ING Direct 2013 Annual Report Download - page 163

Notes to the consolidated annual accounts of ING Group continued
29 NET TRADING INCOME
Net trading income
Banking operations Insurance operations Total
2013 2012 2011 2013 2012 2011 2013 2012 2011
Securities trading results 129 252 –133 109 91 37 238 343 –96
Foreign exchange transactions
results –138 –142 –374 108 482 –178 –30 340 –552
Derivatives trading results 411 899 882 411 899 882
Other 81 113 –49 –30 –33 25 51 80 –24
483 1,122 326 187 540 –116 670 1,662 210
Securities trading results includes the results of market making in instruments such as government securities, equity securities, corporate
debt securities, money-market instruments, and interest rate derivatives such as swaps, options, futures and forward contracts. Foreign
exchange transactions results include gains and losses from spot and forward contracts, options, futures, and translated foreign currency
assets and liabilities.
The portion of trading gains and losses relating to trading securities still held as at 31 December 2013 amounts to EUR –105 million
(2012: EUR 118 million; 2011: EUR –66 million).
The majority of the risks involved in security and currency trading is economically hedged with derivatives. The securities trading results are
partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading results.
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that are classified under IFRS-EU as
‘Trading’ but are closely related to servicing the needs of the clients of ING. ING Bank offers institutional and corporate clients and
governments products that are traded on the financial markets. A significant part of the derivatives in the trading portfolio are related to
servicing corporate clients in their risk management to hedge for example currency or interest rate exposures. In addition, ING Bank provides
its customers access to equity and debt markets for issuing their own equity or debt securities (‘securities underwriting’). Although these
are presented as ‘Trading’ under IFRS-EU, these are directly related to services to ING’s customers. Loans and receivables in the trading
portfolio mainly relate to (reverse) repurchase agreements, which are comparable to collateralised borrowing (lending). These products are
used by ING Bank as part of its own regular treasury activities, but also relate to the role that ING Bank plays as intermediary between
different professional customers. Trading assets and liabilities held for ING’s own risk are very limited. From a risk perspective, the gross
amount of trading assets must be considered together with the gross amount of trading liabilities, which are presented separately on the
balance sheet. However, IFRS-EU does not allow netting of these positions in the balance sheet. Reference is made to Note 4 ‘Financial assets
at fair value through profit and loss’ and Note 21 ‘Financial liabilities at fair value through profit and loss’ for information on trading liabilities.
In 2013, for the Banking operations, Net trading income - Derivatives trading results includes EUR 243 million positive CVA/DVA
adjustments on trading derivatives, compared with EUR 64 million positive CVA/DVA adjustment in 2012.
30 OTHER INCOME
Other income
Banking operations Insurance operations Total
2013 2012 2011 2013 2012 2011 2013 2012 2011
Net operating lease income 11176 11176
Income from real estate
development projects 32 22 31 32 22 31
Other 137 –399 909 38 –22 109 175 –421 1,018
170 –376 1,116 38 –22 109 208 –398 1,225
Net operating lease income comprises income of EUR 18 million (2012: EUR 2 million; 2011: EUR 772 million) and depreciation of
EUR 17 million (2012: EUR 1 million; 2011: EUR 596 million).
In 2013, Other income - Other includes EUR 100 million result (before tax) on the unwinding of the Illiquid Assets Back-up Facility.
Reference is made to Note 58 ‘Related parties’.
In 2012, Other income - Other included losses on disposal of Loans and advances to customers of EUR 618 million.
In 2011, Other income - Other included a gain of EUR 955 million on the repurchase of subordinated loans as disclosed in Note 15
‘Subordinated loans’.
161ING Group Annual Report 2013
1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information