* Outcome reflects strong capital position and resilient balance sheet
* Under adverse stress scenario and sovereign haircuts ING's Tier 1 ratio
would decline to 8.8% in 2011
* ING would remain well above hurdle rate of 6% Tier 1 ratio with surplus
Tier 1 capital of EURÂ 11.9 billion in 2011
* Strong pre-impairment income largely absorbs stress impact
ING participated in the stress tests conducted by the Committee of European
Banking Supervisors (CEBS), which included a baseline scenario, adverse scenario
and an additional sovereign shock for 2010 and 2011. ING Bank's pre-impairment
income remains resilient, which helps offset the impact of higher loan loss
provisions, additional impairments across the securities portfolios and
increased risk-weighted assets.
Under the adverse scenario, ING's Tier 1 ratio would decline from 10.2% at the
end of 2009 to 9.1% at the end of 2011. An additional sovereign risk scenario
would have a further impact of -0.3% on the estimated Tier 1 ratio, bringing it
down to 8.8% at the end of 2011. The threshold Tier 1 ratio for this exercise
was determined to be 6%, and ING would remain comfortably above this level with
a Tier 1 capital buffer of EUR 11.9 billion.
 "ING's focus on the strengthening of its Bank's balance sheet since the spring
of 2009 has given us sufficient resilience to endure a stressful economic
scenario", said Jan Hommen, CEO of ING Group. "Under the stress scenarios as
presented by CEBS, ING Bank's Tier 1 ratio would in 2011 come out at 8.8%, well
above the hurdle rate. This satisfactory result reaffirms our confidence in the
future and further supports the success of our businesses in the interests of
our customers and all other stakeholders. ING has always strongly supported
balanced stress tests and we hope this European stress test initiative will
contribute to improving confidence in the financial industry."
Under the Back to Basics Strategy started in the spring of 2009, ING de-risked
and deleveraged its balance sheet. Additionally, a significant turnaround in the
company's results and last year's rights issue have strongly supported the
strengthening of the capital base. Both resulted in a lower risk profile and a
capital position that is well able to absorb the effects of the stress scenarios
as presented by CEBS.
CEBS stress test information
ING was subject to the 2010 EU-wide stress testing exercise coordinated by the
Committee of European Banking Supervisors (CEBS), in cooperation with the
European Central Bank, and De Nederlandsche Bank. ING acknowledges the outcomes
of the EU-wide stress tests.
This stress test complements the risk management procedures and regular stress
testing programmes set up in ING under the Pillar 2 framework of the Basel II
and CRD requirements.
The exercise was conducted using the scenarios, methodology and key assumptions
provided by CEBS (see the aggregate report published on the CEBS website). As a
result of the assumed shock under the adverse scenario, the estimated
consolidated Tier 1 ratio would change to 9.1% in 2011 compared to 10.2% at the
end of 2009. An additional sovereign risk scenario would have a further impact
of -0.3 percentage point on the estimated Tier 1 ratio, bringing it to 8.8% at
the end of 2011, compared with the regulatory minimum of 4%.
Under the results of the stress test the Tier 1 capital would show a buffer of
EUR 11.9 billion on top of the CEBS threshold Tier 1 ratio of 6%, which ING
agreed to exclusively apply for the purposes of this exercise. This threshold
should by no means be interpreted as a regulatory minimum (the regulatory
minimum for the Tier 1 Â ratio is set to 4%), nor as a capital target reflecting
the risk profile of the institution determined as a result of the supervisory
review process in Pillar 2 of the CRD. ING has held rigorous discussions of the
results of the stress test with De Nederlandsche Bank.
Given that the stress test was carried out under a number of key common
simplifying assumptions (e.g. constant balance sheet) the information on
benchmark scenarios is provided only for comparison purposes and should in no
way be construed as a forecast.
In the interpretation of the outcome of the exercise, it is imperative to
differentiate between the results obtained under the different scenarios
developed for the purposes of the EU-wide exercise. The results of the adverse
scenario should not be considered as representative of the current situation or
possible present capital needs. A stress testing exercise does not provide
forecasts of expected outcomes since the adverse scenarios are designed as
"what-if" scenarios including plausible but extreme assumptions, which are
therefore not very likely to materialise. Different stresses may produce
different outcomes depending on the circumstances of each institution.
The objective of the 2010 EU-wide stress test exercise conducted under the
mandate from the EUÂ Council of Ministers of Finance (ECOFIN) and coordinated by
CEBS in cooperation with the ECB, national supervisory authorities and the EU
Commission, is to assess the overall resilience of the EU banking sector and the
banks' ability to absorb further possible shocks on credit and market risks,
including sovereign risks.
