ING Direct 2015 Annual Report Download - page 79

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
The Valuation results on assets and liabilities designated as at fair value through profit and loss includes fair value changes on certain
issued debt securities. Valuation results on assets and liabilities designated as at fair value through profit and loss were mainly due to
changes in the fair value of financial liabilities driven by changes in market conditions and changes in own credit risk as disclosed in
Note 18 ‘Financial liabilities at fair value through profit and loss’. Market conditions include in particular credit spread developments.
In 2015, valuation results on assets and liabilities designated as at fair value through profit and loss (excluding trading) includes fair
value adjustments on own issued notes amounting to EUR 404 million (2014: EUR –632 million; 2013: EUR –136 million), of which DVA
adjustment on own issued notes in 2015 amounted to EUR 163 million (2014: EUR –98 million; 2013: EUR –129 million).
25 Net trading income
2015
2014
2013
Securities trading results
1,352
673
129
Derivatives trading results
600
425
412
Foreign exchange transactions results
–859
–521
–137
Other
66
–16
81
1,159
561
485
Securities trading results includes the results of market making in instruments such as government securities, equity securities,
corporate debt securities, money-market instruments, and interest rate derivatives such as swaps, options, futures and forward
contracts. Foreign exchange transactions results includes gains and losses from spot and forward contracts, options, futures, and
translated foreign currency assets and liabilities.
The portion of trading gains and losses relating to trading securities still held as at 31 December 2015 amounts to EUR 147 million
(2014: EUR –18 million; 2013: EUR –105 million).
Net trading income relates to trading assets and trading liabilities which include assets and liabilities that are classified under IFRS-EU
as ‘Trading’ but are closely related to servicing the needs of the clients of ING. ING offers institutional and corporate clients and
governments products that are traded on the financial markets. A significant part of the derivatives in the trading portfolio are related
to servicing corporate clients in their risk management to hedge for example currency or interest rate exposures. In addition, ING
provides its customers access to equity and debt markets for issuing their own equity or debt securities (‘securities underwriting’).
Although these are presented as ‘Trading’ under IFRS-EU, these are directly related to services to ING’s customers. Loans and
receivables in the trading portfolio mainly relate to (reverse) repurchase agreements, which are comparable to collateralised
borrowing (lending). These products are used by ING as part of its own regular treasury activities, but also relate to the role that ING
plays as intermediary between different professional customers. Trading assets and liabilities held for ING’s own risk are very limited.
From a risk perspective, the gross amount of trading assets must be considered together with the gross amount of trading liabilities,
which are presented separately on the balance sheet. However, IFRS-EU does not allow netting of these positions in the balance sheet.
Reference is made to Note 4 ‘Financial assets at fair value through profit and loss’ and Note 18 ‘Financial liabilities at fair value through
profit and loss’ for information on trading liabilities.
The majority of the risks involved in security and currency trading is economically hedged with derivatives. The securities trading
results are partly offset by results on these derivatives. The result of these derivatives is included in Derivatives trading results.
ING Group’s trading books are managed based on internal limits and comprise a mix of products with results which could be offset. The
results are presented in various lines within the profit and loss account. Reference is made to Note 20 ‘Interest result’.
In 2015, Net trading income - Derivatives trading results includes EUR 98 million CVA/DVA adjustments on trading derivatives,
compared with EUR –205 million CVA/DVA adjustment in 2014 (2013: EUR 243 million).
Net trading income
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