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MISSION, PROFILE, STRATEGY
ANNUAL REPORT 2003
 
BUILDING ON THE CLIENTS’ TRUST
Mission
ING’s mission is to be a leading, global,
client-focused, innovative and low-cost pro-
vider of financial services through the distri-
bution channels of the client’s preference in
markets where ING can create value.
Profile
ING Group is a global financial institution of
Dutch origin with 115,000 employees. ING
offers banking, insurance and asset manage-
ment to more than 60 million clients in over
50 countries. The clients are individuals,
families, small businesses, large corporations,
institutions and governments. ING comprises
a broad spectrum of prominent businesses
that increasingly serve their clients under
the ING brand.
Key to ING’s retail business is its distribution
philosophy of ‘click-call-face’. This is a flexi-
ble mix of internet, call centres, intermedia-
ries and branches that enables ING to deliver
what today’s clients expect: unlimited access,
maximum convenience, immediate and accu-
rate execution, personal advice, tailor-made
solutions and competitive rates. ING’s who-
lesale product offering focuses strongly on
its strengths in employee benefits/pensions,
financial markets, corporate banking and
asset management.
ING’s strategy is to achieve sustainable
growth while maintaining healthy profitabi-
lity. The Group’s financial strength, its broad
range of products and services, the wide
diversity of its profit sources and the good
spread of risks form the basis for continuity
and growth.
ING seeks a careful balance between the
interests of its stakeholders: its customers,
shareholders, employees and society at large.
It expects all its employees to act in accor-
dance with the Group’s Business Principles.
Strategic objectives*
ING Group’s strategic objectives are as follows:
1. Strengthen the capital base and improve
other key ratios to maintain a solid
financial foundation.
2. Optimise the existing portfolio of busi-
nesses.
3. Create value for the clients with a multi-
product/multi-channel approach.
4. Develop ING’s special skills – direct bank-
ing, insurance in developing markets,
employee benefits and pensions.
5. Further lower the cost base.
* for more information see page 22.

Table of contents

  • Page 1
    ... services, the wide diversity of its profit sources and the good spread of risks form the basis for continuity and growth. Profile ING Group is a global financial institution of Dutch origin with 115,000 employees. ING offers banking, insurance and asset management to more than 60 million clients...

  • Page 2
    ... 96 97 98 99 00 01 02 03 O P E R AT I N G P R O F I T in millions of euros EMPLOYEES average number 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 94 95 96 97 98 99 00 01 02 03 Operating net profit Operating profit before tax 120,000 110,000 100,000 90,000 80,000 70,000...

  • Page 3
    ... euros) Total assets Shareholders' equity 779 21 716 18 705 22 650 25 493 35 ASSETS UNDER MANAGEMENT (in billions of euros) 463 39 449 32 513 57 503 83 345 58 MARKET CAPITALI SATION (in billions of euros) OPERATING INCOME (in millions of euros) Insurance operations Banking operations...

  • Page 4

  • Page 5
    ... EXECUTIVE BOARD 18 Financial highlights 22 Group strategy and Outlook 24 ING Europe 28 ING Americas 32 ING Asia/Pacific 35 Asset Management 38 ING Direct 40 ING in Society 42 Human Resources 44 Risk management 4 7 F I N A N C I A L I N F O R M AT I O N 47 Auditor's report 48 Summary annual figures...

  • Page 6
    ... Direct, insurance in developing markets and pensions as ING's specialities - 'Bank of the Year' in the field of corporate social responsibility - Modernisation of ING's corporate-governance structure - Successful ING Globerunners Programme - Leaving behind a solid company with an international team...

  • Page 7
    ... before the Shareholders' Meeting. As you know, we are also working hard on building our brand. We want to create one strong ING brand and become one of the leading international brand names. Last year, we made progress in achieving this goal. The success of ING Direct certainly contributed to this...

  • Page 8
    ...over attempts by maintaining the independent trust, which votes for all shares that are not represented in the Shareholders' Meeting. See also the chapter on corporate governance starting on page 68. United Kingdom US and Canada The Netherlands Belgium Luxembourg Switzerland Germany Other 25 23 19...

