ING Direct 2013 Annual Report Download - page 12

EUR50 million, will be used to increase the next repayment of core
Tier 1 securities to the Dutch State, scheduled for March 2014.
Thefinal payment to the Dutch State, scheduled for May 2015 will
be lowered by the same amount. The total amount of the
repayment to the Dutch State remains unchanged.
It remains ING’s ambition to repay the remaining support as quickly
as possible and ING aspires to accelerate repayments if possible
andprudent under the prevailing economic circumstances. Given
the weak macro economy in the eurozone and increasing
regulatory capital requirements, ING needs to take a cautious
approach and to maintain strong capital ratios in the Bank as it
builds towards the implementation of Capital Requirements
Regulation and Directive IV (CRR/CRD IV). Each subsequent
repayment to the Dutch State requires prior approval from DNB,
atthe time ING decides to propose such repayment.
LISTINGS
Depositary receipts for ING Group ordinary shares are listed
onthestock exchanges of Amsterdam, Brussels and New
York(NYSE).Options on ING Group ordinary shares (or the
depositaryreceipts thereof) are traded on the NYSE Euronext
AmsterdamDerivative Markets and the Chicago Board
OptionsExchange.
SHAREHOLDERS AND DEPOSITARY-RECEIPT HOLDERS
WITHSTAKES OF 3% OR MORE
More than 99.9% of the ordinary shares issued by ING Groep N.V.
is held by Stichting ING Aandelen (ING Trust Office). In exchange
for these shares, ING Trust Office has issued depositary receipts in
bearer form for these shares. The depositary receipts are listed on
various stock exchanges. For the report of the board of Stichting
ING Aandelen, please refer to pages 74-76.
Authorised and issued capital
in EUR million
Year-end
2013
Year-end
2012
Ordinary shares
– authorised 3,480 3,480
– issued 921 919
Cumulative preference shares
– authorised 1,080 1,080
– issued ––
Shares in issue and shares outstanding in the market
in millions
Year-end
2013
Year-end
2012
(Depositary receipts for) ordinary shares
of EUR 0.24 nominal value 3,840.9 3,831.6
(Depositary receipts for) own ordinary shares
held by ING Group and its subsidiaries 4.0 30.1
(Depositary receipts for) ordinary shares 3,836.9 3,801.5
Prices of depositary receipts for ordinary shares
Euronext Amsterdam by NYSE Euronext
in EUR 2013 2012 2011
Price – high 10.10 7.49 9.41
Price – low 5.54 4.53 4.49
Price – year-end 10.10 7.0 6 5.56
Price/earnings ratio* 11.9 6.4 3.6
Price/book value ratio 0.82 0.47 0.42
* Based on the share price at year-end and net profit per ordinary share
for the financial year.
PROFIT RETENTION AND DISTRIBUTION POLICY
ING Group’s profit retention and distribution policy is determined
by internal and external capital requirements and profitable
business opportunities on the one hand, and shareholders’
dividend expectations on the other. ING Group’s internal needs are
determined by statutory solvency requirements and capital ratios, in
excess of which ING Group needs to maintain healthy buffers. An
important determinant are the credit ratings which are of high
importance to ING Group, because they influence the company’s
financing costs and hence profitability. For their part, shareholders
expect a dividend which reflects ING Group’s financial results and is
relatively predictable.
ING’s policy is to pay dividends in relation to the long-term
underlying development of cash earnings. Dividends will only be
paid when the Executive Board considers such a dividend
appropriate. Given the uncertain financial environment, increasing
regulatory requirements and ING’s priority to repay the remaining
outstanding core Tier 1 securities, the Executive Board will not
propose to pay a dividend in respect of 2013 at the annual General
Meeting. ING intends to resume dividend payments on common
shares when all remaining core Tier 1 securities have been repaid
tothe Dutch State and regulatory capital requirements have
beenmet.
CORE TIER 1 SECURITIES
In October 2008, to support its capital position, ING Group made
use of capital support facilities from the Dutch State by issuing
EUR 10 billion of core Tier 1 securities to the Dutch State with a
coupon of 8.5%. The core Tier 1 securities rank pari passu with
common equity.
In December 2009, ING repaid half of the core Tier 1 securities of
EUR 5 billion plus a total premium of EUR 605 million. Furthermore,
at the coupon reset date, 13 May 2011, ING exercised its option
forearly repayment of EUR 2 billion of the remaining core Tier 1
securities. The total repayment in May 2011 amounted to EUR
3billion and included a 50% repayment premium. ING has funded
this repayment from retained earnings.
On 19 November 2012, ING announced that, together with the
Dutch State, it reached an agreement with the European
Commission on significant amendments to the 2009 Restructuring
Plan. As part of the agreement, ING filed a schedule for repayment
to the Dutch State of the remaining EUR 3 billion in core Tier 1
securities plus a 50% premium, in four tranches in the years
2012-2015. A first tranche of EUR 1.125 billion was paid on 26
November 2012, following approval by De Nederlandsche Bank
(DNB), the Dutch central bank. A second tranche of EUR 1.125
billion was paid on 6 November 2013, also following approval of
DNB. This brought the total paid to the Dutch State to EUR 11.3
billion, including EUR 8.5 billion in principal and EUR 2.8 billion
ininterest and premiums.
On 15 November 2013, ING announced the successful completion
of seven separate exchange offers of subordinated debt into CRD
IV eligible Tier 2 securities by ING Bank. These transactions, aswell
as the calling of the USD 2 billion 8.5% Hybrid Tier 1 in December
by INGGroup, were announced on 6 November 2013. The total
capital gain after tax of the exchange offers, together with the net
present value of the financial benefit to be realised by the calling
ofthe USD 2 billion 8.5% Hybrid Tier 1, totalling approximately
10 ING Group Annual Report 2013
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