Bribery of any form is unacceptable. No undeclared offers or payments will be accepted or solicited by ING employees, or made by ING employees to third parties, and employees are required to avoid any contacts that might lead to, or suggest, a conflict of interest between their personal activities and the business of the Group or create an appearance of conflict of interest.
shares. Depositary receipts for shares equivalent to the (depositary receipts for) shares in respect of which cash dividend is chosen, will be sold on the stock exchange. This way of funding the cash part of the dividend is temporary and will be ended as soon as the debt/equity ratio of ING
I N G A S I A / PA C I F I C • Life insurance • Pensions • Investment management
In 2003, ING Direct became full owner of DiBa and acquired Entrium. At year-end, ING Direct had over 3.7 million clients and EUR 38.1 billion in funds entrusted in Germany.
Poland contributed to the successful growth of ING’s Pension Funds, which attracted 2 million clients in only a few years. The pension fund and the life insurance company have joined forces to build one ING Nationale-Nederlanden brand. The image is from their ‘Best Friend’ TV commercial.
Netherlands and in 1993 he joined the Executive Board of ING Group, of which he became vice-chairman in 1999 and chairman in 2000. During his four years as chairman he led ING
One of the main issues during the meetings of the Remuneration and Nomination Committee was the renewal of the remuneration structure for top management of ING. More information about the decisions regarding the new remuneration policy for ING’s senior management can be found as of page 79 of this annual report. A
ING Direct and the insurance operations in developing markets as well as higher pension costs.
Total operating expenses of insurance decreased by 5.9% to EUR 4.9 billion. Organically, total operating expenses grew by 6.5% despite strict cost control. This increase was mainly caused by higher pension costs, additional expenses related to the improvement of the service level of the Dutch operations, implementation costs of shared service centres and reorganisation costs in the US and Poland.
The tier-1 ratio of ING Bank N.V. was 7.59% at the end of December 2003, an improvement of 28 basis points compared with year-end 2002
Strategic objectives Strengthen the capital base for a solid financial foundation
Furthermore, ING successfully issued two subordinated perpetual loans in Europe and the
EUR 28,654 million. Operating expenses went down by EUR 30 million. The total headcount of ING Europe was 76,000 at the end of 2003, against 77,900 in December 2002, a reduction of 2.4%. Retail profits before tax (including Private
The Netherlands In the Netherlands, the different ING companies continued their integration to one organisation
Nationale-Nederlanden (NN), which is the overall number-one life insurer in the Netherlands, made further steps to improve the quality of its service in terms of reduction of backlogs and easier accessibility. These efforts were not yet reflected in surveys on client satisfaction, so NN
The developing Central-European countries were affected by the strong economic head wind in 2003. In this market environment ING
Benefits, amounting to 20% of ING Wholesale’s pre-tax results further improved its position in
An advertisement highlighting ING Comercial América’s triple-A rating in Mexico. ING Comercial América is the largest insurance company in Mexico, offering life, health and P&C insurance. ING also offers whole sale-banking and asset-management services.
– on street lamp banners, T-shirts, billboards and, on race day, a continuous streaming of signs along the final leg of the race leading into New
Japan, Korea, Malaysia, Hong Kong, Taiwan and the activities in the developing markets of China, India and Thailand. Differences in the level of market development and business environment in these countries are taken into account when setting the strategic priorities.
I N G A S I A/P A C I F I C
Australia is its network of approximately 8,000 independent advisors. QBE-MM ranks number six in Australia with a market share of around 5.5%
ING’s long history in Asia, the enhancement of its brand positioning in the region, local expertise, and the distribution power of its alliances and joint-venture partnerships.
Enhancement of the product offering in Europe — In the Americas, ING IM externalised its extensive fixed- income expertise — ING Real Estate showed excellent results — Baring Asset Management implemented new strategy
In mid-2003 the investment-management business of BAM implemented a new strategy.
This building, designed by Renzo Piano, will be a significant new commercial office tower in the Times Square area. It is being developed as a joint venture by ING Real Estate, the New York Times Company and Forest City Ratner Companies.
Clients ING Direct will always aim to outperform the market on customer value, ease of doing business and customer service. Innovative marketing, competitive product pricing and high service levels in the call centre illustrate this.