  • Page 9
    ... the Swiss exchanges and the New York Stock Exchange. Depositary receipts for preference shares are listed on the Euronext Amsterdam Stock Market. Warrants B are listed on the Euronext Amsterdam and Brussels Stock Markets. Short-term and longterm options on ING Group depositary receipts for ordinary...

  • Page 10
    ... to both publications through the ING Group website, www.ing.com. To be kept informed on press releases and other ING news, you can subscribe to the e-mail service on www.ing.com. For more information, please contact: ING Group Investor Relations Department (IH 07.362) Shareholders' Bulletin is...

  • Page 11
    ... outside directors. Under the Executive Board, three regionally oriented Executive Centres and a global platform for asset management are responsible for managing the business units. ING Europe delivers banking, insurance and asset-management services to retail, corporate and institutional clients...

  • Page 12
    ... offer a guarantee for a safe future. ING has a long-standing reputation as a life insurer. Since 1863, National Life Insurance Bank, one of ING's founding companies, started gaining experience with the development and sale of lifeinsurance products. Another of ING's predecessors, 'the Netherlands...

  • Page 13
    ... in business since 2001. The joint venture sells its life-insurance products via the branches of ING Vysva Bank and a tied-agent force of over 800 insurance advisors. Thailand is a promising growht market, where ING sells life insurance through tied agents and offers asset-management services. ING...

  • Page 14
    ...and fast as possible. ING Direct started in 1997 in Canada. In the last few years, 8.5 million customers in 8 countries around the world have discovered that ING Direct offers them great rates, easy to understand products, maximum freedom and optimum convenience. 10 Annual Report 2003 · ING Group

  • Page 15
    ... Germany. The growth of ING Direct UK has been spectacular. In nearly eight months it attracted over 305,000 clients and EUR 11.5 billion in funds entrusted. ING Direct cafés offer coffee and high interest rates on savings as well as a tangible presence. ING Direct's average overall aided brand...

  • Page 16
    ... for current and future generations. ING's pension business encompasses all financial instruments that are intended to secure a stable retirement income such as life insurance, annuities, pension funds, 401K and related retirement saving plans, long-term savings, mortgages and mutual funds. ING also...

  • Page 17
    ... fastest growth in retirement savings. With a population of 1.3 billion, China is a market with substantial long-term potential. PALIC, ING's joint venture with China Pacific Insurance Company, offers life-insurance and annuity products in Shanghai and Ghangzhou. Annual Report 2003 · ING Group 13

  • Page 18
    ...large-company regime and to give the holders of depositary receipts unrestricted voting rights. These decisions are in line with the Dutch corporate-governance code (Tabaksblat Code) and will give shareholders more say. More meetings The Supervisory Board met five times with the Executive Board and...

  • Page 19
    ... of ING Netherlands and the sale of various business units. The general management of several business units gave presentations on the developments in Asia/Pacific as well as the global pensions strategy, which is one of ING's worldwide commercial spearheads. The American insurance activities...

  • Page 20
    ...of the Executive Board and the member of the Executive Board responsible for Management Development and Human Resources. Composition of the Executive Board In the previous annual report, we informed you about the retirement of a member of the Executive Board as per 1 July 2003. The present chairman...

  • Page 21
    ... This annual report contains the report of the Executive Board and a summary of the annual accounts. The full annual accounts as drawn up by the Executive Board have been reviewed by the Supervisory Board and signed by all members of both Boards. The annual accounts are available at www.ing.com...

  • Page 22
    ... Netherlands. banking units in ING Europe and the insurance units in ING Americas. ING Direct attracted some 1,700 new staff (including Entrium employees) to handle the strong growth of its business. Staffing levels of the insurance operations in a number of developing markets as well as in Canada...

  • Page 23
    ...and dividend income and the negative impact of the strong euro. On the positive side, lower investment losses, higher stock-market indices, higher realised capital gains on real estate and ongoing cost control contributed to the life insurance profit before tax. Non-life insurance profit before tax...

  • Page 24
    ..., compared with EUR 519 million in 2002. The decrease is primarily due to lower sales and lower pricing targets, which are attributable to lower interest rates. As in 2002, ING Asia/Pacific generated more than half of the total value of new life-insurance business created by the group, indicating...

