ING posts solid 3rd-quarter earnings: underlying net profit EUR 1,654 million

*Robust business performance in challenging interest rate environment - 3rd-quarter underlying net profit declines 3.2% to EUR 1,654 million from EUR 1,708 million in 3Q2005 - Decline in interest rates leads to a net EUR 196 million negative variance from revaluation of strategic derivatives - Net profit 16.3% lower at EUR 1,571 million due to sale of DHB in 3Q2006, release of tax provision in 3Q2005 - Underlying net profit up 20.0% in first nine months to EUR 5,626 million *Value creation continues to be good as ING balances growth and returns - Risk-adjusted return on capital after tax for banking increases slightly to 20.5% in 1st nine months - Internal rate of return on new life business increases to 13.8% from 12.8% in 1st nine months - Value of new business from life insurance in developing markets up 22.0% to EUR 122 million in 3rd quarter - U.S. retirement services value of new business up 33.5% in 1st nine months despite lower sales in 3Q *ING continues to invest for growth over the long term - ING Direct adds EUR 5.8 billion in mortgages in 3rd quarter, expands U.S. business to Chicago in September - Life insurance sales in developing markets grow 12.9% in third quarter, driven by Central Europe and Asia Chairman's Statement "ING's well diversified portfolio of businesses delivered a solid business performance in the third quarter. The drop in long-term interest rates led to a 3.2% decline in underlying net profit to EUR 1,654 million as revaluations of strategic derivatives for which hedge accounting is not applied had a negative net variance of EUR 196 million. Nonetheless, the performance so far this year is substantially higher than last year with underlying net profit up 20.0% to EUR 5,626 million in the first nine months," said Michel Tilmant, Chairman of ING Group. "Compared with the second quarter, underlying net profit declined 17.8%, or EUR 357 million, for the most part due to a EUR 143 million negative variance in revaluations of strategic derivatives, lower dividend income due to seasonal patterns, and EUR 116 million lower capital gains on equities as we held off on realising gains as stock markets rallied." "In this challenging interest rate environment, with low long-term interest rates and flattening yield curves, ING sustained its business momentum and maintained market share through product development, while continuing pricing discipline to protect long-term value creation. We continue to grow the business in markets where we can achieve attractive margins and manage growth elsewhere to remain value accretive." "That resulted in healthy returns from both banking and insurance. The risk-adjusted return on capital after tax at the banking business increased slightly to 20.5% in the first nine months, supported by improved returns at Wholesale Banking. The internal rate of return on new life insurance sales increased to 13.8%, driven by sales from developing markets where margins are higher." "Meanwhile, ING invested to grow the business over the long term. ING Direct started marketing in Chicago in September and introduced mortgages in the U.K. in October as it expands its geographical footprint and product range. Growth at ING Direct continued, particularly in mortgages, which grew by a record EUR 5.8 billion in the third quarter. Life insurance in developing markets also showed strong growth with sales up 12.9% and the value of new business up 22.0%, driven by Central Europe and Asia." "Looking forward, low long-term interest rates and flat yield curves will continue to pose challenges, however we benefit from strong equity and real estate markets as well as favourable claims experience in non-life insurance. Although releases of provisions diminished, resulting in higher net risk costs, there is no visible deterioration in the quality of the credit portfolio. On balance, ING is well positioned to capture growth opportunities and we are confident in our ability to create value for our shareholders." Underlying profit excludes divestments and special items as specified in Appendix 2. P&L figures compare 3Q2006 with 3Q2005. Returns such as RAROC and IRR are calculated YTD. The full report including tables can be downloaded from the following link: 2006 third-quarter results ING Group The following documents can be downloaded from around 08.00 am CET from the following links: Press and Analyst presentation: ING Group Statistical Supplement: US Statistical Supplement: +-------------------------------------------------------------------+ | Contacts | | | | Media relations +31 20 541 6522 | | | | Press Conference Call: 9 November, 9 a.m. CET | | Listen only: | | NL +31 45 631 6902 | | UK +44 20 7153 2027 | | | | Investor relations +31 20 541 5571 | | | | Analyst Presentation: 9 November, 11:15 a.m. CET - ING House, | | Amsterdam | | Webcast | | | | Analyst Conference Call: 9 November, 4 p.m. CET | | Listen only: | | NL +31 20 796 5332 | | UK +44 20 8515 2303 | | US +1 303 262 2140 | +-------------------------------------------------------------------+