General Data Protection Regulation 2016/679 (GDPR). In 2013, ING implemented data protection requirements on a global scale, through its Global Data Protection Policy (GDPP). The GDPP has been implemented in each country where ING operates and is being updated to reflect GDPR
Incorporating what was formerly the Wholesale Banking accelerator, initiatives originating from here include Suburbia, which provides alternative data that clients can use to make better decisions faster, and cybersecurity tool Wyse. Developed in 2017 with start-up Digital Trust, Wyse is a gamebased platform that uses behavioural science to help company employees make safer decisions, effectively becoming its first line of defence against cybercrime. A commercial pilot started in 2018, offering companies a new service that goes beyond banking.
Contents | Report of the Executive Board | Corporate governance | Consolidated annual accounts | Parent company annual accounts | Other information | Appendices > Innovation and transformation it resulted in 6,200 new loan applications with the chatbot able to pick up 97 percent of chat conversations. The remaining three-percent of chats were handled by live agents.
Low volatility on stock and currency markets dampened appetite for hedging and impacted growth in our Financial Markets business. Mounting concerns about emerging markets currencies and the potential for defaults, and in particular the sharp fall of the Turkish currency, reverberated through lending markets. Pessimism about macro-economic developments such as the trade war between the US and China unsettled financial markets and dampened consumer confidence. The rising oil price caused inflation to increase, subduing real income growth.
One of the ways we measure our progress is the Net Promoter Score, which measures customer satisfaction and loyalty (whether they would recommend ING to others). The score is calculated as the difference between the percentage of promoters (who rate ING as 9 or 10 out of 10) and detractors (those scoring ING below a 6). Our aim is to achieve a number one NPS ranking in all 13 retail markets, with a 10-point lead over our main competitors. Based on a rolling average of our
ING Global Index Portfolios is a new low-cost and easy-to-use investment product that gives customers an alternative to savings accounts. Developed jointly in the Netherlands, Austria,
Belgium due to margin pressure and lower income from investment and financial markets products. Total customer lending increased by €12.0 billion to €408.4 billion compared with the opening balance sheet as of 1 January 2018. Adjusted for currency impacts and excluding Bank
Risk costs turned to a net release of €31 million, or -6 basis points of average risk-weighted assets, from a net addition of €13 million in 2017, reflecting the continued positive macroeconomic conditions in the Netherlands.
Retail Other’s underlying result before tax increased 13.0 percent to €932 million in 2018, from €825 million in 2017. This was mainly due to higher income, partly offset by increased expenses and higher risk costs.
We understand it is not always easy for people to speak up when they encounter unacceptable behaviour in the workplace. That is why we have multiple ways for employees to raise their concerns, also anonymously. One of these is whistleblowing. See more about our Whistleblower
‘continuous conversations’ between managers and individuals that are meaningful, powerful and immediate. It also introduces a consistent process with emphasis on fewer, more challenging
To ensure our people have the right capabilities to stay a step ahead we allocate a budget for employee training. In 2018, we spent €87 million to help employees become the best they can be.
Data collected in 2017 indicated rising sickness rates in some countries. We are working with our data analytics specialists to identify the reasons for this. As yet, there is no global database tracking sickness leave at ING as local laws in some countries don’t allow us to collect this information. We have introduced a uniform structured approach to measure sickness leave in five countries and intend to extend this to more countries in the future. We are continuously working to understand the causes of employee absenteeism and the links to stress, as well as looking for ways to alleviate this.
F&L position through three main lenses: (i) Stress; (ii) Sustainability and (iii) Regulatory. For each lens, ING has a set of risk appetite statements that underscore the bank’s risk appetite profile commensurate with the principles for liquidity adequacy. These risk appetite statements are subsequently translated into a number of metrics with appropriate boundaries and instruments to measure and manage ING’s F&L adequacy.