  • Page 25
    ... 2003. An optional stock dividend was re-introduced and ING sold part of its equity and real-estate holdings to reduce debt. ING also successfully issued two new subordinated perpetual loans in Europe and the US. To protect the capital levels from stock-market decline, ING has hedged EUR 4.0 billion...

  • Page 26
    ... Netherlands Antilles and Aruba), ING Sviluppo in Italy, ING Life Indonesia and its share in the AnShin Card Services Company (Taiwan). Furthermore, the international wholesale branch network was restructured. We also announced the management buy-out of Baring Private Equity Partners. Create value...

  • Page 27
    Group Strategy and Outlook lion. In the United States, ING Bank has formed a commercial alliance with Bank of New York aimed at marketing, sales and delivery of global custody and related services to international clients. A strong brand enhances trust among customers. In 2003, ING made further ...

  • Page 28
    ... in Europe was delayed. ING Europe responded by focussing on its existing business and by putting value before growth. The client approach was refined and improved, while high priority was given to cost control and risk management. ING Europe's operating profit before tax rose by 32.8%. Strategy and...

  • Page 29
    ...life insurance, asset-management and private-banking activities. ING will continue to service the Italian retail market via ING Direct. I N S H O RT Operating profit before tax up by 33% to EUR 4,305 million - Cost containment and good risk management paid off - Retail bank in core European markets...

  • Page 30
    ...trading businesses. Financial Markets wants to continue this strong performance and give full support to the client-oriented strategy of ING Wholesale. To do so, additional investments have been made into developing a much closer alignment between product specialists and client relationship managers...

  • Page 31
    ...time. With its strong position in Central Europe, ING hopes to profit from this enlargement of the European Union. ING Private Banking has started to invest in a number of key developing markets where we believe there are significant growth opportunities, including India, China and Korea. ING Europe...

  • Page 32
    ... key positions in insurance, asset management and retirement services. In this region, ING serves more than 33 million customers, 14.4 million of which are in the United States. In the US market, ING has a top-five position in life insurance and retirement services. In Canada, ING is the number-one...

  • Page 33
    ...US Financial Services In the United States, ING US Financial Services (USFS) comprises businesses offering an array of products and services to retail and institutional clients, including retirement programmes, annuities, life insurance, employee benefits, mutual funds and financial planning. Early...

  • Page 34
    ... platform in the Americas - ING Re rated as one of the topthree reinsurers by life insurers in 2003 - ING New York City Marathon raised ING brand awareness to a high point - ING introduced the 'Client Service Guarantee' in Canada - Balancing profitability and market share will remain key...

  • Page 35
    ... profitability and market share. The focus is on execution: building customer-oriented businesses, strengthening the ties with customers and distributors, managing costs effectively, attracting and keeping inspired employees and further improving the IT infrastructure. Annual Report 2003 · ING...

  • Page 36
    ...-owned companies, ING's operations include a number of joint ventures with local partners. We have over six million retail clients and 60,000 points of distribution. Our portfolio comprises Australia, Japan, Korea, Malaysia, Hong Kong, Taiwan and the activities in the developing markets of China...

  • Page 37
    ...-annuity providers in Japan. ING's pensions joint venture with Principal Financial Group of USA is the number-seven pensions provider in the country. ING is the number-three life insurer in Malaysia with over one million retail clients. It is also the number-four provider of employee benefits...

  • Page 38
    ... will require management focus and strategic input. Regulatory changes in the pensions area are expected to create new business opportunities in various countries in the region. Expanding bancassurance ING's bancassurance initiatives showed good successes in Japan, Korea, Australia, Hong Kong and...

  • Page 39
    ... 65 mutual funds (31% of the funds with a star rating) represent a total of EUR 14.4 billion and show ING's strong position in the mutual-fund market. ASSETS UNDER MANAGEMENT B Y C L I E N T C AT E G O R Y in billions of euros ING Investment Management ING Investment Management (ING IM) benefited...

  • Page 40
    ... positions. ING IM serves private clients, institutional clients and ING's insurance subsidiaries. ING IM was able to take advantage of the rebound of the equity markets and a number of its businesses enjoyed good growth in assets and client numbers. In Europe, ING IM enhanced its product offering...

