ING Direct 2013 Annual Report Download - page 289

Risk management continued ING Bank
A significant part (49.1%) of the ING Bank’s residential mortgage portfolio relates to mortgage loans provided in the Netherlands, followed
by other main markets such as Germany (22.5%), and Belgium (10.6%). Given the size of the Dutch mortgages portfolio, below the
valuation methodology employed to determine the cover values for the Dutch Residential Mortgages is provided.
Dutch mortgages valuation
When a mortgage loan is granted, the policy maximum loan to market value (LTMV) for an existing property and for construction property
financing is 105%. The cover values are captured in the local systems which then are fed into a central data system (Vortex). All valuations
are performed by certified valuators that are registered at one of the ING Bank-accepted organisations. In addition, the valuator must be a
member of the NVM (Nederlandse Vereniging van Makelaars – Dutch Association of Real Estate Agents), VBO (Vereniging Bemiddeling
Onroerend Goed – Association of Real Estate Brokers), VastgoedPRO (Association of Real Estate Professionals) or NVR (Nederlandse
Vereniging van Rentmeesters).
The below tables show the values of different covers and the VTL split between performing and non-performing loans.
Consumer Lending
Cover values including guarantees received - Consumer portfolio - 2013 (1,2)
Cover type Value to Loan
Out-
standings
Mort-
gages
Eligible
Financial
Collateral
Other
Basel II
eligible
Guaran-
tees
Non Basel
II eligible
No Cover/
Data not
available
>0%-
25%
>25%-
50%
>50%-
75%
>75%-
100% >100%
Performing
Residential Mortgages (3) 273,150 435,217 2,411 233 29,624 23,490 0.4% 0.1% 2.2% 7.7% 23.6% 66.1%
Other Consumer Lending 15,737 3,347 255 257 382 5,718 78.0% 0.2% 0.2% 0.4% 1.3% 20.0%
Total Performing 288,887 438,564 2,666 490 30,006 29,208 4.6% 0.1% 2.1% 7.3% 22.4% 63.6%
Non-performing
Residential Mortgages (3) 4,151 4,757 30 8371 260 1.7% 0.3% 1.7% 11.9% 37.9% 46.5%
Other Consumer Lending 676 154 121 26 98 81.7% 0.2% 0.3% 0.7% 1.8% 15.3%
Total Non-performing 4,827 4,911 31 29 397 358 12.9% 0.3% 1.5% 10.3% 32.9% 42.1%
Total Consumer Lending 293,714 443,475 2,697 519 30,403 29,566 4.7% 0.1% 2.1% 7.3% 22.5% 63.2%
Cover values including guarantees received - Consumer portfolio - 2012 (1,2)
Cover type Value to Loan
Out-
standings Mortgages
Eligible
Financial
Collateral
Other
Basel II
eligible
Guaran-
tees
Non Basel
II eligible
No Cover/
Data not
available
>0%-
25%
>25%-
50%
>50%-
75%
>75%-
100% >100%
Performing
Residential Mortgages (3) 292,841 4 67, 847 2,266 218 32,294 23,766 0.3% 0.1% 1.9% 6.4% 23.1% 68.2%
Other Consumer Lending 14,930 3,362 322 267 450 5,497 76.6% 0.1% 0.2% 0.4% 1.0% 21.7%
Total Performing 307,771 471,209 2,588 485 32,744 29,263 4.0% 0.1% 1.8% 6.1% 22.1% 66.0%
Non-performing
Residential Mortgages (3) 3,609 4,243 25 6268 286 1.8% 0.4% 1.9% 11.6% 34.5% 49.9%
Other Consumer Lending 636 139 27 25 25 88 81.5% 0.2% 0.3% 0.7% 1.9% 15.4%
Total Non-performing 4,245 4,382 52 31 293 374 13.7% 0.4% 1.7% 10.0% 29.6% 44.7%
Total Consumer Lending 312,016 475,591 2,640 516 33,037 29,637 4.1% 0.1% 1.8% 6.2% 22.2% 65.7%
(1) including loans to ING Group and NN Group.
(2) excluding intercompany positions.
(3) In 2012, the Foreclosure value was used as the mortgage cover value in the Netherlands. In 2013, ING Bank started to use Market value in its mortgage LGD
model for the Dutch portfolio instead of the Foreclosure value. To assure the comparability of the figures for two years, the Mortgage cover value of 2012
was adjusted to the Market value for the Dutch Residential Mortgage portfolio.
The collateralisation of the Consumer lending portfolio slightly decreased during 2013, mostly due to the deterioration of the Residential
Mortgages portfolio as a result of the current economic environment. This is mainly visible in the Dutch portfolio, where the loan
outstandings went down by 7.6% while the mortgages value decreased by 8.6% as a result of the decreased house price in the
Netherlands.
The numbers shown are conservative as the savings pledged to the mortgage product, ‘Spaarhypotheek’ (or Mortgage with external
Saving account) present in the Dutch mortgage portfolio are not taken into account in the table above.
287ING 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