www.ing.com 2005 ING Group Annual Review Executing our strategy for profitable growth 1.0 WHO WE ARE FIVE YEARS’ KEY FIGURES IFRS Dutch GAAP 2005 2004 2004 2003 2002 2001 Balance sheet (in EUR billion) Total assets* 1,159 964 866 779 716 705 Capital and reserves* 37 28 26 21 18 22 Assets under management (in EUR billion) 547 492 492 463 449 513 Market capitalisation (in EUR billion) 65 49 49 39 32 57 Income (in EUR million) Insurance operations 57,424 55,602 55,398 53,233 59,449 55,274 Banking operations 13,848 12,678 12,537 11,680 11,201 11,111 Expenses (in EUR million) Insurance operations 5,195 4,746 4,837 4,897 5,203 5,583 Banking operations 8,844 8,795 8,658 8,184 8,298 8,186 Impairments/additions to the provision for loan losses (in EUR million) 119 475 497 1,288 2,099 907 Profit (in EUR million) Insurance operations 3,978 4,322 4,005 3,486 3,170 2,792 Banking operations 4,916 3,418 3,414 2,371 1,468 2,170 Profit before tax 8,894 7,740 7,419 5,857 4,638 4,962 Underlying (IFRS)/operating net profit (Dutch GAAP) 6,196 4,959 5,389 4,053 3,433 3,539 Divestments and special items (IFRS)/non-operating net profit (Dutch GAAP) 1,014 796 579 -10 1,067 1,038 Net profit 7,210 5,755 5,968 4,043 4,500 4,577 Distributable net profit 7,210 5,755 5,968 4,043 4,253 4,252 Figures per ordinary share of EUR 0.24 nominal value Net profit 3.32 2.71 2.80 2.00 2.32 2.37 Distributable net profit 3.32 2.71 2.80 2.00 2.20 2.20 Dividend 1.18 1.07 1.07 0.97 0.97 0.97 Capital and reserves* 16.96 12.95 11.76 10.08 9.14 11.03 Ratios (in %) ING Group (Operating) return on equity (ROE) 26.6 25.4 22.9 21.5 17.4 15.3 (Operating) net profit growth 25 n.a. 33 18 -3 4 Insurance operations Combined ratio 95 94 94 98 102 103 Capital-coverage ratio* 255 204 210 180 169 180 Banking operations BIS ratio ING Bank* 10.86 10.46 11.47 11.34 10.98 10.57 Tier-1 ratio ING Bank* 7.32 6.92 7.71 7.59 7.31 7.03 Cost/income ratio 63.9 69.4 69.1 70.1 74.1 73.7 Employees (average FTEs) 115,300 113,000 113,000 115,200 113,060 112,000 * Comparable figures shown under 2004 are IFRS-based figures at 1 January 2005; figures were restated due to adjustments to the opening balance sheet under IFRS. CONTENTS 1.0 WHO WE ARE ING AT A GLANCE 2 TOTAL ASSETS in EUR billion CHAIRMAN’S STATEMENT 4 1,200 1,100 STRATEGY 6 1,000 900 800 700 2.0 OUR PERFORMANCE 600 500 400 FINANCIAL HIGHLIGHTS 8 300 IFRS 200 100 Dutch GAAP RISK MANAGEMENT 11 0 96 97 98 99 00 01 02 03 04 04 05 INSURANCE 12 – Insurance overview 12 MARKET CAPITALISATION – Insurance Europe 13 in EUR billion – Insurance Asia/Pacific 14 90 – Insurance Americas 15 80 70 BANKING 16 60 – Banking overview 16 50 – Wholesale Banking 17 40 – Retail Banking 18 30 – ING Direct 19 20 10 ASSET MANAGEMENT 20 0 96 97 98 99 00 01 02 03 04 05 OUR PEOPLE 22 OPERATING/UNDERLYING NET PROFIT CORPORATE RESPONSIBILITY 23 in EUR billion 10 9 3.0 GOVERNANCE AND COMPLIANCE 8 7 CORPORATE GOVERNANCE 24 6 5 4 COMPLIANCE 25 3 IFRS 2 SUPERVISORY BOARD AND 1 Dutch GAAP EXECUTIVE BOARD 26 0 96 97 98 99 00 01 02 03 04 04 05 REMUNERATION 28 EMPLOYEES average FTEs, in thousands 4.0 GENERAL INFORMATION 120 110 INFORMATION FOR SHAREHOLDERS 30 100 90 80 ADDITIONAL INFORMATION 32 70 60 50 40 30 20 10 0 96 97 98 99 00 01 02 03 04 05 ING Group Annual Review 2005 1 1.0 WHO WE ARE ING AT A GLANCE MISSION PROFILE We strive to deliver our financial ING is a global financial services company individuals, families, small businesses, products and services in the way our with 150 years of experience, providing large corporations, institutions and customers expect: with exemplary a wide array of insurance, banking and governments. Based on market service, maximum convenience and asset-management services in over 50 capitalisation, ING is one of the 15 at competitive rates. This is reflected countries. Our 115,000 employees work largest financial institutions worldwide in our mission statement: to set the daily to satisfy a broad customer base: and in the top-10 in Europe. standard in helping our customers manage their financial future. ING INSURANCE – BANKING – ASSET MANAGEMENT ING has six business lines. A clear client focus and strong business logic are the key elements in this structure. INSURANCE Operates the insurance activities in the Netherlands, Belgium, EUROPE Spain, Greece and Central Europe. In these countries we offer life UNDERLYING PROFIT BEFORE TAX insurance with a particular focus on pensions. In the Netherlands INSURANCE EUROPE and Belgium we also offer non-life insurance. Insurance Europe 2005 2,021 also includes our European asset-management operations. 