ING Group ING is delivering on its priorities while remaining customer focused Macquarie Financials Conference Patrick Flynn Chief Financial Officer Zurich – 22 November 2011 www.ing.com ING is delivering on its priorities while remaining customer focused Separation and divestment process on track Underlying net profit ING Group up 43.3% versus 9M 2010 • ING is executing a fundamental turn-around of its business to create strong, separate banking and insurance companies • In our preparation for 2 Insurance IPOs, important steps have been made to realign the legal structure 4,276 and governance 2,984 • Insurance businesses are making good progress on 818 performance improvement initiatives 9M2009 9M2010 9M2011 ING Bank is well positioned for the future ING Bank’s Core Tier 1 ratio was 9.6% and meets EBA Capital target • ING Bank continues to show solid results despite impairments on Greek government bonds 0.1% • ING Bank has reduced the balance sheet while -0.3% growing customer lending 9.6% 9.4% • ING Bank has a strong funding structure and 30 Sep REIM Market 30 Sep modest long-term funding needs 2011 RWA 2011 • Further upside from balance sheet integration and reported Pro- One Bank initiatives forma Macquarie Conference - 22 November 2011 2 Separation and divestment process on track Macquarie Conference - 22 November 2011 3 ING is executing a fundamental turn-around of its business to create strong, separate banking and insurance companies Delivering on EU restructuring Separation and preparation for the base case of 2 IPOs Action • Sell ING Direct USA Announced • Bank and Insurance/IM operationally split at the end of 2010 • Sell Insurance Latin Announced America* • Operational disentanglement of US and • Insurance US Base case IPO EurAsia Insurance/IM operations expected to be finalised at the end of this year • Insurance EurAsia Base case IPO • Preparation for the base case of 2 IPOs is • Divesting Operationally making progress WestlandUtrecht split; exploring Bank further options Further streamlining in 2011 Separation and preparation costs 2011 at the lower end of our expectations Action • Sell ING Real Estate Completed • Separation and IPO preparation costs were Investment EUR 55 mln in 3Q11 and EUR 116 mln Management (REIM) September YTD after-tax • Sell ING Car Lease Completed • It is anticipated that these costs will remain within the previously announced amount of EUR 250 million after tax * ING’s Latin American pension, life insurance and investment management operations. Sul America is not included in this transaction Macquarie Conference - 22 November 2011 4 In our preparation for 2 Insurance IPOs, important steps have been made to realign the legal structure and governance Simplified legal structure • Regulatory approvals are in progress to create a separate holding company under ING ING Groep N.V. Verzekeringen N.V. for our Insurance EurAsia businesses Jan Hommen • Management structure aligned per Patrick Flynn 3 November 2011 Wilfred Nagel* • These represent ‘no regrets’ steps which in no way limit strategic flexibility on execution ING Bank N.V. ING Verzekeringen N.V. • New legal structure maintains flexibility with respect to timing and order of the planned IPOs • Change in legal structure will allow IPO Entity IPO Entity ING to optimise the debt structure ING Insurance EurAsia ING America Insurance of the two IPO entities Holdings Inc (AIH) • Ultimately, ING Verzekeringen N.V. will become a legacy entity and will Jan Hommen Jan Hommen be wound down over time Patrick Flynn Patrick Flynn Wilfred Nagel Wilfred Nagel • This process will be carefully Lard Friese Rod Martin managed, including managing change of control provisions in Matt Rider Alain Karaoglan Gilbert Van Hassel Rob Leary some instruments which will likely Ewout Steenbergen be triggered at the time of the IPOs * Subject to 2012 AGM Macquarie Conference - 22 November 2011 5 ING Bank: a liability-focused European Bank ING Direct Retail Benelux Retail International Central Europe • ING Direct active in Canada • ING Retail is #2 bank in • Funds Entrusted: Netherlands and #4 in Belgium • ING Bank has strong positions in EUR 21 bln • Funds Entrusted: Central / Eastern Europe and Turkey • Number of clients: 1.8 mln EUR 176 bln • Funds Entrusted: EUR 19 bln • Number of clients: 11.6 mln • Number of clients: 5.9 mln Retail International Asia • ING Retail active in China, India and Thailand • Funds Entrusted: EUR 4 bln • Number of clients: ING Commercial Banking 4.6 mln ING Direct • ING Commercial Banking has leadership positions in core • ING Direct active in Austria, markets such as the Benelux & ING Direct CEE and an international France, Germany, Spain, Italy network in 40 countries and the UK • ING Direct in Australia • Strong focus