ING Direct 2008 Annual Report Download - page 146

ING Group Annual Report 2008
144
2.1 Consolidated annual accounts
Additional information to the consolidated balance sheet of ING Group (continued)
25 ASSETS NOT FREELY DISPOSABLE
The assets not freely disposable consist primarily of interest bearing securities pledged to secure deposits from De Nederlandsche Bank
(the Dutch central bank) and other banks and serve to secure margin accounts or are used for other purposes required by law. The assets
not freely disposable and the items for which they are held are as follows:
Assets not freely disposable
2008 2007
Investments 6,521 5,807
Loans and advances to customers 3,136 911
Banks 6,889 1,602
Other assets 5,677 4,609
22,223 12,929
Banks includes Amounts due from banks and balances with central banks. ING Bank N.V. has an obligation to maintain a reserve with
an average monthly balance with the Dutch central bank. In December 2008 the required monthly average was EUR 5,810 million
(2007: EUR 5,676 million). As at 31 December 2008 the balance on this reserve was EUR 3,529 million (2007: EUR 1,375 million).
There are no material terms and conditions relating to the collateral represented in the above table which are individually significant.
26 CONTINGENT LIABILITIES AND COMMITMENTS
In the normal course of business the Group is a party to activities whose risks are not reflected in whole or part in the consolidated
financial statements. In response to the needs of its customers, the Group offers financial products related to loans. These products
include traditional off-balance sheet credit-related financial instruments.
Contingent liabilities and commitments
2008 2007
Insurance operations
Commitments 4,221 4,477
Guarantees 2,460 173
6,681 4,650
Banking operations
Contingent liabilities in respect of
– discounted bills 11
– guarantees 22,391 19,018
– irrevocable letters of credit 10,458 11,551
– other 453 350
33,303 30,920
Irrevocable facilities 89,081 100,707
129,065 136,277
Guarantees relate both to credit and non-credit substitute guarantees. Credit substitute guarantees are guarantees given by ING Group
in respect of credit granted to customers by a third party. Many of them are expected to expire without being drawn on and therefore
do not necessarily represent future cash outflows. The guarantees are generally of a short-term nature. In addition to the items included
in contingent liabilities, ING Group has issued guarantees as a participant in collective arrangements of national industry bodies and as a
participant in government required collective guarantee schemes which apply in different countries.
Irrevocable letters of credit mainly secure payments to third parties for a customer’s foreign and domestic trade transactions in order to
finance a shipment of goods. ING Group’s credit risk in these transactions is limited since these transactions are collateralised by the
commodity shipped and are of a short duration.
Other contingent liabilities include acceptances of bills and are of a short-term nature. Other contingent liabilities also include contingent
liabilities resulting from the normal operations of the Real Estate business including obligations under development and construction
contracts. None of the items included in Other contingent liabilities are individually significant.