ING Direct 2007 Annual Report Download - page 11

In 2007, ING results showed resilience in
turbulent markets with limited direct
impact of the credit and liquidity crisis.
Profits were boosted by capital gains on
equities and low risk costs, mitigated by
lower revaluations of real estate and private
equity. ING delivered robust commercial
growth and improved returns. Costs
remained under control while we invested
in new growth opportunities. ING proposes
to increase total dividend by 12% to
EUR 1.48 per share, to be paid fully in cash.
GROUP RESULTS
Total net profit rose by 20.1% to EUR 9,241
million. Underlying net profit, which is
defined as total net profit excluding the
impact of divestments and special items,
rose by 19.4% to EUR 9,172 million,
including the net gain on the sale of stakes
in ABN AMRO and Numico of EUR 2,087
million. Earnings per share (EPS) rose to
EUR 4.32 from EUR 3.57. Underlying profit
before tax rose by 12.4%. The high tax
exempt gains on equity investments
resulted in a reduction in the effective tax
rate from 19.2% in 2006 to 13.9% in 2007.
Robust commercial growth
Although the turmoil in credit markets in
the second half of 2007 made the business
environment even more challenging, our
commercial growth remained robust in
both insurance as well as banking.
The life insurance business in developing
markets showed strong sales, reflected
in a rise of 57.3% in the value of new
business and of 23.1% 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.
Financially it has been a strong
year, with solid profits, a robust
capital position and efficient
capital allocation. To further
strengthen our performance,
we were busy during my first
year as chief financial officer
closely aligning the Finance
function to the business so that
ING will be better positioned
to capture new business
opportunities as they arise.
We’ve also done a great deal
over recent years to improve
our external financial disclosure.
This helps the market and
analysts better understand
and trust us. It was vital, for
example, that we not only
came through the 2007 market
turmoil in good shape, but that
we were able to show the
world how we achieved this.
John Hele
chief financial officer
Banking: loans and advances
to customers
in EUR billion
Insurance: value of new business
in EUR million
9
Financial review
0
2
4
6
8
05
04* 06 07
0
100
200
300
400
500
600
0
2
4
6
8
04 07
05 06
0
200
400
600
800
1,000
1,200
* Opening balance sheet under IFRS, 1 January 2005