  • Page 41
    ...Partners (BPEP) for a management buy-out. While ING continues to regard private equity as an attractive asset class to invest in, this agreement is in line with ING's strategy to focus on its core business. ING Trust specialises in trust services and the formation and management of companies for tax...

  • Page 42
    ...low cost. It offers its clients best value for money and excellent service via call centres, direct mail and the internet. This strategy has been successful to date and was acknowledged by the financial services research group Lafferty with the 'World's leading direct bank award' in 2003. ING Direct...

  • Page 43
    ...of eight business units were profitable: Canada, Australia, Spain, USA and Germany. ING Direct's savings business in Canada, the US and Australia already exceeded the ING Group pre-tax RAROC hurdle rate of 18.5%. (RAROC measures performance on a risk-adjusted basis. For further information, see page...

  • Page 44
    ... general procurement terms and conditions with ethical clause ING's strategy. As a global financial-services provider, ING is active on all of the world's major capital markets and handles millions of daily transactions. As an asset manager, ING invests billions of euros on behalf of pension funds...

  • Page 45
    ... investor relations and that managing ethical, social and environmental risks has a positive impact on long-term market value. Conversely, unethical behaviour can cause serious financial and reputation damage. Breaches of business principles can have a direct negative impact on the Group's capital...

  • Page 46
    ... an employer offer the best products and services to its customers. Financial services are first and foremost a people business and ING relies heavily on its intellectual capital. It is the responsibility of Corporate Human Resources & Management Development to develop and execute ING's overarching...

  • Page 47
    ... the leadership of women in these times. It provided a good networking opportunity and was highly rated by the attending men and women. ING feels business can take the whole agenda a big step forward if it works together with other companies, governments and educators by sharing best practices in...

  • Page 48
    ... credit risk. L A R G E S T E C O N O M I C E X P O S U R E S B Y C O U N T RY developing-markets transfer risk as a percentage of total retail and wholesale lending activities 2002 amounts in billions of euros 2003 Netherlands United States Germany United Kingdom Belgium France Spain Canada...

  • Page 49
    Risk Management driven parameters. The average credit rating of the general account fixed-income portfolios is shown in the table. RISK CLASSES ING BANK 1 in % of total outstandings 2003 2002 MOODY'S E Q U I VA L E N T MOODY'S E Q U I VA L E N T Debtor provisioning For insurance credit risks, a...

  • Page 50
    ... Annual Accounts. This information is also available on www.ing.com. LIQUIDITY RISK Liquidity risk is defined as the risk that ING cannot meet its financial liabilities when due. Liquidity risk is managed at Group and local level through a combination of investment mandates, product features, close...

  • Page 51
    ... profit before tax. The section Additional information includes information about RAROC, embedded value, capital base, efficiency ratios and credit ratings. The complete Annual Accounts and related Other information are published as a separate document in conformity with the statutory requirements...

  • Page 52
    ... Shareholders' equity * Preference shares of group companies Third-party interests Group equity 21,331 1,783 1,730 24,844 18,254 2,146 1,959 22,359 Subordinated loans 3,252 28,096 2,412 24,771 General provisions Insurance provisions * Funds entrusted to and debt securities of the banking...

  • Page 53
    ... after tax 5,877 1,490 4,387 5,921 1,089 4,832 Third-party interests Net profit for the period amounts in euros 344 4,043 332 4,500 Net profit per share Basic profit per share Diluted profit per share 2.00 2.00 2.32 2.32 Dividend per ordinary share 0.97 0.97 Annual Report 2003 · ING Group...

  • Page 54
    ... of share capital and distributions to shareholders. Realised revaluations previously recognised in shareholders' equity are released from shareholders' equity to the profit and loss account. As these revaluations have already been included in comprehensive net profit of the year under report and...

  • Page 55
    ...euros 2003 2002 Summary annual figures Profit before tax Adjusted for: - increase in insurance provisions - additions to the provision for loan losses - other Loans and advances granted/repaid Trading portfolio purchases/sales (incl. securities and property) Net investment in tangible fixed assets...

