ING Direct 2008 Annual Report Download - page 112

2.1 Consolidated annual accounts
As of the reclassification date, the (weighted average) effective interest rates on reclassified assets were in the range from 4.10% to
20.95% and expected recoverable cash flows were EUR 1,646 million. Unrealised fair value losses recognised in shareholders’ equity
amounted to EUR 69 million. This amount will be released from equity and amortised to the profit and loss account over the remaining
life of the assets on an effective interest rate basis. From 1 January 2008 until the reclassification date EUR 79 million of unrealised fair
value losses were recognised in shareholders’ equity, no impairment was recognised.
As at 31 December 2008, the carrying value in the balance sheet and the fair value of the reclassified financial assets amounted to
EUR 1,565 million and EUR 1,592 million respectively.
If the reclassification had not been made, profit before tax would have been unchanged and shareholders’ equity would have been
EUR 28 million lower due to unrealised fair value losses.
After the reclassification, the reclassified financial assets contributed EUR 9.2 million to income before tax for the period ended
31 December 2008, which fully consisted of Interest income. No provision for credit losses was recognised.
In the year ended 31 December 2007, no impairment on reclassified financial assets available for sale was recognised. Unrealised fair
value losses of EUR 20 million were recognised directly in shareholders’ equity.
In 2007 the reclassification from Available-for-sale debt securities to Financial assets designated as at fair value through profit and loss
relates to debt securities backing insurance contracts where current market assumptions were implemented in the measurement of the
insurance contracts.
On 12 January 2009 ING Group reclassified certain European RMBS, ABS, CMBS and covered bonds for which it has an intention to hold
for foreseeable future from Available-for-sale investments to Loans and advances. The fair value of the assets as of the reclassification
date amounted to EUR 22.8 billion. The negative revaluation reserve in equity as of the reclassification date amounted to approximately
EUR 0.9 billion (after tax). This reclassification is recognised in 2009.
Available-for-sale equity securities by insurance and banking operations
2008
Listed
2007 2008
Unlisted
2007 2008
Total
2007
Insurance operations 5,083 14,082 1,876 2,240 6,959 16,322
Banking operations 1,418 3,309 445 316 1,863 3,625
6,501 17,391 2,321 2,556 8,822 19,947
Debt securities by insurance and banking operations
2008
Available-for-sale
2007 2008
Held-to-maturity
2007 2008
Total
2007
Insurance operations 102,528 115,9 4 4 102,528 115,9 4 4
Banking operations 131,502 140,006 15,440 16,753 146,942 156,759
234,030 255,950 15,440 16,753 249,470 272,703
As at 31 December 2008, the balance sheet value included equity securities which were lent or sold in repurchase transactions
amounting to EUR 182 million (2007: EUR 13 million) and nil (2007: nil), respectively, and debt securities which were lent
or sold in repurchase transactions amounting to EUR 9,822 million (2007: EUR 4,114 million) and EUR 35,795 million (2007:
EUR 38,214 million), respectively.
Borrowed equity securities and convertible bonds are not recognised in the balance sheet and amounted to nil as at 31 December 2008
(2007: nil).
Borrowed debt securities are not recognised in the balance sheet and amounted to EUR 166 million as at 31 December 2008
(2007: EUR 170 million).
Investments in connection with the insurance operations with a combined carrying value of EUR 47 million (2007: EUR 69 million)
were non-income-producing for the year ended 31 December 2008.
Notes to the consolidated balance sheet of ING Group (continued)
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