ING Direct 2013 Annual Report Download - page 231

Notes to the consolidated annual accounts of ING Group continued
Loans and advances to key management personnel
Amount
outstanding 31 December Average interest rate Repayments
amounts in thousands of euros 2013 2012 2013 2012 2013 2012
Executive Board members 3,347 2,338 2.7% 3.3% 500
Management Board members of ING Bank, NN
Group and ING U.S. 800 860 4.0% 3.7% 60 60
Supervisory Board members 282
Total 4,147 3,198 560 342
The total number of stock options on ING Groep N.V. shares held by the Executive Board members of ING Groep N.V. amounted to
178,203 as at 31 December 2013 (2012: 77,447) and total number of stock options on ING Groep N.V. shares held by Management Board
members of ING Bank, NN Group and the Named Executive Officers of ING U.S., Inc. amounted to 1,187,306 as at 31 December 2013
(2012: 1,967,465). As at 31 December 2013, members of the Supervisory Board held 92,959 stock options on ING Groep N.V. shares
(2012: 113,796). As at 31 December 2013, members of the Executive Board held 193,608 ING Groep N.V. shares (2012: 189,128, including
12,372 shares which are subject to retention in a blocked account as required under the CRD III regulations) and members of the
Management Boards of ING Bank, NN Group and the Named Executive Officers of ING U.S., Inc. held 395,798 ING Groep N.V. shares
(2012: 302,131, including 54,866 shares which are subject to retention in a blocked account as required under the CRD III regulations).
As at 31 December 2013, members of the Supervisory Board held 285,157 ING Groep N.V. shares (2012: 324,956).
Key management personnel compensation is generally included in Staff expenses in the profit and loss account, except for Key
management personnel employed by entities that are presented as held for sale and discontinued operations in which case their
compensation is included in the Total net result from discontinued operations.
Remuneration of the Executive Board, Management Board Bank and Management Board NN Group is recognised in the profit and loss
account in Staff expenses as part of Total expenses. Remuneration in respect of ING U.S. is reflected in Net result from discontinued
operations and does not impact the Total expenses. The total remuneration of the Executive Board, Management Board Bank and
Management Board NN Group as disclosed in the table above (for 2013: EUR 17.2 million) includes all variable remuneration related the
performance year 2013. Under IFRS, certain components of variable remuneration are not recognised in the profit and loss account
directly, but are allocated over the vesting period of the award. The comparable amount recognised in Staff expenses in 2013, and
therefore included in Total expenses in 2013, relating to the fixed expenses of 2013 and the vesting of variable remuneration of earlier
performance years, is EUR 14.4 million.
Transactions with the Dutch State
Illiquid Assets Back-up Facility
ING Group and the Dutch State reached an agreement on an Illiquid Assets Back-up Facility (‘IABF’) on 26 January 2009. The transaction
closed on 31 March 2009. The IABF covers the Alt-A portfolios of both ING Direct USA and ING Insurance US, with a par value of
approximately EUR 30 billion. Under the IABF, ING transferred 80% of the economic ownership of its Alt-A portfolio to the Dutch State. As
a result, an undivided 80% interest in the risk and rewards on the portfolio was transferred to the Dutch State. ING retained 100% of the
legal ownership of its Alt-A portfolio. The transaction price was 90% of the par value with respect to the 80% proportion of the portfolio
of which the Dutch State had become the economic owner. The transaction price remains payable by the Dutch State to ING and will be
redeemed over the remaining life. Furthermore, under the IABF ING pays a guarantee fee to the State and receives a funding fee and a
management fee. As a result of the transaction ING derecognised 80% of the Alt-A portfolio from its balance sheet and recognised a
receivable from the Dutch State. The transferred Alt-A portfolio was previously included in Available-for-sale debt securities. The Dutch State
also acquired certain consent rights with respect to the sale or transfer of the 20% proportion of the Alt-A portfolio that is retained by ING.
Under the terms of the transaction as agreed on 26 January 2009, the overall sales proceeds amounted to EUR 22.4 billion at the
transaction date. The amortised cost (after prior impairments) at the transaction date was also approximately EUR 22.4 billion. The
transaction resulted in a loss in 2009 of EUR 109 million after tax (the difference between the sales proceeds and the amortised cost). The
fair value under IFRS-EU at the date of the transaction was EUR 15.2 billion.
In order to obtain approval from the European Commission on ING Group’s Restructuring Plan (see below), ING agreed to make additional
Illiquid Assets Back-up Facility payments as part of the overall agreement with the European Commission to the Dutch State corresponding
to an adjustment of the fees for the Illiquid Assets Back-up Facility. In total, these additional Illiquid Assets Back-up Facility payments as
part of the overall agreement with the European Commission amounted to a net present value of EUR 1.3 billion before tax, which was
recognised as a one-off charge in 2009.
The difference between the total sales proceeds of EUR 21.1 billion (EUR 22.4 billion -/- adjustment of EUR 1.3 billion) and the fair value
under IFRS-EU of EUR 15.2 billion represents a ‘Government grant’ under IAS 20. This government grant is considered to be an integral
part of the transaction and is therefore accounted for as part of the result on the transaction. The transaction resulted in a reduction of the
negative revaluation and therefore an increase in equity of EUR 4.6 billion (after tax).
229ING 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