ING Direct 2011 Annual Report Download - page 230

Risk management continued
ING Bank
Risk concentration: ING Bank portfolio, by economic sector (1) (2)
Commercial Banking Retail Banking Benelux
Retail Banking Direct
& International Total ING Bank
2011 2010 2011 2010 2011 2010 2011 2010
Private Individuals 0.0% 0.1% 75.3% 74.8% 55.1% 51.6% 41.3% 40.0%
Commercial Banks 16.2% 17.9% 0.2% 0.3% 11.1% 13.2% 9.8% 11. 2%
Non-Bank Financial Institutions 10.7% 13.3% 1.1% 1.2% 14.5% 16.8% 9.4% 11.1%
Central Governments 10.7% 11.7% 0.9% 1.0% 6.6% 8.0% 6.5% 7.3%
Real Estate 13.0% 13.6% 4.5% 4.5% 0.9% 0.9% 6.2% 6.4%
Central Banks 9.6% 4.0% 0.1% 0.1% 3.3% 1.2% 4.6% 1.8%
Natural Resources 10.9% 10.3% 0.4% 0.4% 0.4% 0.4% 4.1% 3.9%
Transportation & Logistics 5.9% 5.7% 1.3% 1.4% 0.2% 0.2% 2.5% 2.5%
Services 3.3% 3.3% 3.3% 3.3% 0.3% 0.3% 2.2% 2.2%
Lower Public Administration 0.4% 0.5% 1.4% 1.3% 4.4% 4.3% 2.1% 2.1%
Other 19.3% 19.6% 11.5% 11.7% 3.2% 3.1% 11.3% 11.5%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
(1) Based on the total amount of credit risk in the respective column using ING Bank’s internal credit risk measurement methodologies.
(2) Economic sectors below 2% are not shown separately but grouped in Other.
ING Bank Lending portfolio
The largest relative geographic area of growth was Belgium, especially in the residential mortgage portfolio. The Americas was the second
region in terms of growth which corresponds with the region’s economic recovery in 2011. Exchange rate effects had further impact on
the regional division.
In line with ING Bank’s de-risking strategy, the portfolio developments in most countries mirrored the developments in the portfolio as a
whole. The depreciated Euro versus the Australian, Canadian and the US dollar had an upward effect of the exposure to the Americas and
Asia/Pacific and therewith also to the Retail Banking Direct and International and Commercial Banking portfolios. Excluding ING Direct
USA, Retail Banking Direct and International showed a marginal increase, mainly as the result of currency effects.
Largest economic exposures: ING Bank lending portfolio, by geographic area (1)
Commercial Banking Retail Banking Benelux
Retail Banking Direct &
International Total ING Bank
2011 2010 2011 2010 2011 2010 2011 2010
Netherlands 21.3% 20.7% 73.8% 74.8% 3.5% 4.8% 30.7% 31.2%
Belgium 8.0% 7.7% 24.3% 23.2% 0.3% 0.2% 10.2% 9.6%
Rest of Europe 44.1% 45.2% 1.2% 1.3% 53.3% 53.3% 34.4% 35.0%
Americas 14.9% 14.8% 0.2% 0.2% 27.6% 26.4% 15.1% 14.6%
Asia/Pacific 11.2% 11.2% 0.1% 0.1% 15.3% 15.3% 9.3% 9.4%
Rest of World 0.5% 0.4% 0.4% 0.4% 0.0% 0.0% 0.3% 0.2%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
(1) Geographic areas are based on the country of residence of the obligor.
Credit Covers
At ING Bank, cover is a term which is defined as any security, lien, mortgage, or collateral interest in an asset or guarantee, indemnification
or undertaking received (either by contract and/or by law) that is intended to reduce the losses incurred subsequent to an event of default
on an obligation (usually financial in nature) a customer may have towards ING Bank. Within ING Bank, covers are subdivided into two
distinct groups, called collateral and promises. Reference is made to credit risk management classification as included in the accounting
policies for the consolidated annual accounts for a reconciliation between credit risk outstandings categories and financial assets.
Collateral
Collateral is a security interest in assets. If the customer defaults on its promised performance, the asset is given as collateral or security for
that obligation is liquidated, such that the proceeds can be applied towards full or partial compensation of the pledgor’s (financial) obligation
to ING Bank. Assets have monetary value and are generally owned by the person or organisation, which gives them as collateral to ING Bank.
An asset may be tangible, like plant & machinery, buildings, bonds, receivables etc. or intangible like patents, copyrights and trademarks.
228 ING Group Annual Report 2011