ING Direct 2008 Annual Report Download - page 142

ING Group Annual Report 2008
140
2.1 Consolidated annual accounts
Additional information to the consolidated balance sheet of ING Group (continued)
Assets and liabilities by contractual maturity
Less than 1
month
1-3
months
3-12
months
1-5
years
Over 5
years
Maturity
not
applicable Total
2007
ASSETS
Cash and balances with central banks 12,406 12,406
Amounts due from banks 25,939 5,736 8,705 6,591 1,904 48,875
Financial assets at fair value through profit and loss
– trading assets 111,7 71 11,512 15,003 24,061 29,893 973 193,213
– investments for risk of policyholders (1) 114 ,827 114,827
– non-trading derivatives 403 115 758 2,651 3,708 27,637
– designated as at fair value through profit and loss 1,504 610 1,894 1,999 5,043 403 11,453
Investments
– available-for-sale 4,184 7, 016 13,267 71,107 135,992 44,331 275,897
– held-to-maturity 232 287 1,093 8,504 6,637 16,753
Loans and advances to customers 131,610 17, 234 26,654 93,545 280,738 3,183 552,964
Reinsurance contracts 21 36 308 307 2,725 2,477 5,874
Intangible assets 2 4 111 391 1,120 4 ,112 5,740
Deferred acquisition costs 10,692 10,692
Other assets 14,399 2,771 15,838 4,195 2,845 51 40,099
Remaining assets (where maturities are not applicable) (2) 16,080 16,080
Total assets 302,471 45,321 83,631 213,351 470,605 197,131 1,312,510
LIABILITIES
Preference shares 21 21
Subordinated loans 7,325 7,325
Debt securities in issue 22,277 13,899 6,210 14,787 9,822 66,995
Other borrowed funds 434 4,847 916 7,0 59 13,802 27,058
Insurance and investment contracts 1,855 3,907 10,712 33,854 97, 24 4 118,14 0 265,712
Amounts due to banks 117,179 28,758 12,935 6,862 1,238 166,972
Customer deposits and other funds on deposit 463,995 23,988 26,864 8,369 2,000 525,216
Financial liabilities at fair value through profit and loss
– trading liabilities 94,966 8,085 12,963 12,410 20,492 72 148,988
– non-trading derivatives 255 317 521 2,937 2,921 6,951
– designated as at fair value through profit and loss 873 771 2,395 5,912 3,931 13,882
Other liabilities 14,292 4,920 12,067 6,420 2,844 3,316 43,859
Total liabilities 716,126 89,492 85,583 98,610 154,294 128,874 1,272,979
(1) Investments for risk of policyholders are managed on behalf of policyholders on a fair value basis. Although individual instruments may (or may not)
have a maturity depending on their nature, this does not impact the liquidity position of ING.
(2) Included in remaining assets where maturities are not applicable are:
– property and equipment
– real estate investments
– investments in associates.
Note: Due to their nature remaining assets consist mainly of assets expected to be recovered after more than 12 months.
Amounts presented in this table by contractual maturity are on an undiscounted basis, excluding interest receivable/payable.
23 DERIVATIVES AND HEDGE ACCOUNTING
Use of derivatives and hedge accounting
As described in the ‘Risk management’ section, ING Group uses derivatives (principally interest rate swaps and cross currency interest rate
swaps) for economic hedging purposes in the management of its asset and liability portfolios and structural positions. The objective of
economic hedging is to enter into positions with an opposite risk profile to an identified exposure to reduce that exposure. The impact of
ING Group’s hedging activities is to optimise the overall cost to the Group of accessing debt capital markets and to mitigate the market
risk which would otherwise arise from structural imbalances in the duration and other profiles of its assets and liabilities. In addition,
hedging activities are undertaken to hedge against the interest rate risk in the mortgage offer period in relation to retail mortgages and
to lock-in the interest margin in relation to interest bearing assets and the related funding.
The accounting treatment of hedge transactions varies according to the nature of the instrument hedged and whether the hedge
qualifies under the IFRS-EU hedge accounting rules. Derivatives that qualify for hedge accounting under IFRS-EU are classified and
accounted for according to the nature of the instrument hedged and the type of IFRS-EU hedge model that is applicable. The three
models applicable under IFRS-EU are: fair value hedge accounting, cash flow hedge accounting and net investment hedge accounting.
These are described under the relevant headings below. The company’s detailed accounting policies for these three hedge models are set
out in section ‘Principles of valuation and determination of results’.