ING Direct 2008 Annual Report Download - page 235

ING Group
ING Group reports to the Dutch Central Bank as required under the Dutch implementation of the financial conglomerates directive. The
directive mainly covers risk concentrations in the group, intra-group transactions and an assessment of the capital adequacy of the Group.
In terms of measuring the capital adequacy of the Group, ING prefers to use the AFR/EC framework described earlier, particularly as there
continues to be significant differences in the sectoral capital rules between banks and insurance companies and amongst insurance
companies in different countries.
In the following table, we show the Group’s capital adequacy on the following basis:
Insurance required capital from applying European Solvency I rules to all of ING Insurance entities globally (regardless of local •
capital requirements);
Bank required capital based on applying Basel II with the Basel I floor;•
Group available capital using an approach similar to that used for Bank BIS capital whereby IFRS equity is adjusted for certain •
revaluation reserves, minority interests are added, goodwill and certain intangibles are deducted and Group hybrids and qualifying
subordinated debt of Bank and Insurance are included.
Regulatory required capital ING Group
2008 2007
Shareholders’ equity (parent) 17,334 37,20 8
Core Tier-1 securities 10,000
Excluding: Revaluation reserves (1) 10,044 1,457
Group hybrid capital 11,655 8,620
Goodwill and intangibles deductible from Tier-1 –3,275 –2,420
Minorities 1,593 2,323
Capital base ING Group 47,351 47,18 8
Subordinated loans ING Bank N.V. (included in Tier-2) 11,879 11,15 4
Subordinated loans ING Verzekeringen N.V. 2,250 2,250
Capital base including subordinated loans 61,480 60,592
Required capital banking operations (2) 34,369 32,218
Required capital insurance operations 8,582 9,405
Total required capital 42,951 41,623
Surplus capital 18,529 18,969
Group capital ratio 143% 146%
(1) Revaluation reserves debt securities, crediting to life policyholders and cashflow hedge (see Capital base table).
(2) EUR 30,550 million at 1/1/2009.
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ING Group Annual Report 2008