  • Page 56
    ...to EUR 532 million and is charged to Shareholders' equity. In 2002, ING Group and ANZ, one of Australia's major banks, have formed a funds management and life insurance joint venture called ING Australia. The company is 51%-owned by ING and 49%-owned by ANZ. The joint venture has been proportionally...

  • Page 57
    ...LEN DING ANALYSED B Y SE C UR I T Y NETHERLANDS INTERNATIONAL TOTAL NETHERLANDS INTERNATIONAL TOTAL 2003 2002 Loans to or guaranteed by public authorities Loans secured by mortgages Loans guaranteed by credit institutions Other personal lending Other corporate loans 6,473 94,125 701 7,009 36...

  • Page 58
    ... of goodwill Net profit for the period Dividend paid Exercise of warrants and options Issue of shares -853 -145 4,043 -1,995 -5,435 -1,176 4,500 -1,969 -2 1,977 21,281 17,432 822 18,254 Changes in ING Groep N.V. shares held by group companies Closing balance 50 21,331 INSURANCE PROVISIONS BREA...

  • Page 59
    NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT amounts in millions of euros Summary annual figures PREMIUM INCOME BREAKDOWN PR EMIUM INCO M E 2003 2002 Premium income from life insurance policies Premium income from non-life insurance policies 38,231 7,288 45,519 44,367 7,917 52,284 ...

  • Page 60
    ... from land and buildings Income from investments in shares and convertible debentures Income from investments in fixed-interest securities: - debentures - private loans - mortgage loans - policy loans - deposits with credit institutions - professional loans - other Deposits with insurers 110 822...

  • Page 61
    ... 799 1,722 SEGMENT REPORTING ING Group evaluates the results of its segments using financial performance measures called operating profit before tax and operating (net) profit. Operating (net) profit is defined as (net) profit excluding: - capital gains and losses on equity securities, - the impact...

  • Page 62
    ... 344 4,053 332 3,433 TOTAL INCOME O PERATING INC OME B Y GE O G R A P HI C A L A R E A INSURANCE OPERATIONS BANKING OPERATIONS ELIMINATIONS TOTAL 2003 2002 2003 2002 2003 2002 2003 2002 Netherlands Belgium Rest of Europe North America Latin America Asia Australia Other 12,345 2,947...

  • Page 63
    ... 1. Including disability insurance products. O PERATING R ESULT B EFOR E TA XAT I O N B Y G E O G R A P HI C A L A R E A INSURANCE OPERATIONS BANKING OPERATIONS TOTAL 2003 2002 2003 2002 2003 2002 Netherlands Belgium Rest of Europe North America Latin America Asia Australia Other 1,471...

  • Page 64
    ... AT I O N S ( E XC L . I N G D I R E C T ) B Y M A N A G E M E N T C E N T R E ECONOMIC CAPITAL RAROC (PRE-TAX) (IN BILLIONS OF EUROS) 2003 2002 2003 2002 MC Netherlands MC South-West Europe MC Germany MC Central Europe MC UK/Americas/Asia Other Total banking operations 43.5% 21.8% -3.4% 11...

  • Page 65
    ... compared to the euro, and a lowered expectation of future investment returns. NEW BUSINESS VA LUE amounts in millions of euros ANNUAL PREMIUMS SINGLE IRR 1 PREMIUMS VALUE ANNUAL SINGLE IRR 1 VALUE 2003 2002 Netherlands South-West Europe Central Europe Americas Asia/Pacific ING Group...

  • Page 66
    ... in millions of euros Reported embedded value 2002 Investment return on free surplus Value of new business Required return Financial variances Operational variances Discount rate changes Assumption changes Currency effects (Dividends) and capital injections Other Ending embedded value 2003 23,279...

  • Page 67
    ... insurance products. Certain business units have included the cost of options and guarantees in the reported results. The major businesses for which these costs are already directly included are variable annuities with guaranteed benefits sold in the US and Japan, Australia's life insurance business...

  • Page 68
    ... BASE BREAKDOWN C APITAL B AS E Finacial information in millions of euros GROUP INSURANCE BANK GROUP INSURANCE BANK 2003 2002 Shareholders' equity Preference shares of group companies Subordinated loans Capital base ING Group 21,331 1,783 3,252 26,366 18,254 2,146 2,412 22,812 Core...

