ING Direct 2015 Annual Report Download - page 71

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
Liabilities
14 Subordinated loans
Subordinated loans relate subordinated capital debenture and private loans which may be included in the calculation of the capital
ratio.
Subordinated liabilities include EUR 7,248 million (2014: EUR 5,727 million) of loans that qualify as Tier 1 capital. These loans have been
placed with ING Bank N.V. by ING Group.
The average interest rate on the subordinated loans is 4.8% (2014: 4.5%). The interest expense during the year 2015 was EUR 820
million (2014: EUR 716 million).
The decrease in 2015 of EUR 0.7 billion, primarily reflects a decrease of Tier 2 funding, offset by an increase in capital as ING Group
issued USD 2.25 billion securities that qualify as Additional Tier 1 under CRR/CRD IV. The issuance on 16 April 2015 was in the form of
USD denominated Perpetual Additional Tier 1 Contingent Convertible Capital Securities and comprised two separate tranches: a USD 1
billion Perpetual Non-Callable 5 Year with coupon 6.0%; and a USD 1.25 billion Perpetual Non-Callable 10 Year with coupon 6.5%. The
securities are subject to full conversion into ordinary shares of ING Bank in the event that ING Bank’s phased-in CET1 ratio would fall
below 7.0%. These securities were on-lent to ING Bank partially replacing internal securities.
2014 - ING Perpetual Hybrid Capital Securities
ING Bank redeemed the EUR 1.1 billion 8% ING Perpetual Hybrid Capital Securities per the call date of 18 April 2014. The Tier 1 hybrid
was replaced by the EUR 1.5 billion 3.625% CRD IV eligible Tier 2 securities that were successfully issued by ING Bank in February 2014.
The subordinated loans increased in 2014 with USD 1.3 billion for CRD IV compliancy purposes. A new subordinated loan of USD 1.5
billion was obtained from ING Group.
15 Debt securities in issue
Debt securities in issue relate to debentures and other issued debt securities with either fixed interest rates or interest rates based on
floating interest rate levels, such as certificates of deposit and accepted bills issued by ING Bank, except for subordinated items. Debt
securities in issue do not include debt securities presented as Financial liabilities at fair value through profit and loss. ING Bank does not
have debt securities that are issued on terms other than those available in the normal course of business. The maturities of the debt
securities are as follows:
2015
2014
Fixed rate debt securities
Within 1 year
39,979
42,621
More than 1 year but less than 2 years
6,057
9,164
More than 2 years but less than 3 years
11,192
5,793
More than 3 years but less than 4 years
6,068
7,872
More than 4 years but less than 5 years
7,845
5,952
More than 5 years
20,181
23,153
Total fixed rate debt securities
91,322
94,555
Floating rate debt securities
Within 1 year
9,483
9,330
More than 1 year but less than 2 years
6,056
6,169
More than 2 years but less than 3 years
1,958
3,220
More than 3 years but less than 4 years
2,827
380
More than 4 years but less than 5 years
476
1,793
More than 5 years
5,434
5,512
Total floating rate debt securities
26,234
26,404
Total debt securities
117,556
120,959
In 2015, the decrease in Debt securities in issue of EUR 3.4 billion is mainly attributable to a decrease in certificates of deposits of EUR
3.7 billion and a decrease in covered bonds, commercial paper and savings certificates due to reduced funding requirements. These
were partly offset by the issuance of long term bonds of EUR 1.8 billion.
Debt securities in issue – maturities
ING Bank Annual Report 2015 69