ING Direct 2009 Annual Report Download - page 214

ING Bank
Credit quality: ING Bank portfolio, outstandings
2009 2008
Neither past due nor impaired 790,377 817,0 69
Past due but not impaired (1-90 days) (1) 7,404 7,224
Impaired 11,983 8,592
809,764 832,885
(1) Based on lending (consumer loans and residential mortgages only).
Aging analysis (past due but not impaired): ING Bank portfolio, outstandings (1)(2)
2009 2008
Past due for 1-30 days 5,967 5,844
Past due for 31-60 days 1,281 1,223
Past due for 61-90 days 156 157
7,404 7,224
(1)
Based on lending (consumer loans and residential mortgages only).
(2) The amount of past due but not impaired financial assets in respect of non-lending activities was not material.
There is no significant concentration of a particular type of loan structure in the past due or the impaired loan portfolio.
ING tracks past due but not impaired loans most closely for the consumer loan and residential mortgage portfolios. Generally, all loans
with past due financial obligations of more than 90 days are automatically reclassified as impaired. For the wholesale lending portfolios
and securities obligations, there are generally reasons for declaring a loan impaired prior to being 90 days past due. These include, but are
not limited to, ING’s assessment of the customer’s perceived inability to meet its financial obligations, or the customer filing for bankruptcy
or bankruptcy protection. In some cases, a material breach of financial covenants will also trigger a reclassification of a loan to the
impaired category.
Repossession policy
It is ING’s general policy not to take possession of assets of defaulted debtors. Rather, ING attempts to sell the assets from within the legal
entity that has pledged these assets to ING, in accordance with the respective collateral or pledge agreements signed with the obligors. In
those cases where ING does take possession of the collateral, ING generally attempts to sell the assets as quickly as possible to prospective
buyers. Based on internal assessments to determine the highest and quickest return for ING, the sale of repossessed assets could be the
sale of the obligor’s business as a whole (or at least all of its assets), or the assets could be sold piecemeal.
Impaired Loans: ING Bank portfolio, outstandings by economic sector
2009 2008
Private Individuals 4,589 3,718
Real Estate 1,528 1,094
General Industries 933 1,036
Food, Beverages & Personal Care 681 397
Builders & Contractors 628 676
Services 611 270
Media 583 135
Transportation & Logistics 415 146
Other 2,015 1,120
Total 11,983 8,592
The table above represents the economic sector breakdown of credit risk outstandings (including impaired amounts) for loans and
positions that have been classified as problem loans and for which provisions have been made. Against this portfolio, ING holds specific
and collective provisions of EUR 2,115 million and EUR 1,246 million, respectively (2008 EUR 1,067 million and EUR 799 million
respectively), representing the difference between the amortised cost of the portfolio and the estimated recoverable amount discounted
at the effective rate of interest. In addition, there is EUR 1,005 million in provisions against the performing portfolio.
Provisions
The credit portfolio is under constant review. A formal analysis takes place quarterly to determine the provisions for possible bad debts, using
a bottom-up approach. Conclusions are discussed by the ING Provisioning Committee (IPC), which advises the Executive Board on specific
provisioning levels. ING Bank identifies as impaired loans those loans for which it is probable, based on current information and events that
the principal and interest amounts contractually due will not be collected in accordance with the contractual terms of the loan agreements.
Risk management (continued)
2.1 Consolidated annual accounts
ING Group Annual Report 2009
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