ING Direct 2007 Annual Report Download

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Annual Review
ING Group
2007
Focusing the strategy
to accelerate growth

Table of contents

  • Page 1
    2007 ING Group Annual Review Focusing the strategy to accelerate growth

  • Page 2
    ... review Who we are ING at a glance Chairman's statement Shareholder information 2 4 5 Our performance Strategy Financial review Risk review Insurance Europe Insurance Americas Insurance Asia/Pacific 6 9 12 14 16 18 Wholesale Banking Retail Banking ING Direct Asset management Our people Corporate...

  • Page 3
    ... ING from direct impact of credit market turmoil > Robust commercial growth: insurance new business up 38% and continued growth in bank volumes > Strong capital position with efficient capital allocation > Sharpened strategic focus on banking, investments, life insurance and retirement services...

  • Page 4
    ...solid business capabilities, ING's strategic focus is on banking, investments, life insurance and retirement services. We want to provide retail customers with the products they need during their lives to grow savings, manage investments and prepare for retirement with confidence. We will build and...

  • Page 5
    ... retail banking activities for customers in Australia, Canada, France, Germany and Austria, Italy, Spain, the United Kingdom and the United States. The main products offered are savings accounts and mortgages, and increasingly also mutual funds and payment accounts. 6% ING Group Annual Review 2007

  • Page 6
    ... in times of stress. We enjoyed strong performance on the commercial front. Our banking businesses continued to show solid volume growth and ING Direct passed the 20 million customer mark, a big achievement after only ten years of operation. And we achieved strong sales growth in our life insurance...

  • Page 7
    ...customer preferences and building on our solid business capabilities, we have decided to sharpen our strategic focus to banking, investments, life insurance and retirement services. We want to provide retail customers with the products they need during their lives to grow savings, manage investments...

  • Page 8
    ... building bank distribution platforms. • To invest increasingly in high-growth markets. Active portfolio management • Oyak Bank (Turkey) 100% share purchase. • Pension businesses (Latin America). • TMB (Thailand) 30% stake. • Full ownership Landmark (South Korea). • Divestment non-core...

  • Page 9
    ...markets. • Growth is driven by investment products and customers want strong performance to meet their financial goals. Consumer financial life cycle Personal equity Life insurance Pension contributions Unit-linked investments Mutual funds Mortgages Savings accounts Current accounts Retirement...

  • Page 10
    ... with our first-ever global branding campaign, proved very successful. As a result, ING's brand awareness has increased significantly across the globe. Our sponsorship is also generating many fruitful business leads and significant new business. POSITIONAL IMAGE ING Group Annual Review 2007

  • Page 11
    ... business and of 2.1% in new sales (annual premium equivalent 'APE'). ING Direct attracted almost 2.8 million new customers in 2007. Residential mortgages grew from EUR 69 billion, end of 2006, to EUR 97 billion, end of 2007. I Banking: loans and advances to customers in EUR billion Financially...

  • Page 12
    ... and special items) grew by 5.9%. Attractive increase in dividend At the annual General Meeting of Shareholders on 22 April 2008, ING will propose a total dividend for 2007 of EUR 1.48 per (depositary receipt for an) ordinary share, up from EUR 1.32 in 2006. Taking into account the interim dividend...

  • Page 13
    ... business lines 2007 underlying profit before tax in percentages Insurance Europe Insurance Americas Insurance Asia/Pacific Wholesale Banking Retail Banking ING Direct Total 19 22 6 25 22 6 100 business, notably at ING Direct, ING Real Estate and Retail Banking activities in developing markets...

  • Page 14
    ... terms of credit losses and decreases in fair values relating to ING Group's investment and trading portfolios. Our exposure to these pressurised asset classes has been limited and is of high quality. The direct negative P&L impact on ING as a result of exposures in US subprime Residential Mortgage...

  • Page 15
    ... Dashboard' (see business case above), a new risk management tool that gives an overview of risk in all bank and insurance businesses, enabling the Executive Board to take strategic decisions using comparable risk measures, and to maximise efficient capital allocation. ING Group Annual Review 2007

  • Page 16
    ... special items. Insurance Europe showed a solid financial performance in 2007, improving efficiency and optimising distribution channels in the Benelux, accelerating growth in Central Europe, and reinforcing ING's position across Europe as a specialist provider of investment and retirement services...

  • Page 17
    ... now sells insurance products exclusively through retail bank channels ING Bank and Record Bank. Growth in Central Europe Sustained high economic growth, low life insurance penetration and favourable demographics make Central Europe a growth market for life insurance and pensions. Building on first...

  • Page 18
    ... very popular with investors and financial advisers. Tom McInerney Our main success story of 2007 has probably been the progress of our investments, life insurance and retirement services businesses. In Latin America, the acquisition of pension businesses was a real ING Group Annual Review 2007

  • Page 19
    ... led to a surge in annuity sales in 2007. "I love the ï¬,exibility," says client Betty Louie about the withdrawal benefit. "The online tool ING offers to look up my statement is so easy to use". Underlying profit before tax in percentages Insurance Americas Rest 22% 78% Geographical breakdown...

