ING Direct 2011 Annual Report Download - page 283

Capital management continued
REGULATORY REQUIREMENTS
ING BANK
Capital adequacy and the use of regulatory required capital are based on the guidelines developed by the Basel Committee on Banking
Supervision (The Basel Committee) and the European Union Directives, as implemented by the Dutch Central Bank (DNB) for supervisory
purposes. The minimum Tier 1 ratio is 4% and the minimum total capital ratio (known as the BIS ratio) is 8% of all risk-weighted assets.
Basel II
As of 2008 ING Bank publishes risk-weighted assets (RWA), Tier 1 and BIS capital and the accompanying capital ratios based on Basel II
data only. In addition, ING publishes the minimum required capital level according to Basel II and according to the Basel I floor. As of 2009
the Basel I floor is based on 80% of Basel I RWA. The minimum requirements according to Basel II and Basel I are both compared to total
BIS available capital according to Basel II.
EBA capital exercise
An additional capital exercise was proposed by the EBA and agreed by the Council on 26 October 2011. This exercise required banks to
strengthen their capital positions by building up a temporary capital buffer against sovereign debt exposures to reflect current market
prices. In addition, it required them to establish a buffer such that the Core Tier 1 capital ratio reaches a level of 9% by the end of June
2012. ING Bank already meets the 9% Core Tier 1 ratio after the removal of the prudential filters on sovereign assets in the Available-for-
Sale portfolio and prudent valuation of sovereign debt in the Held-to-Maturity and Loans and receivables portfolios, reflecting current
market prices.
Capital position of ING Bank
2011 2010
Shareholders’ equity (parent) 34,367 34,452
Minority interests (1) 817 748
Subordinated loans qualifying as Tier 1 capital (2) 6,850 8,438
Goodwill and intangibles deductible from Tier 1 (1) –1,390 –1,645
Deductions Tier 1 –1,014 –1,069
Revaluation reserve (3) –1,008 –1,592
Available capital – Tier 1 38,622 39,332
Supplementary capital – Tier 2 (4) 9,516 10,882
Deductions –1,014 –1,069
BIS capital 47,124 49,145
Risk-weighted assets 330,421 321,103
Core Tier 1 ratio 9.62% 9.62%
Tier 1 ratio 11.69% 12.25%
BIS ratio 14.26% 15.30%
Required capital based on Basel I floor (5) 31,107 29,860
BIS ratio based on Basel I floor (5) 12.12% 13.17%
(1) According to the regulatory definition.
(2) Subordinated loans qualifying as Tier 1 capital have been placed by ING Groep N.V. with ING Bank N.V.
(3) Includes revaluation debt securities, revaluation reserve cash flow hedge and revaluation reserves equity and real estate
(see ING’s Capital base table, footnote 5).
(4) Includes eligible lower Tier 2 loans and revaluation reserves equity and real estate revaluations removed from Tier 1 capital.
(5) Using 80% of Basel I Risk-Weighted Assets.
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
281ING Group Annual Report 2011