2004 1,612 in EUR million INSURANCE Conducts insurance operations and asset-management AMERICAS activities in the Americas. It is well-established in the United UNDERLYING PROFIT BEFORE TAX States with retirement services, annuities, life insurance and INSURANCE AMERICAS asset management. We have a leading position in non-life 2005 1,979 insurance in Canada. Furthermore, we are active in Mexico, 2004 1,601 Chile, Peru and Brazil. in EUR million INSURANCE Conducts the life-insurance operations and asset/wealth- ASIA/PACIFIC management activities in Asia/Pacific. It has well-established UNDERLYING PROFIT BEFORE TAX positions in Australia and New-Zealand, Hong Kong, Japan, INSURANCE ASIA/PACIFIC South Korea, Malaysia and Taiwan. The activities in China, 2005 447 India and Thailand are future growth engines for ING. 2004 475 in EUR million PREMIUM INCOME PER BUSINESS LINE in EUR million Insurance Europe 23% 10,702 Insurance Americas 50% 22,744 Insurance Asia/Pacific 27% 12,286 Other 26 Total 100% 45,758 2 ING Group Annual Review 2005 Visit www.ing.com for further information BUSINESS STAKEHOLDERS ING is a major financial services company insurer based on direct written premium. ING conducts its business on the in the Benelux home market. ING ING Direct is a leading direct bank with basis of clearly defined business services its retail clients in these markets 15 million customers in nine countries. principles. In all our activities we with a wide range of retail-banking, In the growth markets of Asia, Central carefully weigh the interests of our insurance and asset-management Europe and Latin America we provide stakeholders: customers, shareholders, products. In our wholesale-banking life insurance. We are also a large employees, business partners and activities we operate worldwide, but asset manager with assets under society at large. ING strives to be with a primary focus on the Benelux management of almost EUR 550 billion. a good corporate citizen. countries. In the United States, ING is a ING Real Estate is the largest property top-10 provider of retirement services company in the world based on its and life insurance, based on sales and total business portfolio. assets under management. In Canada, we are the top property and casualty WHOLESALE Conducts all the global wholesale-banking operations. BANKING Wholesale Banking offers a full range of products to corporates UNDERLYING PROFIT BEFORE TAX and institutions in the home markets in the Benelux countries. WHOLESALE BANKING Elsewhere it follows a more selective and focused client and 2005 2,276 product approach. 2004 2,092 A separate activity is ING Real Estate, the world’s largest in EUR million property company. RETAIL Offers retail-banking services in the Netherlands, Belgium, BANKING Poland, Romania, India and China. Private banking is offered UNDERLYING PROFIT BEFORE TAX in the Netherlands, Belgium, Luxembourg, Switzerland and RETAIL BANKING various countries in Asia, Latin America, and Central and 2005 1,815 Eastern Europe. 2004 1,168 in EUR million ING DIRECT Operates direct retail-banking activities for individual clients in Australia, Canada, France, Germany, Austria, Italy, Spain, UNDERLYING PROFIT BEFORE TAX the United Kingdom and the United States. The main ING DIRECT products offered are savings, mortgages and mutual funds. 2005 617 A separate activity is ING Card, which manages for ING the 2004 435 credit cards within the Benelux and Germany. in EUR million DISTRIBUTION OF LOANS AND ADVANCES TO CUSTOMERS in EUR billion Netherlands 55% 238.2 Belgium 9% 41.6 Rest of Europe 21% 90.3 North America 9% 40.5 Latin America 1% 2.8 Asia 2% 10.9 Australia 3% 14.9 Total 100% 439.2 ING Group Annual Review 2005 3 1.0 WHO WE ARE CHAIRMAN’S STATEMENT In 2005, we focused on creating value for our shareholders through a stringent approach to capital allocation, investing for growth, improving execution and increasing returns at all of our businesses. Our results provide evidence that we are delivering on those objectives and that our strategy is paying off. progress. Only a few years ago the internet was considered by many to be a hype, now it is big business, especially for financial services companies. People everywhere want to enjoy the practical benefits of modern technology.