ING Direct 2002 Annual Report Download - page 26

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Annual Report 2002 · ING Group 23
Financial highlights
acquisitions in the US and a EUR 79 million gain
from the surrender of a large group life
insurance contract in the Netherlands. The gross
result before taxation of the insurance operations
– i.e. before investment losses – increased by
27.8% to EUR 4,726 million. Gross investment
losses on fixed income securities of the insurance
operations were EUR 630 million – equalling
48 basis points of the total fixed-income
investment portfolio – against EUR 376 million a
year ago.
Operational net profit of the banking
operations decreased by 37.9% to EUR 895
million. The decrease was caused by sharply
higher risk costs. The gross result before
taxation from banking – i.e. before risk costs –
decreased slightly by 0.6% to EUR 2,903 million.
The strong increase in the interest result
compensated the big drop in other income. Total
operating expenses – including the restructuring
provision for international wholesale banking of
EUR 128 million and the expense growth of ING
Direct – were slightly higher. Risk costs were
strongly higher throughout the year but
especially in the fourth quarter. In the fourth
quarter a provision was created regarding a
potential loss on National Century Financial
Enterprises in the US. Total loan loss provisioning
in 2002 was EUR 1,435 million, equal to 59 basis
points of average credit-risk weighted assets
compared to EUR 750 million (33 basis points) a
year ago.
Operational realised capital gains
As planned, ING realised net capital gains on
equity investments of the insurance operations
of EUR 820 million (+15.0%). Net realised capital
gains on real estate were EUR 220 million
compared to EUR 147 million (+49.7%) in 2001.
At year-end 2002, the revaluation reserve of
equity investments of the insurance operations
was EUR 0.8 billion.
Starting in 2003, ING will realise capital
gains on equities depending on market
opportunities, thereby ending its policy of
increasing these gains at a fixed and
predetermined pace.
GEOGRAPHICAL DISTRIBUTION
OF BANK LENDING
in billions of euros
144.0
52.8
56.5
15.3
1.8
8.0
5.9
0.1
284.4
The Netherlands 51%
Belgium 18%
Rest of Europe 20%
North America 5%
South America 1%
Asia 3%
Australia 2%
Other
Total
  

The members of the Executive
Board, posing in the
auditorium in the nose of
ING House.
From left to right:
Cees Maas (CFO) ,
Hessel Lindenbergh,
Ewald Kist (Chairman),
Alexander Rinnooy Kan,
Michel Tilmant (Vice-Chairman),
Fred Hubbell.