on core products • Funds Entrusted: such as Structured Finance and EUR 146 bln • Funds Entrusted: EUR 18 bln Financial Markets • Number of clients: 13.2 mln • Number of clients: 1.5 mln Macquarie Conference - 22 November 2011 6 Insurance EurAsia: European-based Insurer with strong growth profile in Asia and CRE Insurance Benelux ING Investment Management • #1 life insurer in the Netherlands1 • #4 non-life insurer in the • Principal Investment Manager Netherlands 1 for Insurance EurAsia • IIM Europe: EUR 149.6 bln AUM • IIM Asia: EUR 60.0 bln AUM Insurance Central and Rest Insurance Asia of Europe • Presence in 7 Asian countries • Top 5: Malaysia and South Leading Life & Pensions provider in CRE. Presence in 9 countries. Korea 1 Ranking based on Gross Written Premium of 2009. Competitor information based on company’s websites Macquarie Conference - 22 November 2011 7 Insurance US: focused US insurer with leading position in retirement service Insurance US US Insurance ING IM • Top 10 Life Insurance • Overall, ING ranks in the top 20 managers of Writer in the US4 institutional tax-exempt assets1 • +80k points of • EUR 120.6 bln AUM2 distribution • More than 70% of ING IM’s retail mutual through 3 funds beat their 5-year Lipper category channels average3 • +1.2 mln inforce policies • Second largest writer US Retirement Services of Term policies in the US4 • Third largest provider of Defined Contribution in the US based on AUM and administration, the second largest based on the number of plan participants • Top 5 in Small / Mid-Corporate market4 • Ranked #1 in K – 12 sales4 1 – Pensions and Investments 31/12/10. 2 – As of 30/9/11 3 – Lipper 30/6/11. 4 – LIMRA 3Q11 survey. Macquarie Conference - 22 November 2011 8 ING has reported solid results Macquarie Conference - 22 November 2011 9 Underlying net profit of EUR 4,276 mln in 9M11, up 43.3% versus 9M10 despite Greek impairments Underlying pre-tax result Underlying pre-tax result Underlying net result Bank (in EUR mln) Insurance* (in EUR mln) ING Group (in EUR mln) 591 455 4,383 4,061 4,276 323 2,984 1,663 1,199 818 -245 -198 9M2009 9M2010 9M2011 9M2009 9M2010 9M2011 9M2009 9M2010 9M2011 Impairments on Greek government bonds • Group net profit was EUR 4,580 mln in 9M2011 versus EUR 2,680 mln in 9M2010 • First nine months results include impairments on Greek government bonds of EUR 777 mln pre-tax (or EUR 593 mln after-tax) * Insurance 2009-2010 figures have been restated to reflect 1) the sale of ING Insurance Latin America which is booked in discontinued operations until closing (expected in 4Q11) and 2) the change in accounting policy i.e. the move towards fair value accounting for GMWB for life in the US Closed Block VA as of 1 January 2011. Macquarie Conference - 22 November 2011 10 Bank is making progress on Ambition 2013 Underlying income (EUR million) Underlying cost/income ratio (%) 455 75% 68.7% C/I ratio Target excl. 65% 56.0% 58.3% 12,873 12,489 CAGR market 10,137 2010-13: 55% Target: 50% impacts 5% was 54.7% 45% in 9M2011 9M2009 9M2010 9M2011 FY09 FY10 9M2011 Impairments on Greek government bonds Underlying risk costs in bps of RoE (YTD, %) average RWA 25% 100 20% 17.6% 16.5% 13.1% Target*: 75 15% 11.4% 13-15% Normalised: 10% 50 5.0%4.3% 85 40-45 bps 5% 25 53 48 0% 0 FY09 FY10 9M2011 FY09 FY10 9M2011 Equity based on CT1 ratio of 7.5% IFRS-EU equity * Target assumes average equity based on core Tier 1 ratio of 7.5%. Macquarie Conference - 22 November 2011 11 Insurance operations showing clear progress on Ambition 2013 Life general account (EUR bln) and Life & IIM administrative expenses / investment spread*,** (bps) Life & IIM operating income** (%) 200 120 104 50% 150 94 100 44.2% 100 84 45% 44.0% 80 50 141 165 171 40% 39.5% 0 60 9M2009 9M2010 9M2011 35% Target: ≤35% General account assets (Target: CAGR ≥4%) 30% Investment spread (Target: ≥105 bps) FY09 FY10 9M2011 APE** (EUR bln) RoE**,*** (YTD, %) 15% Target: ≥10% 9.3% Target 10% 5% 3.1 3.2 3.2 CAGR 2010-13 0% ≥10% -5% -2.5% -10% -5.0% 9M2009 9M2010 9M2011 FY09 FY10 9M2011 * Four-quarter rolling average ** Insurance 2009, 2010 and 1Q11 figures have been restated to reflect the sale of ING Insurance Latin America which is booked in discontinued operations until closing. *** Annualised underlying net result divided by average IFRS-EU equity. (For Insurance, the 2010 quarterly results are adjusted for the after-tax allocated cost of Group core debt.). Macquarie Conference - 22 November 2011 12 ING meets EBA Capital target of 9% Core Tier I ratio 0.1% -0.3% • The Core Tier 1 ratio was 9.6% at 30 September 2011 9.6% • The 2011 year-end implementation of market risk model updates, including the 9.4% impact of Basel 2.5, is estimated at around EUR 11 bln or -30 bps • ING has a positive unrealised result on its