ING Direct 2015 Annual Report Download - page 210

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
Funding and Liquidity profile
Funding sources
In 2015, ING Bank had readily access to a large variety of funding sources, both short term and long term. In the table below, the
various funding sources are presented in the funding mix:
2015
2014
Funding type
Retail deposits
48%
47%
Corporate & other deposits
22%
22%
Interbank (incl. central bank)
5%
6%
Lending/repurchase agreement
5%
4%
Public debt
18%
19%
Subordinated debt
2%
2%
Total
100%
100%
The funding mix remained well diversified and according to targets set. Retail deposits remained ING Bank’s primary sources of funds
and remained relatively stable at 48% of the total funding mix per 2015 Q4. The Loan-to-Deposit ratio (excluding securities at
amortised costs) remained constant at 1.04 per 2015 Q4, compared to 2014 year-end.
Asset encumbrance
For quantitative details reference is made to the Pillar III report.
Regulatory developments
Based on the final Delegated Act on the liquidity coverage ratio issued by the European Commission (EC) in October 2014, the
European Banking Authority (EBA) issued Implementing Technical Standards with regard to the reporting of the LCR as per 1 October
2015. The LCR is calculated based on this Delegated Act Implementation Technical Standards.
In absence of the EC approval, the Dutch National Regulator (DNB) has issued guidance on the level and reporting dates of the LCR as
of October 2015. DNB has defined minimum requirements for the LCR for ING Consolidated and ING Bank N.V. Solo scope at 100%. The
DNB definition includes the netting of retail and wholesale cash pools, also referred to as the National LCR (NLCR). Per December 2015,
ING Bank complies with these regulatory requirements.
The Basel Committee (BCBS) has finalised their NSFR policy document in October 2014, after which the EBA has started their review in
2015, with the aim to provide recommendations to the EC at the end of 2015. During 2016, the EC will study these recommendations
in order to submit a legislative proposal on NSFR to the European Parliament and Council by the end of that year. The NSFR ratio is
reported on a quarterly basis and will come in force as of 2018.
Next to the liquidity ratios, it is required to report additional monitoring metrics as defined by the EBA as of 2016.
Non-Financial Risk
Introduction
The Non-Financial Risk (NFR) department encompasses the operational and compliance risk management functions. It ensures
appropriate risk controls in these functional areas by implementing clear policies and minimum standards which are embedded in ING
Bank business processes in all divisions. The necessary infrastructure is in place to enable management to track events and non-
financial risk issues. A comprehensive system of internal controls creates an environment of continuous improvement in managing
non-financial risk.
ING Bank believes that fully embedding controls preserves and enhances the trust of its customers, staff and shareholders and is
essential to build sustainable businesses. The Orange Code sets the foundation for the high ethical standards ING Bank expects from
all its business activities. The Orange Code requires all staff to conduct themselves, not only within the spirit and letter of laws and
regulations, but above all, with integrity, whilst being honest, prudent and responsible.
Governance
Non-Financial Risk Committees (NFRCs) and Management Teams (MTs) manage, measure and monitor operational and compliance
risks. NFRCs exist at Bank level and at other relevant levels. They are chaired by the first line of defence and steer the risk management
activities of the first and second lines of defence in their scope. Non-financial risk topics are an integral part of the agenda of regular
MTs at all levels in the organisation. The Bank NFRC is the primary approval and oversight committee for non-financial risk matters.
ING Bank Funding Mix
ING Bank Annual Report 2015 208