EU-wide stress test conducted by the EBA in cooperation with the European Central Bank (ECB), the
The independent risk management departments, headed by the chief risk officer (CRO), act as a second line of defence. As a member of the Executive Board, as well as the Management Board
(RSRS) publicly disclosed in May 2017 and has now strengthened its own restrictive approach with a zero tolerance approach. Any financing is only allowed if the ship breaking yard is either approved under the EU Ship Recycling Regulations or the scrapping process is duly certified by an independent party acceptable to ING.
Important dates in 2019¹ 25 March ING Investor Day 23 April 2019 Annual General Meeting 25 April2 Ex-date for final dividend 2018 (Euronext Amsterdam)
The data with a footnote (1) in the Performance Highlights table is within the reasonable assurance scope. See the ‘Independent auditor’s assurance report’.
Additional information More information can be found in the ‘Corporate governance’ chapter and the ‘Remuneration report’ chapter, which are deemed to be incorporated by reference here.
(denominator) changes at ING Group, the fact that such percentage has reached, exceeded or fallen below a threshold must also be notified to the Dutch Authority for the Financial Markets.
Koos Timmermans was a member of the Executive Board and CFO of ING Group since 8 May 2017.
For an overview of loans granted to members of the Supervisory Board, see the ‘Remuneration report’
Board’s remuneration policy. The policy specifies that total direct compensation should be below the median of comparable positions in the Euro Stoxx 50 peer group. For 2018, the CRO
• Important steps taken in the four major digital transformation programmes:  Unite be+nl: almost 600,000 Record Bank customers were successfully migrated to ING and introduced to the clear & easy ING
Supervisory Board members may obtain banking and insurance services from ING Group subsidiaries in the ordinary course of their business and on terms that are customary in the sector. The Supervisory Board members do not receive privileged financial services. As of 31
Supervisory Board members are permitted to hold ING shares as a long-term investment. The table below shows the holdings by members of the Supervisory Board at 31 December 2018,
– Customer deposits 19,753 18,223 23,493 Net cash flow from/(used in) investing activities 5,451 11,754 6,134
– Other investments –258 –264 –288 Cash and cash equivalents at beginning of year 18,976 16,164 20,379
There is no significant impact of the adoption of IFRS 16 on ING Group’s Net result, Comprehensive income or Shareholders’ equity on transition. This follows ING’s implementation decision where the value of the right-of-use asset is based on the value of the lease liability, adjusted for any previously recognised prepaid and/or accrued lease payments on that lease contract, as is permitted under the Standard.
11 ‘Joint Arrangements’, IAS 12 ‘Income Taxes’, IAS 23 ‘Borrowing Costs’ (issued on 12 December 2017); and
Other Assets and Other Liabilities include the impact of reclassification of accrued interest from other assets and other liabilities to the corresponding balance sheet item of the host contract
n/a 30,437 FVOCI debt securities n/a 3,800 FVOCI (designated) equity securities n/a 3,364 FVOCI loans and advances 6 n/a 48,480 Amortised cost Securities at amortised cost
For Stage 3 assets the PD equals 100% and the LGD and EAD represent a lifetime view of the losses based on characteristics of defaulted facilities.
banding thresholds constitute a key source of estimation uncertainty. Analysis of the sensitivity associated with the assessment of significant increase in credit risk is presented in Note 53, Risk
ING Group assesses periodically and at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, but before the balance sheet date, (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The following circumstances, among others, are considered objective evidence that a financial asset or group of assets is impaired:
Contingent liabilities are not recognised in the statement of financial position, but are rather disclosed in the notes unless the possibility of the outflow of economic benefits is remote.
