ING Direct 2004 Annual Report Download - page 176

174 ING Group Annual Report 2004
FINANCIAL GLOSSARY2.4
GENERAL
INFORMATION
ASSOCIATE
An associate is a participating interest in which a significant
influence is exercised over the financial and operating policy
and which is neither a subsidiary nor a joint venture of the
investor.
BASIC NET PROFIT PER ORDINARY SHARE
The net profit per ordinary share is calculated on the basic
of the weighted average number of ordinary shares in issue.
The following has been taken into consideration in calculating
the weighted average number of ordinary shares in issue:
– own shares held by group companies are deducted from
the total number of ordinary shares in issue;
– the computation is based on daily averages;
– in the case of exercised warrants, the day of exercise is taken
into consideration.
BIS
The Bank for International Settlements (BIS) is an international
organisation which fosters international monetary and
financial co-operation and serves as a bank for central banks.
BIS has set a minimum for the solvency ratio reflecting the
relationship between capital and risk weighted assets. The
ratio should at least be 8%.
CERTIFICATES OF DEPOSIT
Short-term negotiable bearer debt instruments issued by
banks.
CLAIM
A demand for payment of a policy benefit because of the
occurrence of an insured event, such as the death or disability
of the insured or the maturity of an endowment, the
incurrence of hospital or medical bills, the destruction or
damage of property and related deaths or injuries, defects in,
liens on, or challenges to the title to real estate, or the
occurrence of a surety loss.
CLAIMS RATIO
The claims ratio is the claims, including claims handling
expenses, expressed as a percentage of net earned premiums.
COMBINED RATIO
The sum of the claims ratio and the cost ratio for a non-life
insurance company or a reinsurance company. A combined
ratio of more than 100% does not necessarily mean that there
is a loss on non-life insurance policies, because the result also
includes the allocated investment income.
CONTROL
Control is presumed to exist when ING Group has, direct or
indirect through group companies, more than one half of the
voting power or otherwise exercises effective control.
CONCENTRATIONS
Concentrations of credit risk exist when changes in economic,
industry or geographical factors similarly affect groups of
counterparties whose aggregate exposure is material in
relation to ING Group’s total exposure.
CONTINGENT LIABILITIES
Contingent liabilities are commitments or risks, for which it
is more likely than not that no outflow from ING Group
of resources embodying economic benefits will occur. The
underlying value of these liabilities is not recorded as liabilities
in the balance sheet. For these products, the underlying value
represents the maximum potential credit risk to which ING
Group is exposed, i.e. assuming that all counterparties failed
completely to perform in accordance with the terms of the
contracts and that any existing collateral or security proves
to be of no value.
CONVERTIBLE DEBENTURE
Convertible debentures are debentures with embedded
options issued by corporations. The holder has the right to
exchange a convertible debenture for equity in the issuing
company at certain times in the future according to a certain
exchange ratio. Very often, the conversion is callable. This
means that it can be repurchased by the issuer at a certain
price at certain times in the future. Once the debentures have
been called, the holder can always choose to convert prior to
repurchase.
COST RATIO
Underwriting costs expressed as a percentage of premiums
written.
COUNTRY RISK
The risk that a foreign government will not fulfil its
obligations or obstructs the remittance of funds by debtors,
either for financial reasons (transfer risk) or for other reasons
(political risk).
CREDIT INSTITUTIONS
Credit institutions are all institutions which are subject to
banking supervision by public authorities, including mortgage
banks, capital market institutions, multilateral development
banks and the International Monetary Fund (IMF).
DEFERRED TAX ASSETS
The amounts of income tax recoverable in future periods
in respect of:
– deductible temporary differences;
– the carry forward of unused tax losses; and
– the carry forward of unused tax credits.