ING Direct 2009 Annual Report Download - page 17

Strategy
Key points
> Full separation of banking and insurance;
to be completed by the end of 2013
> Build future on sustainable profit,
based on our sound business ethics, good
corporate citizenship and customer trust
> Create a leading international retail, direct
and commercial bank
> Insurance activities very well-positioned
to capitalise on socio-economic trends
2009 marked the beginning of a new era for ING. After initiating
our Back to Basics programme, we set a clear course for the future
by moving towards a full separation of our banking and insurance/
investment management operations. This decisive step will turn us
into a simpler and more agile organisation and enabled us to meet
the restructuring requirements of the European Commission.
This was needed due to the transactions with the Dutch State in
October 2008 and January 2009. In addition, in December 2009,
we started repaying the Dutch State.
Our ambition is to become a leading international retail, direct
and commercial bank, while creating a bright future for our
insurance operations. We will focus on superior customer
satisfaction, a strong financial performance, leading operating
efficiency and a solid capital position. We want to build our future
on sustainable profit based on sound business ethics and respect
for our stakeholders. We aim to be a good corporate citizen and
earn our customers’ trust by delivering financial products and
services in the way they want them delivered: with exemplary
service and convenience provided at attractive prices.
SEPARATING BANKING AND INSURANCE
In October 2009, ING announced a clear course for the future.
The Group is moving towards separation of its banking and its
insurance operations. Thereby, we are taking the operational
separation of the Bank and the Insurer/Investment Manager, that
was initiated within the scope of the Back to Basics programme
launched in April 2009, one step further (for more information
about Back to Basics please refer to the section ‘ING and the
financial environment’). The decision to separate is the right
decision at the right time and was taken for the following reasons:
Due to our rapid growth in recent years, managing the Group •
was becoming increasingly complex, as Banking and Insurance
(including investment management) not only have different
drivers in their business models, but they also face different
challenges in managing and pricing risk as well as in managing
balance sheet exposures and capital needs.
In the past, especially in a benign economic environment, we •
enjoyed a material capital benefit, as our diversification allowed
us to utilise double leverage at our holding company. However,
under less favourable market circumstances, this element of
ING’s capital structure has appeared to be less beneficial.
There is insufficient geographic overlap of insurance •
manufacturing capabilities with bank distribution capabilities.
Hence, banks today do not need to manufacture in-house,
the insurance products they distribute.
Finally, we are seeing an increased demand for greater •
simplicity, reliability and transparency.
In addition to these reasons, we also wanted to reach a timely
resolution in the discussions with the European Commission (EC)
about the support received from the Dutch State. Expediting the
decision to separate our banking and insurance operations enabled
us to meet EC demands to reduce our overall balance sheet, while
maintaining as much as possible the strategic integrity of both parts
of the business. For all these reasons, ING believes that the future
of the Group will be best served by separating its banking and
insurance operations. We will explore all options, including public
offerings, sales or combinations thereof, taking into consideration
all options to balance the interests of all stakeholders.
A clear course for the future
ING Group Annual Report 2009 15