ING Direct 2002 Annual Report Download - page 30

Download and view the complete annual report

Please find page 30 of the 2002 ING Direct annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 97

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97

Annual Report 2002 · ING Group 27
Group Strategy & Outlook
They are making a significant contribution to
profit. ING gradually aims to extend both the
product range (insurance, banking, asset manage-
ment) and distribution channels (click, call,
face). In some markets, such as Australia, Korea,
Taiwan and Hong Kong, the insurance operations
have broadened their operating base through
bancassurance joint ventures with local banks. In
India and China, ING has started insurance
operations in co-operation with local partners.
4. Develop ING’s special skills
With 5 million clients and EUR 55 billion in funds
entrusted at the end of 2002, ING Direct proves to
be a significant value creator. The ING Direct
operations in seven large countries have thus
created substantial value for ING in only a few
years’ time. ING Direct meanwhile also contributes
to profit, with an attractive risk-adjusted return
on capital. Furthermore, the ING Direct client base
offers attractive opportunities for cross-selling.
The same is true for the insurance
operations in developing markets, which are
contributing approximately 20% of the total
insurance result. In the past few years, the total
revenue and the result of these businesses have
shown double-digit growth. Most of the
embedded value from new insurance business is
generated by these operations.
The pension funds in a number of
developing economies are also rapidly increasing
their client base and assets under management.
As a pension specialist, ING currently offers
pension products in 30 countries around the globe
and assists many governments struggling with
the necessary reform of their pension systems.
The pension business also offers attractive
opportunities for cross-selling.
5. Further lower the cost base
In 2002, ING made much progress with lowering
its cost base. The strict cost discipline will be
maintained in the years ahead. Substantial future
cost savings are expected from the rationalisation
of the operations/IT activities. ING will continue
to invest approximately EUR 1.1 billion in the
shared service centres until 2005, while the total
cost savings of integrating these back-office
activities will amount to about EUR 2.7 billion.
This is equal to 5% of total operational expenses.
Extension of global procurement initiatives will
also generate significant cost savings. Out-
sourcing of IT projects to India will be
continued.
Outlook
As from 2003, ING has ended its policy of
realising fixed and predetermined amounts of
capital gains. In view of this and the current
economic and political uncertainties, the
Executive Board will not make a forecast for
ING’s result in 2003. The Executive Board
remains convinced that ING Group has a solid
base in core markets, is well-positioned in
growth markets, will continue to exploit its
many synergy opportunities successfully and is
adequately responding to today’s difficult
market conditions.
 
ING aims to extend both
the product range and
distribution channels
—
Cost savings of integrating
back-offices will amount to
EUR 2.7 billion
—
No forecast for ING’s result
in 2003