ING Direct 2008 Annual Report Download - page 128

2.1 Consolidated annual accounts
Moreover, ING Groep N.V.’s ability to pay dividends is dependent on the dividend payment ability of its subsidiaries. ING Groep N.V. is
legally required to create a non-distributable reserve insofar profits of its subsidiaries are subject to dividend payment restrictions which
apply to those subsidiaries themselves. Such restrictions may among others be of a similar nature as the restrictions which apply to ING
Groep N.V. or may be the result of minimum capital requirements that are imposed by industry regulators in the countries in which the
subsidiaries operate, or other limitations which may exist in certain countries.
Without prejudice to the fact that the cumulative preference shares, when issued, will be junior securities of ING Groep N.V., no specific
dividend payment restrictions with respect to the cumulative preference shares exist.
Furthermore, ING Groep N.V. is subject to legal restrictions with respect to repayment of capital to holders of cumulative preference
shares. Capital may be repaid to the holders of cumulative preference shares pursuant to (i) an amendment of ING Groep N.V.’s articles
of association whereby the cumulative preference shares are written down or (ii) a resolution to redeem and cancel the cumulative
preference shares.
Pursuant to the Dutch Civil Code, capital may only be repaid if none of ING Groep N.V.’s creditors opposes such a repayment within
two months following the announcement of a resolution to that effect.
14 SUBORDINATED LOANS
Subordinated loans
Interest rate Year of Issue Due date
Notional amount
in original
currency Balance sheet value
2008 2007
9.000% 2008 Perpetual EUR 10 10
8.500% 2008 Perpetual USD 2,000 1,393
8.000% 2008 Perpetual EUR 1,500 1,474
7.375% 2007 Perpetual USD 1,500 1,048 988
6.375% 2007 Perpetual USD 1,045 731 690
5.14 0% 2006 Perpetual GBP 600 623 810
5.775% 2005 Perpetual USD 1,000 711 674
6.125% 2005 Perpetual USD 700 487 462
4.176% 2005 Perpetual EUR 500 497 497
Variable 2004 Perpetual EUR 1,000 939 937
6.200% 2003 Perpetual USD 500 348 330
Variable 2003 Perpetual EUR 750 684 682
7.200% 2002 Perpetual USD 1,10 0 773 726
7.050% 2002 Perpetual USD 800 563 529
10,281 7,325
Subordinated loans consist of perpetual subordinated bonds issued by ING Groep N.V. These bonds have been issued to raise hybrid
capital for ING Verzekeringen N.V. and Tier-1 capital for ING Bank N.V. Under IFRS-EU these bonds are classified as liabilities. They are
considered capital for regulatory purposes.
Except for the 9% 2008 perpetual of EUR 10 million (a private placement), these loans have been subsequently provided as subordinated
loans by ING Groep N.V. to ING Verzekeringen N.V. and ING Bank N.V. under the same conditions as the original bonds as follows:
Subordinated loans provided by ING Groep N.V. to ING Bank N.V. and ING Verzekeringen N.V.
2008 2007
ING Bank N.V. 5,800 5,166
ING Verzekeringen N.V. 4,471 2,159
10,271 7,325
The number of subordinated loans held by group companies as at 31 December 2008 was 32,759 with a balance sheet value of
EUR 1 million (2007: 35,040 with a balance sheet value of nil).
Notes to the consolidated balance sheet of ING Group (continued)
ING Group Annual Report 2008
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