ING Direct 2015 Annual Report Download - page 269

Contents
Report of the
Executive Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Additional Pillar III information - continued
2015
2014
Sovereigns Institutions Corporate
Secured by
Res. Mortgage Other retail
Securitisation
Total Total
Netherlands
3
1,431
418
314
2,166
2,328
Belgium
1
361
81
211
654
691
Germany
42
281
250
573
609
Other Europe
8
11
1,447
121
519
34
2,140
2,151
Americas
1
138
2
10
151
116
Asia / Pacific
4
85
5
1
95
97
Rest of World
1
2
3
6
3
Total
9
22
3,507
906
1,297
44
5,786
5,995
Includes both AIRB and SA portfolios; excludes securitisations, equities and ONCOA.
Excludes revaluations made directly through the equity account.
1 At the end of 2015, the stock of provisions included provisions for amounts due from banks: EUR 14 million (2014: EUR 6 million).
During the year the provisions decreased from EUR 6.0 billion to EUR 5.8 billion which is a decline of 5.4% year to date. The decrease in
the level of provisions over the year reflects the improved economic climate in which ING operates, especially in the Netherlands.
However, a significant increase in provisions is observed in the Utilities, Natural Resources and Private individuals due to the
deterioration of the credit quality of some specific portfolios due to the international and political turmoil in Eastern Europe and the
Middle-East, ongoing pressure on emerging markets and the direct and indirect negative effects of continued low oil and other
commodity prices. For the second year in a row the Real Estate sector is showing a significant reduction in provisions due to an
improved risk profile and write-offs mainly seen in other Europe. Furthermore, a decrease in provisions is seen in Private Individuals
caused by the improved risk profile of the Dutch Residential Mortgage portfolio. The decrease of provisions in Germany is in line with
the decrease in the non-performing Residential Mortgage loans. However, the coverage ratio, expressed as a percentage of READ NPL,
is 67% for Germany while for ING Bank the average is 37%. This is mainly due to the use of an in default LGD model in Germany.
Past due loans
ING Bank considers past due loans to be those loans where any payment of interest of principal is more than one day past due. The
methodology is principally applied to loans to private individuals, such as residential mortgage loans, car loans and other consumer
loans. For business loans (Sovereigns, Institutions, Corporates), ING Bank has adopted a policy to classify the obligor as a non-
performing loan as quickly as possible upon the occurrence of a payment default. Therefore, the concept of past due loans does not
exist for these types of obligors and hence the reason why the business exposure classes are not included.
The table below is based on the country of residence of the obligor and on credit risk outstandings. Credit Risk outstandings include
amounts associated with both on- and off- balance sheet products, but exclude amounts related to unused limits.
2015
2014
Secured by
Res. Mortgage
Other retail
Total
Total
Netherlands
1,065
8
1,073
1,594
Belgium
1,080
639
1,719
2,081
Germany
252
24
276
182
Other Europe
325
443
768
725
Americas
2
2
3
Asia / Pacific
490
490
556
Rest of World
0
1
Total
3,214
1,114
4,328
5,143
Includes both AIRB and SA portfolios; excludes securitisations, equities and ONCOA.
Total past due exposure for consumer loans decreased from EUR 5.1 billion to EUR 4.3 billion. The decrease is mainly caused by an
improved residential mortgages portfolio in the Netherlands which is a result of the improved economic environment and improved
arrears management. In the German Residential Mortgage portfolio an increase is observed in past due exposures payments between
1 to 90 days compared to end of 2014. This is a result of an improvement project in 2015 with stricter policy requirements.
Cumulative provisions by geographic area1
Past due but not non-performing consumer loans by geographic area (based on outstandings)
ING Bank Annual Report 2015 267