  • Page 69
    ...POSITION OF ING B A N K Additional information in millions of euros 2003 2002 Shareholders' equity Third-party interests 1 14,868 553 469 2 14,664 744 428 1,336 1,233 -136 -189 18,080 Capital and reserves of Stichting Regio Bank Subordinated loans qualifying as Tier-1 capital Fund for general...

  • Page 70
    ... (external) subordinated loans of ING Bank N.V. and ING Verzekeringen N.V. are included. Finacial information REG U LATORY R EQUIR ED C A P I TA L I N G G R O UP in millions of euros 2003 2002 Shareholders' equity Preference shares of group companies Subordinated loans Capital base ING Group 21...

  • Page 71
    ... underwriting profit to be added to income from investments. BREA KDOWN EFFIC IENC Y R AT I O S O F ( O P E R AT I O N A L ) B A N KI N G A CT I V I T I E S in % 2003 2002 Total banking operations (excluding ING Direct and the restructuring provision) 68.4 71.0 CREDIT RATINGS Credit ratings are...

  • Page 72
    ... the principles and provisions of best practice in respect of depositary receipts. You are referred to the Trust Office's own report on this subject on page 76. Changes in 2003 ING Group is already in compliance with much of the Code. A number of significant changes relating to corporate governance...

  • Page 73
    ... for a management board member who is dismissed during his first term of office, such board member shall be eligible for a severance pay not exceeding twice the annual salary." ING is prepared to take this best practice into account as a reference for new Executive Board members, provided however...

  • Page 74
    ... the preference shares are used solely for funding purposes. The shares, which are all registered shares, are not listed on a stock exchange. Depositary receipts Over 99% of the issued ordinary and preference shares are held by the Trust Office ING Shares. The 70 Annual Report 2003 · ING Group

  • Page 75
    ...the size and market value of ING Groep N.V., proposals to put items on the Shareholders' Meeting agenda can only be made by shareholders and holders of depositary receipts representing a joint total of 1 per mille of the share capital. Given the periods of notice required for proxy voting, proposals...

  • Page 76
    ...Board of ING Group: September 1996. Joined ING in 1996. Former position: President of VNO-NCW (Confederation of Netherlands Industries and Employers). Main responsibilities: ING Asia/Pacific, Information Technology, Human Resources & Management Development, Procurement, Real Estate. EXECUTIVE BOARD...

  • Page 77
    ...the Management Committee for South-West Europe, with responsibility for Financial Markets and Wholesale Banking, and a member of the Board of ING Belgium S.A. Eli Leenaars is chairman of ING Central Europe and a member of the Executive Committee ING Europe. Hans Verkoren is Global Head of ING Direct...

  • Page 78
    ... receipts for shares in the company for long-term investment purposes. If any members of the Supervisory Board were granted ING option rights during their previous membership of the Executive Board, these option rights will be part of the ING stock option plan. The rules applying within ING Group...

  • Page 79
    ... the Executive Board of ING Bank and ING Group. First appointment to the Supervisory Board of ING Group: April 2001, one year after his retirement from the chairmanship of the ING Group Executive Board. Current term of office: until the 2005 AGM. Other directorships of listed companies: - Member of...

  • Page 80
    ... in the financial-services industry and his expertise as Chief Financial Officer and board member of a multinational company. EXTERNAL AUDITORS Ernst & Young and KPMG Accountants were appointed auditors of the ING Group for an unspecified period of time at the General Meeting of Shareholders on 24...

  • Page 81
    ... of its duties and objectives. Prior to its meeting of 1 December 2003 the Executive Board and Supervisory Board of ING Group provided the Stichting with information on the company's activities and performance over the first nine months of the reporting year. The Board subsequently met without the...

  • Page 82
    ... of the total issued share capital of ING Groep N.V. If new shares other than cumu- Statement of independence The Board of Stichting Continuïteit ING and the Executive Board of ING Groep N.V. hereby declare that in their joint opinion the requirements concerning the independence of the members of...