The exercise has been conducted on a bank-by-bank basis for a sample of 91 EU
banks from 20 EUÂ Member States, covering at least 50% of the banking sector, in
terms of total consolidated assets, in each of the 27 EU Member States, using
commonly agreed macro-economic scenarios (benchmark and adverse) for 2010 and
2011, developed in close cooperation with the ECB and the European Commission.
More information on the scenarios, methodology, aggregate and detailed
individual results is available from CEBS. Information can also be obtained from
the website of De Nederlandsche Bank.
Actual results
At December 31, 2009 mln euros
--------------------------------------------------------------------------------
Total Tier 1 capital 34.015
Total regulatory capital 44.731
Total risk weighted assets 332.375
Pre-impairment income (including operating 6.436
expenses)
Impairment losses on financial assets in -5.936
the banking book
1 yr Loss rate on Corporate exposures (%)1 0,38%
1 yr Loss rate on Retail exposures (%)1 0,45%
Tier 1 ratio (%) 10,23%
Outcomes of stress test scenarios
The stress test was carried out under a number of key common simplifying
assumptions (e.g. constant balance sheet, uniform treatment of securitisation
exposures). Therefore, the information relative to the benchmark scenarios is
provided only for comparison purposes. Neither the benchmark scenario nor the
adverse scenario should in any way be construed as a forecast.
Benchmark scenario at December 31, 20112 mln euros
--------------------------------------------------------------------------------
Total Tier 1 capital after the benchmark 40.366
scenario
Total regulatory capital after the 45.814
benchmark scenario
Total risk weighted assets after the 360.758
benchmark scenario
Tier 1 ratio (%) after the benchmark 11,19 %
scenario
Adverse scenario at December 31, 20112 mln euros
--------------------------------------------------------------------------------
Total Tier 1 capital after the adverse 37.836
scenario
Total regulatory capital after the adverse 43.071
scenario
Total risk weighted assets after the 417.980
adverse scenario
2 yr cumulative pre-impairment income after 13.074
the adverse scenario (including operating
expenses)2
2 yr cumulative impairment losses on -9.029
financial assets in the banking book after
the adverse scenario2
2 yr cumulative losses on the trading book -411
after the adverse scenario2
2 yr Loss rate on Corporate exposures (%) 1,21%
after the adverse scenario1, 2
2 yr Loss rate on Retail exposures (%) 0,91%
after the adverse scenario1, 2
Tier 1 ratio (%) after the adverse scenario 9,05%
Additional sovereign shock on the adverse mln euros
scenario at December 31, 2011
--------------------------------------------------------------------------------
Additional impairment losses on the banking -733
book after the sovereign shock2
Additional losses on sovereign exposures in -445
the trading book after the sovereign shock2
2 yr Loss rate on Corporate exposures (%) 1,31%
after the adverse scenario and sovereign
shock1, 2, 3
2 yr Loss rate on Retail exposures (%) 1,02%
 after the adverse scenario and sovereign
shock1, 2, 3
Tier 1 ratio (%) after the adverse scenario 8,84%
and sovereign shock
Additional capital needed to reach a 6 % 0
Tier 1 ratio under the adverse scenario +
additional sovereign shock, at the end of
2011
1. Impairment losses as a % of corporate/retail exposures in AFS, HTM, and loans
and receivables portfolios
2. Cumulative for 2010 and 2011
3. On the basis of losses estimated under both the adverse scenario and the
additional sovereign shock
Exposures to central and local governments
Banking group's exposure on a consolidated
basis
Amount in million reporting
currency
+--------------+-------------------+
|Name of bank | ING BANK |
+--------------+-------------------+
|Reporting date| 31 March 2010 |
+--------------+-------------------+
+-------------------+-------------------------+-------------+
| +------------+------------+ |
| Gross exposures | of which | of which |Net exposures|
| |Banking book|Trading book| |
+--------------+-------------------+------------+------------+-------------+
| Austria | 927 | 978 | -51 | 927 |
+--------------+-------------------+------------+------------+-------------+
| Belgium | 8.819 | 8.203 | 616 | 8.819 |
+--------------+-------------------+------------+------------+-------------+
| Bulgaria | 8 | 0 | 8 | 4 |
+--------------+-------------------+------------+------------+-------------+
| Cyprus | 24 | 24 | 0 | 24 |
+--------------+-------------------+------------+------------+-------------+
|Czech Republic| -33 | 2 | -35 | -33 |
+--------------+-------------------+------------+------------+-------------+
| Denmark | 14 | 0 | 14 | 14 |
+--------------+-------------------+------------+------------+-------------+
| Estonia | 0 | 0 | 0 | 0 |
