ING Direct 2015 Annual Report Download - page 139

Contents
Who we are
Report of the
Management
Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Notes to the Consolidated annual accounts of ING Bank - continued
4. Unconsolidated Securitisation programme
In 2013 ING transferred financial assets (mortgages loans) for an amount of approximately EUR 2 billion to a newly established special
purpose entity (SPE). The transaction resulted in full derecognition of the financial assets from ING’s balance sheet. The derecognition
did not have a significant impact on net result. Following this transfer ING continues to have two types of on-going involvement in the
transferred assets: as counterparty to the SPE of a non-standard interest rate swap and as servicer of the transferred assets. ING has
an option to unwind the transaction by redeeming all notes at their principal outstanding amount, in the unlikely event of changes in
accounting and/or regulatory requirements that significantly impact the transaction. The fair value of the swap as at 31 December
2015 amounted to EUR 1.3 million (2014: EUR 33.7 million); fair value changes on this swap recognised in the profit and loss account in
2015 were EUR –32.4 million (2014: EUR 28.6 million). Fee income recognised in the profit and loss account in 2015 amounted to nil
(2014: EUR 0.5 million).
5. Other structured entities
In the normal course of business, ING Bank enters into transactions with structured entities as counterparty. Predominantly in its
structured finance operations, ING can be instrumental in facilitating the creation of these structured entity counterparties. These
entities are generally not included in the consolidated financial statements of ING Bank, as ING facilitates these transactions as
administrative agent by providing structuring, accounting, funding, lending and operation services.
ING Bank offers various investment fund products to its clients. ING Bank does not invest in these investment funds for its own account
nor acts as the fund manager.
48 Related parties
In the normal course of business, ING Bank enters into various transactions with related parties. Parties are considered to be related if
one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions.
Related parties of ING Bank include, amongst others, its subsidiaries, associates, joint ventures, key management personnel and
various defined benefit and contribution plans. Transactions between related parties include rendering or receiving of services, leases,
transfers under finance arrangements and provisions of guarantees or collateral. There are no significant provisions for doubtful debts
or individually significant bad debt expenses recognised on outstanding balances with related parties.
Transactions between ING Bank N.V. and its subsidiaries are eliminated on consolidation. Reference is made to Note 46 ‘Principal
subsidiaries’ for a list of principal subsidiaries and their statutory place of incorporation. ING Bank together with NN Group forms the
ING Group. ING Bank also enters into transactions with ING Group, NN Group and its subsidiaries. These transactions vary from
financing activities to regular purchases and sales transactions. Disclosed in the table below, are transactions with ING Groep N.V. and
NN Group N.V.
ING Groep N.V.
NN Group N.V.
2015
2014
2015
2014
Assets
286
133
748
Liabilities
15,608
9,944
1,679
Off-balance sheet commitments
Income received
–297
162
15
57
Expenses paid
0
507
8
49
In 2015, a number of divestment transactions reduced ING Group’s interest in NN Group, resulting in ING Group losing control over NN
Group. NN Group was deconsolidated at the end of May 2015 and accounted for as an Investment in associate held for sale by ING
Group. For the year ended 2015, NN Group remained a related party of ING Bank N.V.
Liabilities to ING Groep N.V. mainly comprise long-term funding. Liabilities to NN Group N.V. mainly comprise short-term deposits and
private loans made by NN Group N.V.
During 2013, due to the partial transfer of WestlandUtrecht Bank, certain assets and liabilities were transferred from ING Bank to NN
Group. Reference is made to Note 49 ‘Transaction with the Dutch State and the European Commission Restructuring Plan’. In addition,
during 2015, 2014 and 2013 a further EUR 1.7 billion, EUR 1.2 billion and EUR 4.2 billion respectively Dutch mortgages were transferred
from WestlandUtrecht Bank to NN Group. The transfers were made at an arm’s length price.
Transactions with ING Groep N.V. and NN Group N.V.
ING Bank Annual Report 2015 137