold shares up to a maximum of 1% of the issued share capital and that the Board of Stichting Administratiekantoor ING Groep can grant a proxy to them, and natural persons, to vote during a Shareholders’ meeting, in compliance with the statutory stipulations. If the Board decides to grant a proxy, each depositary-receipt holder who registered to attend a General Meeting of Shareholders and is actually present at this meeting, will be granted a proxy to vote.
 0.24 nominal value had been issued and A preference shares totalling  104,493,696.- nominal value against which 87,078,080 depositary receipts in denominations of  1.20 nominal value had been issued, had been taken into administration. Jaap Hulshof and
Hans de Korver stepped down from the Board because they reached the statutory age limit. They were succeeded by Ton Risseeuw and Jan
Stichting and ING Groep N.V. This agreement gives the Stichting 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. Whenever the Stichting acquires cumulative preference shares it may acquire any number of cumulative preference shares which is consistent with the condition that, whenever cumulative preference shares are issued, immediately thereafter no more than one third of the total issued share capital of the company consists of cumulative preference shares. If and whenever new shares – other than cumulative preference shares – are issued subsequently, the Stichting may again exercise its right, subject to the provisions of the preceding sentence. On acquisition of cumulative preference shares, 25% of the nominal value is to be paid up.
(Chairman), Henk Goris, Bas Kortmann, Allard Metzelaar, Wim van Vonno, Lutgart van den Berghe, Paul van der Heijden and
Aandelen ING Groep contained in Annex X of the Rules Relating to Securities of Euronext Amsterdam N.V., Amsterdam, have been complied with.
R INUS KOSTER , BEN MANTEL , DOR INE ME I JER , HARRY ME I JER , HENNY
POST, WOUTER VAN PUFFELEN , ME INDERT ROOSJEN , ROB RU IVENKAMP,
I N G G R O U P E U R O P E A N W O R K S C O U N C I L as at 1 January 2002
RE IN IER VAN DER HE I JDEN , MART IN HERMANNS , BAS HOFSTEE , HANS
I N G G R O U P A D V I S O RY C O U N C I L as at 1 January 2002
HANS DE BOER , Chairman MKB-Nederland (Netherlands Federation of Small and Medium-sized Enterprises)
RUDY VAN DER MEER , member Executive Board AKZO Nobel, the
ECKART WINTZEN , Managing Director Ex’tent, Management & Investment Company, the Netherlands 2) Chairman as of 17 Apri l 2002
P H O T O G R A P H Y
L I T H O G R A P H Y A N D P R I N T I N G