+--------------+-------------------+------------+------------+-------------+
| Finland | 452 | 0 | 452 | 452 |
+--------------+-------------------+------------+------------+-------------+
| France | 7.676 | 8.161 | -484 | 7.642 |
+--------------+-------------------+------------+------------+-------------+
| Germany | 6.867 | 5.797 | 1.070 | 6.835 |
+--------------+-------------------+------------+------------+-------------+
| Greece | 2.425 | 1.919 | 506 | 2.425 |
+--------------+-------------------+------------+------------+-------------+
| Hungary | 188 | 187 | 2 | 188 |
+--------------+-------------------+------------+------------+-------------+
| Iceland | 30 | 30 | 0 | 30 |
+--------------+-------------------+------------+------------+-------------+
| Ireland | -50 | 0 | -50 | -50 |
+--------------+-------------------+------------+------------+-------------+
| Italy | 6.443 | 4.580 | 1.863 | 6.443 |
+--------------+-------------------+------------+------------+-------------+
| Latvia | 0 | 0 | 0 | 0 |
+--------------+-------------------+------------+------------+-------------+
|Liechtenstein | 0 | 0 | 0 | 0 |
+--------------+-------------------+------------+------------+-------------+
| Lithuania | 7 | 6 | 0 | 7 |
+--------------+-------------------+------------+------------+-------------+
| Luxembourg | 0 | 0 | 0 | 0 |
+--------------+-------------------+------------+------------+-------------+
| Malta | 0 | 0 | 0 | 0 |
+--------------+-------------------+------------+------------+-------------+
| Netherlands | 4.199 | 3.314 | 885 | 4.240 |
+--------------+-------------------+------------+------------+-------------+
| Norway | 0 | 0 | 0 | 0 |
+--------------+-------------------+------------+------------+-------------+
| Poland | 5.056 | 4.909 | 147 | 5.056 |
+--------------+-------------------+------------+------------+-------------+
| Portugal | 1.773 | 1.382 | 391 | 1.773 |
+--------------+-------------------+------------+------------+-------------+
| Romania | 296 | 0 | 296 | 299 |
+--------------+-------------------+------------+------------+-------------+
| Slovakia | 171 | 15 | 156 | 171 |
+--------------+-------------------+------------+------------+-------------+
| Slovenia | -20 | 11 | -31 | -20 |
+--------------+-------------------+------------+------------+-------------+
| Spain | 1.380 | 1.809 | -429 | 1.380 |
+--------------+-------------------+------------+------------+-------------+
| Sweden | 6 | 0 | 6 | 6 |
+--------------+-------------------+------------+------------+-------------+
|United Kingdom| 0 | 0 | 0 | 9 |
+--------------+-------------------+------------+------------+-------------+
Press enquiries Investor enquiries
Frans Middendorff ING Group Investor Relations
+31 20 541 6516 +31 20 541 5460
frans.middendorff@ing.com Investor.relations@ing.com
ING PROFILE
ING is a global financial institution of Dutch origin offering banking,
investments, life insurance and retirement services. As of 31 March 2010, ING
served more than 85 million private, corporate and institutional clients in more
than 40 countries. With a diverse workforce of about 105,000 people, ING is
dedicated to setting the standard in helping our clients manage their financial
future.
IMPORTANT LEGAL INFORMATION
Certain of the statements contained herein are statements of future expectations
and other forward-looking statements. These expectations are based on
management's current views and assumptions and involve known and unknown risks
and uncertainties. Actual results, performance or events may differ materially
from those in such statements due to, among other things, (i) general economic
conditions, in particular economic conditions in ING's core markets, (ii)
performance of financial markets, including developing markets, (iii) the
implementation of ING's restructuring plan to separate banking and insurance
operations, (iv) changes in the availability of, and costs associated with,
sources of liquidity, such as interbank funding, as well as conditions in the
credit markets generally, including changes in borrower and counterparty
creditworthiness, (v) the frequency and severity of insured loss events, (vi)
mortality and morbidity levels and trends, (vii) persistency levels, (viii)
interest rate levels, (ix) currency exchange rates, (x) general competitive
factors, (xi) changes in laws and regulations, (xii) changes in the policies of
governments and/or regulatory authorities, (xiii) conclusions with regard to
purchase accounting assumptions and methodologies, (xiv) changes in ownership
that could affect the future availability to us of net operating loss, net
capital loss and built-in loss carryforwards, and (xv) ING's ability to achieve
projected operational synergies. Â ING assumes no obligation to update any
forward-looking information contained in this document.
[HUG#1433883]
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