ING Direct 2015 Annual Report Download - page 186

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
Cover type
Value to Loan
Outstan-
dings
Mortgages
Eligible
Financial
Collateral
Other
CRR/CRDIV
eligible
Guaran-
tees
Non
CRR/CRD IV
eligible
No Cover
Partially
covered
Fully
covered
Consumer Lending
296,451
445,855
2,976
512
30,240
31,628
5.0%
22.9%
72.1%
Business Lending
262,415
112,817
17,680
83,916
56,835
110,661
33.7%
30.5%
35.8%
Investment and Money Market
118,198
16
298
3,454
16
97.2%
1.1%
1.7%
Total Lending, Investment and
Money Market
677,065 558,673 20,673 84,726 90,529 142,305 32.2% 22.0% 45.7%
Pre-settlement3
51,602
Total Bank
728,667
558,673
20,673
84,726
90,529
142,305
32.2%
22.0%
45.7%
1 Including loans to ING Group and NN Group.
2 Excluding intercompany positions.
3 More information on the credit risk mitigants of the Pre-settlement exposure can be found in the Pre-settlement section.
Over the year, the collateralisation level of the total ING Bank portfolio improved. Excluding the pre-settlement portfolio for which
covers are netted to derive the outstandings at risk, 47.4% of the total ING Bank’s outstandings (from 45.7% as of 2014) are fully
collateralised in 2015.
Investment outstandings remained stable over the year. Since investments traditionally do not require covers, the no covers ratio in
this portfolio is close to 100%. However, 94% of the investment outstandings are investment grade.
In the Lending portfolio, coverage within consumer lending increased influenced by an improvement in the house price index in the
Netherlands. Increase in Business Lending outstandings was also the reason for increase in the guarantees received on exposures in
that portfolio.
Consumer lending portfolio
The Consumer Lending portfolio comprises of Residential Mortgage loans (92.4% in 2015 versus 93.7% in 2014) and Other Consumer
Lending loans, which mainly comprise credit cards, term loans and revolvers to consumers. As a result, most of the collateral consists
of mortgages. The mortgage values are maintained in the ING Bank’s central database (Vortex) and in most cases external data is
used to index the market value. On a quarterly or annual basis, the mortgages value is updated in Vortex using the relevant house
price index (the NVM Index in the Netherlands, Level Housing Index in Australia, Crif Real Estate Appraisal Company in Italy, Ministerio
de Fomento in Spain and Stadim in Belgium).
A significant part (45.8% in 2015 versus 49.3% in 2014) of the ING Bank’s Residential Mortgage portfolio relates to mortgage loans
provided in the Netherlands, followed by other main markets such as Germany (23.3%), and Belgium (11.5%). 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 dictates maximum loan to market value (LTMV) for an existing property and for
construction property financing of 104%. The cover values are captured in the local systems which are subsequently 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).
Cover values including guarantees received - Total ING Bank – 20141,2
ING Bank Annual Report 2015 184