ING Direct 2009 Annual Report Download - page 273

Illiquid Assets Back-up Facility to us and has resulted in a one-time, pre-tax charge of EUR 1.3 billion recorded in the fourth quarter of 2009
which has adversely affected our results of operations and financial condition.
In January 2010 we filed an appeal with the general court of the European Union against specific elements of the EC’s decision regarding
the Restructuring Plan. Although we believe in the merit of appeal, there can be no assurance as to its success or as to any consequences
resulting from its rejection.
In connection with the Restructuring Plan, we have also agreed to not be a price leader in certain EU markets with respect to certain retail,
private and direct banking products and to refrain from acquisitions of financial institutions and of businesses that would delay our
repurchase of the Core Tier 1 Securities not purchased with the proceeds of the Offering. Those limitations may last until 18 November
2012 and could adversely affect our ability to maintain or grow market share in key markets as well as our results of operations. See ‘Risks
Related to the Group - The limitations agreed with the EC on our ability to compete and to make acquisitions or call certain debt
instruments could materially impact the Group’.
We have announced that we will consider making our required divestments by means of initial public offerings, sales, spin-offs,
combinations of the foregoing or other means. There can be no assurance that we will be able to implement the Restructuring Plan
successfully or complete the announced divestments on favorable terms or at all, particularly in light of both the plan’s 2013 deadline and
expected challenging market conditions in which other financial institutions may place similar assets for sale during the same time period
and may seek to dispose of assets in the same manner. Any failure to successfully implement the Restructuring Plan may result in EC
enforcement actions and may have a material adverse impact on the assets, profitability, capital adequacy and business operations of the
Group. Moreover, in connection with the implementation of the Restructuring Plan, including any proposed divestments, we or potential
buyers may need to obtain various approvals, including of shareholders, works councils and regulatory and competition authorities, and
we and potential buyers may face difficulties in obtaining these approvals in a timely manner or at all. In addition, the implementation of
the Restructuring Plan may strain relations with our employees, and specific proposals in connection with the implementation may be
opposed by labor unions or works councils. Furthermore, following the announcement of the Restructuring Plan, several of our subsidiaries
have been downgraded or put on credit watch by rating agencies. See ‘Risks Related to the Group - Ratings are important to our business
for a number of reasons. Among these are the issuance of debt, the sale of certain products and the risk weighting of bank and insurance
assets. Downgrades could have an adverse impact on our operations and net results’.
Other factors that may impede our ability to implement the Restructuring Plan successfully include an inability of prospective purchasers to
obtain funding due to the deterioration of the credit markets, insufficient access to equity capital markets, a general unwillingness of
prospective purchasers to commit capital in the current market environment, antitrust concerns, any adverse changes in market interest
rates or other borrowing costs and any declines in the value of the assets to be divested. Although equity capital markets have improved
over the past few months, it may also be difficult to divest all or part of our insurance or investment management business through one or
more initial public offerings. There can also be no assurance that we could obtain favorable pricing for a sale of all or part of our insurance
or investment management business in the public markets or succeed in turning the relevant subsidiaries into viable standalone businesses.
A divestment may also release less regulatory capital than we would otherwise expect. Any failure to complete the divestments on
favorable terms, whether by sale, through an initial public offering, a spin-off or otherwise, could have a material adverse impact on our
assets, profitability, capital adequacy and business operations. If we are unable to complete the announced divestments in a timely
manner, we would be required to find alternative ways to reduce our leverage, and we could be subject to enforcement actions or
proceedings by the EC. In particular, if we do not succeed in completing divestitures contemplated by the Restructuring Plan within the
timelines set out therein, the EC may request the Dutch State to appoint a divestiture trustee with a mandate to complete the relevant
divestiture with no minimum price.
In addition, it is possible that a third party will challenge the EC decision to approve the Restructuring Plan in the European Courts. ING
does not believe that any such challenge would be likely to succeed, but if it were to succeed the EC would need to reconsider its decision
which may have an adverse impact on our results of operations and financial condition.
The implementation of the divestments announced in connection with the Restructuring Plan, including the separation of the insurance
and most of the investment management operations from the banking operations, will also give rise to additional costs related to the legal
and financial assessment of potential transactions. The implementation may also result in increased operating and administrative costs. The
process of completing the steps contemplated by the Restructuring Plan may be disruptive to our business and the businesses we are
trying to sell and may cause an interruption or reduction of our business and the businesses to be sold as a result of, among other factors,
the loss of key employees or customers and the diversion of management’s attention from our day-to-day business as a result of the need
to manage the divestment process as well as any disruptions or difficulties that arise during the course of the divestment process. We may
face other difficulties in implementing the Restructuring Plan and completing the planned divestments. For instance, the divestments,
individually or in the aggregate, may trigger provisions in various contractual obligations, including debt instruments, which could require
us to modify, restructure or refinance the related obligations. We may not be able to effect any such restructuring or refinancing on similar
terms as the current contractual obligations or at all. In addition, the announced divestments could be the subject of challenges or
litigation, and a court could delay any of the divestment transactions or prohibit them from occurring on their proposed terms, or from
occurring at all, which could adversely affect our ability to use the funds of the divestments to repurchase the Core Tier 1 Securities,
ING Group Annual Report 2009 271
2.4 Additional information
Risk factors (continued)