Report of the Executive Board 38 Annual Report 2003 · ING Group
After reaching break-even in the third quarter of 2002, ING Direct produced a pre-tax profit of EUR 151 million in 2003. ING Direct grew with 3.5 million clients (69%) and EUR 44.2 billion (80%)
Results In spite of important start-up losses in three new business units, ING Direct generated a pre-tax profit of EUR 151 million in 2003. Five out of eight business units were profitable: Canada,
ING Direct also has more flexibility to control its costs due to a higher percentage of variable costs
World Bank, and apply to projects in which at least USD 50 million are invested. The endorsement of the Equator Principles demonstrates that ING wants to stimulate its own customers to engage in sustainable business practices. In 2004,
ING’s community activities around the world are tailored to respond to local needs and the preferences of the local staff. The role of the Group is to provide overall guidelines to ensure activities do not pose any reputation risk.
We will gradually adapt our pay levels to the appropriate pay levels in the relevant markets.
Every voice heard Another goal ING wishes to achieve is its workforce to reflect its customer base.
The regions are related to the risk country of the underlying credit risk.
Only covers exposures in excess of EUR 10 bill ion, including intercompany exposures with ING Insurance.
The EUR 198 million increase in the EaR is due to changes in the gap profile and the implementation of a more advanced dynamic simulation approach, which is now used for a substantial part of the savings portfolios. The EUR 46 million increase in VaR is due to changes in the gap profile.
The total purchase price of the additional acquisition amounted to EUR 573 million. The goodwill amounted to EUR 532 million and is charged to Shareholders’ equity.
Loans to or guaranteed by public authorities 6,473 16,603 23,076 8,013 15,750 23,763
While these excluded items are significant components in understanding and assessing the
— New sales in 2003 contributed EUR 440 million to the embedded value.
Watson Wyatt has performed limited high level checks on the results of the calculations and has discovered no material issues. Watson Wyatt has not, however, performed detailed checks on the models and processes used.
Trust Office ING Shares, ING Group itself will not discuss the principles and provisions of best practice in respect of depositary receipts. You are referred to the Trust Office’s own report on this subject on page 76.
Messrs. Jacobs and Vuursteen, currently hold more supervisory directorships in Dutch listed companies than the maximum recommended in the Code. This issue will be discussed on the next occasion that these gentlemen become eligible for reappointment, which will be in 2006 in the case of Mr. Vuursteen and in 2007 in the case of
The structure outlined above means that depositary receipts are used to prevent a small minority of shareholders, which coincidentally may form the majority in the meeting, from taking decisions purely to suit themselves in the absence of other parties at the General Meeting of
encourages Executive Board members to perform other activities outside the Group.
Board, will retire on 1 June 2004. As chairman, he will be succeeded by Michel Tilmant as of 28
Hans Verkoren is Global Head of ING Direct and member of the Executive Committee ING Europe, responsible for Retail Financial Services.
Shareholders held after they have been a member for four years. The schedule for resignation by rotation is available for inspection at the ING
Other significant positions held: – Member of the Supervisory Board of Tessenderlo Chemie N.V.
This option was taken up by shareholders and depositary-receipt holders representing about 8% of the votes to be cast.
During the reporting year, the net number of depositary receipts issued for ordinary shares ran to 123,113,969. On 31 December 2003 the nominal value of administered shares amounted to EUR 507,590,679.12, for which 2,114,961,163 depositary receipts of EUR 0.24 were issued.
In addition to the base salary, senior management members enjoyed benefits similar to most other employees of ING Group. These include benefits like private medical insurance, the use of company cars and, if applicable, expatriate allowances.
The ING stock options have a total term of ten years and a vesting period of three years.
period. The initial number of granted performance shares is defined as 100%, which number will follow linear increase or decrease on the basis of the position after the three-year performance period as specified in the table.
Supervisory Board has provisionally determined the LTI award to be granted to the Executive
Fair Market Value of Long-term incentive (3) 481 238 238 396
The costs of the performance shares (intrinsic value at the grant date) are expensed pro rata over the vesting period, starting in 2004.
(1) For reasons of comparison, the company pension expenses are recalculated under IAS 19 with general assumption setting for 2000 to 2003.
As was the case in 2003, the total LTI value in stock options and provisional performance shares to be granted to the Executive Board will be determined by the Supervisory Board at the end of 2004, based on the achievement of the three pre-defined financial objectives set out in the 2004 short-term incentive plan.
INFORMATION ON THE OPTIONS OUTSTANDING AND THE MOVEMENTS DURING THE FINANCIAL YEAR OF OPTIONS RIGHTS
Within the bounds of commercial confidentiality, ING places the greatest importance on open and transparent communications with its customers, employees and shareholders, as well as society at large.
ING expects the highest levels of personal conduct by all its employees, whatever their position. It is acknowledged that all effective business relationships, inside as well as outside the Group, depend upon honesty, integrity and fairness.
While it is recognised that limited corporate hospitality is given and received as part of building normal business relationships, employees should avoid accepting hospitality or gifts which might appear to place them under an obligation.