ING Direct 2015 Annual Report Download - page 146

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
In May 2015, ING Group has made a capital injection into NN Group of EUR 57 million by subscribing for newly issued shares for an
aggregate amount of EUR 57 million and ING has provided NN Bank a EUR 63 million facility which allows the bank to draw additional
Tier 1 capital. With this provision of capital, ING Group fulfilled a commitment to the European Commission (EC) pertaining to the
capitalisation of NN Bank, which is included in the EC decision of 16 November 2012. With the deconsolidation of NN Group, ING also
fulfilled the commitment to divest NN Bank for more than 50% and deconsolidate NN Bank before year-end 2015. The NN Bank
targets for mortgage production and consumer credit production needed to be met until year-end 2015. Also, the mortgage
production restrictions at ING Retail Banking Netherlands in relation to mortgage production of Nationale-Nederlanden Bank applied
until year-end 2015. At the end of 2015, ING and the Dutch State reported to the European Commission that the NN Bank related
commitments have been fulfilled.
Reference is made to Note 11 ‘Assets held for sale’, Note 45 ‘Companies and businesses acquired and divested’ and Note 50 ‘Other
events’.
Credit Guarantee Scheme
As part of the measures adopted to protect the financial sector, the Dutch State introduced a EUR 200 billion credit guarantee scheme
for the issuance of medium term debt instruments by banks (the Credit Guarantee Scheme). ING Bank N.V. issued government
guaranteed debt instruments under this Credit Guarantee Scheme (‘Government Guaranteed Bonds’) as part of its regular medium-
term funding operations. The relevant Rules of the Credit Guarantee Scheme set forth the rules applicable to any issues under the
Credit Guarantee Scheme and include information such as scope, denomination, tenor and fees payable by the banks. ING Group paid
a fee of 84 basis points over the issued bonds to the Dutch State to participate in the Credit Guarantee Scheme. In 2014, all these
bonds were fully repaid.
50 Other events
VISA
ING Bank and other subsidiaries within ING Group are principal members of VISA Europe and together hold 6 redeemable ordinary
shares in VISA Europe Limited. These ordinary shares are recognised as available-for-sale equity securities and were valued at EUR 10
per share. In November 2015, VISA Inc. and VISA Europe announced a definitive agreement for VISA Inc.to acquire VISA Europe. The
transaction is subject to regulatory approvals and is expected to close in the second quarter of 2016. In December 2015, the principal
members of VISA Europe received letters informing them on the calculation of their share in the transfer proceeds.
The announcement and the letters received provided the basis for the reassessment of the fair value of the shares. The fair value of
the shares, EUR 154 million as at 31 December 2015, is determined by taking into account the upfront consideration, consisting of
cash and preferred shares, the earn-out consideration and any uncertain factors that could affect the upfront and earn-out
consideration. It is considered unlikely that the fair value will materially differ from the value included in the letters received from VISA
Europe in December 2015. The shares are recognised as Investment in available-for-sale equity securities. The increase in fair value of
EUR 154 million is recognised in Equity. Reference is made to Note 5 ‘Investments’, Note 13 ‘Equity’ and Note 36 ‘Fair value of assets
and liabilities’.
Regulatory costs
ING Bank is required to contribute to the Deposit Guarantee Schemes (‘DGS’) and National Resolution Fund (‘NRF’) in all countries where
it operates.
Dutch ex-ante DGS
Until 2015, the DGS system in the Netherlands was funded on an ex-pots basis. The EU DGS Directive requires ex-ante funding as of 1
January 2015. In January 2016, the Dutch Central Bank informed the Dutch banks that it decided to postpone the first contribution
date for the ex-ante DGS. The first ex-ante DGS contribution will be recognised in the profit and loss account in the first quarter of
2016. This delay does not affect the target size of the ex-ante DGS fund, nor the date at which the target size should be reached, being
July 2024. As at 31 December 2015, ING Group did not have a present obligation for the Dutch ex-ante DGS and as a result, no
provision has been recognised.
National Resolution Fund
The Bank recovery and Resolution Directive (‘BRRD’) 2014/59/EU regarding ex-ante contributions to resolution financing arrangements
were enacted into Dutch, German and Belgian law during 2015. The directive has not yet been enacted into Belgian and Polish law.
ING Vysya Bank
2015
In 2014, ING Vysya Bank (‘ING Vysya’) and Kotak Mahindra Bank (‘Kotak’) announced their intention to merge their respective
businesses. As at 31 December 2014, ING Vysya was presented as Assets held for sale. The shareholders of Kotak and ING Vysya
approved this transaction in January 2015. On 31 March 2015, the Reserve Bank of India approved the transaction with an effective
date of 1 April 2015.
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