The Addition to loan loss provisions in the Consolidated statement of profit or loss (EUR 656 million)
Contents | Report of the Executive Board | Corporate governance | Consolidated annual accounts | Parent company annual accounts | Other information | Appendices > Assets and liabilities held for sale > 12 includes a receivable at the Dutch level (from NN Group) regarding tax due by ING Australia
Interest income on trading derivatives n/a 16,108 16,081 Interest expense on trading derivatives n/a 16,117 16,263
Interest income on other trading portfolio n/a 1,028 728 Interest expense on other trading liabilities n/a 744 210
Fee and commission expenses Impact of adoption of IFRS 9 on Interest income and expense presentation
Contents | Report of the Executive Board | Corporate governance | Consolidated annual accounts | Parent company annual accounts | Other information | Appendices > Result on disposal of group companies > 25 on the disposal of shares held in VISA Europe Limited, reference is made to Note 8 ‘Share of associates and joint ventures’, and Note 20 ‘Equity’.
Luxemburg ING Luxembourg S.A. Wholesale / Retail 791 777 793 315 298 274 13,313 14,748 10,783 198 68 138 50 27 32
Indonesia PT ING Securities Indonesia Wholesale 3 5 5 0 1 1 6 6 7 –0
Amounts recognised directly in Other comprehensive income (equity) were as follows: Opening balance –400 –371
This relatively high amount of non-deductible expenses is caused by the settlement agreement reached with the Dutch authorities on regulatory issues (tax amount: EUR 194 million).
The fair values of securities in the trading portfolio and other liabilities at fair value through profit or loss are based on quoted market prices, where available. For those securities not actively traded, fair values are estimated based on internal discounted cash flow valuation techniques using
In 2018, the increase in Level 2 financial assets and liabilities is mainly due to increased (reverse)
– Cross currency interest rate derivatives 5 48 –601 –4,461 –5,622 –2,647 –793 –239 –14,311
Group offers financial products related to loans. These products include traditional off-balance sheet credit-related financial instruments.
(civil and criminal) settlement of any claims in connection with this separate proceeding, which settlement is binding.
The fair value of the swap held by ING at 31 December 2018 amounted to EUR –33 million (2017: EUR –41 million); fair value changes on this swap recognised in the statement of profit or loss in 2018 were EUR 8 million (2017: EUR –36 million). Service fee income recognised, for the role as administrative agent, in the statement of profit or loss in 2018 amounted to EUR 2 million (2017: EUR 2 million). The cumulative income recognised in profit or loss since derecognition amounts to
As a member of the EB and the MBB, the CRO ensures that risk management issues are heard and discussed at the highest level. The CRO steers a risk organisation both at head-office and businessunit levels, which participates in commercial decision-making, bringing countervailing power to keep the agreed risk profile within the risk tolerance. Every quarter, the CRO reports to the SB
aims to gain a sound risk culture and that every employee in every part of the organisation understands how his/her actions and behaviour can help earn and retain customer and stakeholder trust. Additional modules with topics such as ‘Data@Risk’ (on dealing with data), ‘Let’s speak up’
The decision of the United Kingdom and EU to agree regarding leave the European Union (‘Brexit’)
Note 11 Other assets -Amounts to be settled Note 17 Other liabilities
All PD, EAD and LGD models used for regulatory capital and for IFRS loan loss provisioning are built according to ING’s internal credit risk modelling methodology standards and model life cycle. After a model validation by Model Risk Management (MoRM), the Model Development Committee (MDC)
companies in Central Europe, the Netherlands, Belgium, Luxembourg, as well as residential mortgage and consumer loan models in the various retail markets.
The guiding principles are that each data element is only input once, and has a clear data owner and ‘home’ system or database which is leading throughout all uses of that data element. From the data ‘home’, the data may then be redistributed to other systems or databases that may require that data in an automated Straight through Processing (STP) method. Depending on the need, the data may be transferred in real time, near real time, daily, weekly or monthly.
5 For a reference to the Notes in the Annual Report we refer to the table 'Reconciliation between credit risk categories and financial position'.
USA, while reduced concentration in Retail Challengers & Growth Markets was mainly due to lower securitization exposures in United States and Spain.
The asset that has been pledged to ING as collateral or security gives ING the right to liquidate it in cases where the customer is unable to fulfil its financial obligation. As such, the proceeds can be applied towards full or partial compensation of the customer's outstandings exposure. An asset can be tangible (such as cash, securities, receivables, inventory, plant & machinery and mortgages on real estate properties) or intangible (such as patents, trademarks, contract rights and licenses).
