ING Direct 2009 Annual Report Download - page 171

European Commission Restructuring Plan
In 2009, ING Groep N.V. submitted a Restructuring Plan to the European Commission as part of the process to receive approval for the
government support measures. The Restructuring Plan has formally been approved by the European Commission. The main elements of
the Restructuring Plan as announced on 26 October 2009 are as follows:
ING will eliminate double leverage and significantly reduce its balance sheet;•
ING will divest all Insurance and Investment Management activities;•
that in order to receive approval from the European Commission ING needs to divest ING Direct USA by the end of 2013;•
ING will create a new company in the Dutch retail market composed of Interadvies (including Westland Utrecht and the mortgage •
activities of Nationale-Nederlanden) and the existing consumer lending portfolio of ING Retail in the Netherlands. This business, once
separated, will be divested;
that ING has agreed not to be a price leader in any EU country for certain retail and SME banking products and will refrain from the •
acquisition of financial institutions or other businesses that would delay the repayment of the non-voting equity securities. These
restrictions will apply for the shorter period of three years or until the non-voting equity securities have been repaid in full to the
Dutch State;
that ING has agreed with the Dutch State to alter the repayment terms of 50% of the non-voting equity securities;•
that EUR 5 billion of the non-voting equity securities issued to the Dutch State in November 2008 will be repurchased;•
that additional Illiquid Assets Back-Up Facility payments as part of the overall agreement with the European Commission are to be made •
to the Dutch State in the form of fee adjustments relating to the Illiquid Assets Back-Up Facility which resulted in a one-off pre-tax
charge to ING of EUR 1.3 billion in the fourth quarter of 2009;
that ING launched a EUR 7.5 billion rights issue, in order to finance the repayment of 50% of the non-voting equity securities and to •
mitigate the capital impact of the additional Illiquid Assets Back-Up Facility payment as part of the overall agreement with the European
Commission to the Dutch State of EUR 1.3 billion; and
ING will execute the Restructuring Plan before the end of 2013.•
On 28 January 2010, ING lodged an appeal against specific elements of the European Commission’s decision.
Credit Guarantee Scheme
As part of the measures adopted to protect the financial sector, the Dutch State introduced a EUR 200 billion credit guarantee scheme for
the issuance of medium term debt instruments by banks (the Credit Guarantee Scheme). ING Bank N.V. issued government guaranteed
debt instruments under this Credit Guarantee Scheme (‘Government Guaranteed Bonds’) as part of its regular medium-term funding
operations. The relevant Rules of the Credit Guarantee Scheme promulgate the rules applicable to any issues under the Credit Guarantee
Scheme and include information such as scope, denomination, tenor and fees payable by the banks. ING Group pays a fee of 84 basis
points over the issued bonds to the Dutch State to participate in the Credit Guarantee Scheme. Reference is made to Note 15 ‘Debt
securities in issue’.
Other
Following the transactions as disclosed in this note, the Dutch State is a related party of ING Group. All other transactions between
ING Group and the Dutch State are of a normal business nature and at arm’s length.
In the framework of the transactions with the Dutch State disclosed in this note, certain arrangements with respect to corporate
governance and executive remuneration were agreed with the Dutch State which will remain in place as long as the Dutch State owns
at least 250 million non-voting equity securities, as long as the Illiquid Assets Back-Up Facility is in place or any of the Government
Guaranteed Bonds is outstanding (whichever expires last). These arrangements entail that:
the Dutch State may recommend two candidates (the ‘State Nominees’) for appointment to the Supervisory Board. Certain decisions of •
the Supervisory Board require approval of the State Supervisory Board members;
ING Group will develop a sustainable remuneration policy for the Executive Board and Senior Management that is aligned to new •
international standards and submit this to its General Meeting for adoption. This remuneration policy shall include incentive schemes
which are linked to long-term value creation, thereby taking account of risk and restricting the potential for ‘rewards for failure’. The
new remuneration policy will, amongst others, include objectives relating to corporate and social responsibility;
members of the Executive Board will not receive any performance-related payment - either in cash, options, shares or bearer depositary •
receipts - for the years 2008, 2009 and subsequent years until the adoption of the new remuneration policy mentioned above;
severance payments to Executive Board members will be limited to a maximum of one year’s fixed salary, in line with the Tabaksblat •
Code;
ING has undertaken to support the growth of the lending to corporates and consumers (including mortgages) for an amount of EUR •
25 billion, on market conforming terms;
ING agreed to pro-actively use EUR 10 billion of the Dutch Guarantee Scheme over 2009;•
ING has committed itself to maintaining the Dutch payment system PIN on its payment debit cards as long as other market participants, •
representing a substantial market share, are still making use of this payment system; and
appointment of the Chief Executive Officer of the Executive Board requires approval of the State Nominees.•
Additional information to the consolidated balance sheet of ING Group (continued)
2.1 Consolidated annual accounts
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