  • Page 20
    ... tax was up 18.7%. The value of new business (VNB) went up by 5% to EUR 442 million, driven mainly by higher sales in Taiwan and Australia. Investments in the high-growth markets of China, India and Thailand continued. ING is the region's second-largest international life insurer, based on annual...

  • Page 21
    ... towards investment-oriented life insurance products, 2007 saw ING launch a new SPVA product in Japan. And in New Zealand, our KiwiSaver pension product captured a leading market share of a new government-initiated voluntary retirement savings plan. Improving efficiency, raising awareness Building...

  • Page 22
    ... recorded in General Lending and Payments and Cash Management, Leasing and Factoring, and ING Real Estate. Lower profits from Structured Finance and Financial Markets were related to turmoil in the financial markets. The underlying risk-adjusted return on capital (RAROC) after tax stayed almost...

  • Page 23
    ... across product areas and client groups, including a new strategy to target emerging markets. And as the world's largest real estate investment company, ING continued to experience solid growth in 2007 thanks to our well-diversified portfolio. Landmark deals Wholesale Banking completed a number of...

  • Page 24
    ...-7.9% * Total profit before tax is defined as profit before tax including divestments and special items. Retail Banking performed well in 2007, particularly in the key product areas of mortgages and savings. Important steps were taken to improve efficiency and drive growth, and we continued to...

  • Page 25
    ...The Lion Account fits perfectly within ING Belgium's new strategy of 'direct when possible, advice when needed'. Underlying profit before tax in percentages Retail Banking Rest 22% 78% regulatory approval to open 56 new branches and install 100 off-site cash machines, and its internet customer...

  • Page 26
    ...'s online brokerage business, adding 744,000 customers and USD 2 billion assets under management; and in Germany a mortgage portfolio of EUR .9 billion from Hypo Real Estate Bank AG. ING Direct Rest 6% 94% Number of clients in thousands 2007 2006 Canada Spain Australia France United States...

  • Page 27
    ... service (see business case). In Spain and the US, we accelerated growth in payment accounts, which we reintroduced to Germany, while extending our retail investment product range with the introduction of guaranteed investment products in France and the UK. Developments in the UK ING Direct UK...

  • Page 28
    ...a core competency of ING and consists of three key businesses: ING Investment Management, ING Real Estate and ING Private Banking. Assets under management by business line in EUR million A Insurance Europe Insurance Americas Insurance Asia/Pacific Wholesale Banking Retail Banking ING Direct Total...

  • Page 29
    ... value-added and opportunistic investment strategies. Performance and customer service remained a central theme. A strong track-record of out-performance continued and 11 new real estate funds were launched. In terms of real estate lending it was a strong year, with our loan portfolio expanding...

  • Page 30
    ... their websites. The global employer brand was rolled out across the business lines and by year-end had been successfully activated in 18 countries. Both the number of people applying to ING and the number of people viewing ING careers web pages increased in 2007. While in Europe in particular, but...

  • Page 31
    ... products and services. In 2007, these included new offerings from ING Car Lease, ING Real Estate, ING Investment Management and other business units that recognise that sustainability can generate new business. As a global provider of financial products and services, we realise ING has a direct...

  • Page 32
    ... - Short-term incentive (STI) in cash, which compensates for past performance measured over one year. - Long-term incentive (LTI) in stock options and/or performance shares, which compensates for performance measured over multiple years and is forward-looking. Base salary 2007 The base salary of the...

  • Page 33
    ... 2007 long-term incentive (LTI) was set at 100% of base salary for each Executive Board member. As the STI performance outcome over 2007 was 136%, the resulting LTI award is 118% of target. The number of options and performance shares is determined based on a reference price set at the end of 2007...

  • Page 34
    ...receipts for) preference shares are listed on Euronext Amsterdam by NYSE Euronext. Contact information ING Group Investor Relations (IH 07.430) P.O. Box 810 1000 AV Amsterdam The Netherlands Telephone: +31 20 5415460 Fax: +31 20 5418551 Email: [email protected] ING Group Annual Review 2007

  • Page 35
    ... Dutch and English; - Annual Report on Form 20-F, in English (in accordance with SEC guidelines). The publications can be ordered on the internet: www.ing.com, 'Publications' button, by fax: +31 411 652 125, or by mail: P.O. Box 258, 5280 AG Boxtel, the Netherlands. This 2007 Annual Review is based...

  • Page 36
    ... The Netherlands Telephone: +31 20 5415411 Fax: +31 20 5415444 Internet: www.ing.com www.ing.mobi Commercial Register of Amsterdam, no. 33231073 The trademark of the Forest Stewardship Council (FSC) indicates that the wood used to make this review comes from a forest that is well-managed according...