Wholesale Banking forborne portfolio and 67% (2017: 73%) of the total Wholesale Banking nonperforming forborne portfolio. Decreases in forborne portfolio were mainly visible in the industries
Supervision of market risk falls under the responsibility of the MBB and is delegated to the ALCO
This ALCO structure facilitates top-down risk management, limit setting, and the monitoring and control of market risk.
 Wholesale Banking loans typically do not experience interest rate prepayment behavior as they are hedged from an interest rate risk perspective and therefore do not contain significant convexity risk.
According to the Capital Requirements Regulation (CRR/CRD IV), regulatory capital (own funds requirements) for market risk can be calculated using the standardised approach or an internal model approach. ING received regulatory approval to use an internal model to determine the regulatory capital for the market risk in all trading books of ING. Market risk capital of trading books is calculated according to the CRR, using internal VaR, SVaR, and IRC models, where diversification is taken into account. Foreign exchange risk from the banking books are calculated using
ING has a Funding & Liquidity framework in place such that ING has sufficient liquidity under normal, adverse and stressed market circumstances. In general, ING considers the adequacy of its
For each lens, ING has in place a set of risk appetite statements which define its risk appetite profile commensurate with the principles of liquidity adequacy. These are summarised in the next graph.
 Regulatory requirements: understanding of the changing regulatory landscape and of the different, sometimes contradicting, effects ING’s actions have on regulatory boundaries.
Information Risk Management (IRM), the Independent Validation Unit (IVU) and Corporate Security
(‘signatory countries’), including the Netherlands, have signed a multilateral competent authority agreement to automatically exchange information pursuant to CRS. The majority of countries where ING has a presence have committed to CRS. The EU has made CRS mandatory for all its
ING Group’s dividend policy aims to pay a progressive dividend that will reflect considerations including expected future capital requirements, growth opportunities of the Group, net earnings, and regulatory developments. The Executive Board proposes to pay a total cash dividend of €2,646
Contents | Report of the Executive Board | Corporate governance | Consolidated annual accounts | Parent company annual accounts | Other information | Appendices
0.24 per ordinary share was paid. Therefore, a final dividend of EUR 0.44 per ordinary share remains. The final dividend will be paid entirely in cash after ratification of the proposal by the
failure to communicate to customers the terms of, and the benefits to customers of, complex or
financial institutions are required to comply with other US withholding and reporting requirements on certain payments. The Group intends to take all necessary steps to comply with FATCA and other US withholding tax regulations. ING is for example updating and strengthening its withholding compliance programme and reviewing, amending and filing the necessary tax returns and information reports.
ING’s MREL requirement in line with the BRRD and according to their MREL policy. In October 2016, the BCBS issued a final standard regarding the regulatory capital treatments of TLAC holdings of other G-SBIBs, confirming that G-SIBs must deduct from their own TLAC exposures TLAC
Portugal, Slovakia, Slovenia and Spain). The initial proposal contemplated that the FTT would enter into effect on 1 January 2014, which would have then required us to pay a tax on transactions in financial instruments with parties (including Group affiliates) located in such FTT-zone. However, the
In the Netherlands and other jurisdictions, deposit guarantee schemes and similar funds
Investors also may not be able to enforce judgments of US courts under the US federal securities laws in courts outside the United States, including the Netherlands. The United States and the
Employee-related data is collected based on boundaries of employee types set and disclosed in our non-financial data reporting protocol. Any assumptions are referenced in the respective tables below. A total of 9% of our FTEs are external employees, indicating a small portion of the organizations activities are performed by workers who are not internal ING employees. Further information on employee-related matters is available in ‘Our people’ chapter.
Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to a number of factors, including, without limitation: (1) changes in general economic conditions, in particular economic conditions in ING’s core markets, (2) changes in performance of financial markets, including developing markets, (3)