  • Page 83
    ... the base salary, senior management members enjoyed benefits similar to most other employees of ING Group. These include benefits like private medical insurance, the use of company cars and, if applicable, expatriate allowances. - Long-term incentive (LTI) in stock options and/or performance shares...

  • Page 84
    ... be conditionally granted. The number of shares that will ultimately be awarded at the end of a 3-year performance period depends on the ING Group performance. The Supervisory Board decided to use Total Shareholder Return over three years (return in the form of capital gains and reinvested dividends...

  • Page 85
    ... peer group counterparts. Key recommendations from the report included that in order to close the gap, in particular the variable (performance-driven) pay component should be increased. Employment contract for newly appointed Board members The contract of employment for new Executive Board members...

  • Page 86
    ... share). The actual number of stock options and provisional performance shares to be granted to the Executive Board members will be based on the performance over the financial criteria used to determine the short-term incentive award (i.e. Group profit, expenses and return on economic capital...

  • Page 87
    ...the fair market value of the long-term incentive award using the Black and Scholes methodology (assuming a share price of EUR 20 for 2003), granted to the board for performance over the year specified. PENSION COSTS OF THE INDIVIDUAL MEMBERS AND FORMER MEMBERS OF THE EXECUTIVE BOARD (1) amounts in...

  • Page 88
    ...granted to other members of the Executive Board I N...number of options OUTSTANDING AS AT 31 DECEMBER 2002 OUTSTANDING AS AT 31 DECEMBER 2003 amounts in euros GRANTED IN 2003 WAIVED OR EXPIRED IN 1 2003 EXERCISE PRICE... at vesting date or expired at expiry date. 84 Annual Report 2003 · ING Group

  • Page 89
    ... for the Group performance should again be measured using the same three financial criteria as in 2003: net operating profit, total operating expenses and return on economic capital, equally weighted. The targets set are challenging. ING Group shares held by members of the Executive Board As at...

  • Page 90
    ... 1,716 1,616 6,000 1,716 1,616 6,000 1,890 5,276 1,510 16,487 4,970 1,510 15,812 14,476 4,970 1. ING Group shares of direct family included; members of the Supervisory Board (including direct family) not mentioned in this table did not hold ING Group shares. 86 Annual Report 2003 · ING Group

  • Page 91
    ...' equity. The fair values have been determined by using an option-pricing model. This model takes the risk-free interest rate into account, as well as the expected life of the options granted, the expected volatility of the depositary receipts for ING Group shares and the expected dividends. STOCK...

  • Page 92
    ... euros FINANCIAL YEAR ORIGINAL NUMBER OF OPTIONS OPTIONS OUTSTANDING AS AT 1 JANUARY 2003 OPTIONS OUTSTANDING AS AT 31 DECEMBER 2003 EXERCISE PRICE IN EUROS ... 9 0 ,2 9 1 1 0 0 ,5 2 5 500 83,187,633 1 2 .5 5 1 2 .6 5 1 4 .2 4 1 4 .5 4 1 8 .3 2 1 8 .3 8 1 8 .6 3 88 Annual Report 2003 · ING Group

  • Page 93
    ... 27.05 30.26 27.54 EMPLOYEES Opening balance Granted Exercised Expired Transferred from the Executive Board Closing balance 1 84,620,784 19,...value of the stock options at the time they were granted would have been recognised in the profit and loss account. Annual Report 2003 · ING Group 89

  • Page 94
    ... CEO BT Group, United Kingdom Eckart Wintzen, Managing Director Ex'tent, the Netherlands ING GROUP ADVISORY COUNCIL as at 1 January 2004 The ING Group Advisory Council advises the Executive Board regarding strategic, social and policy issues or developments that are relevant to ING. EUROPEAN WORKS...

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    Annual Report 2003 · ING Group 91

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    ... AND PRODUCTION ING Groep N.V., Corporate Communications, Amsterdam - DESIGN AND DPP Total Identity bv, Amsterdam - PHOTOGRAPHY ING Groep N.V. Amstelveenseweg 500, 1081 KL Amsterdam P.O. Box 810, 1000 AV Amsterdam The Netherlands Telephone +31 20 5415411 Fax +31 20 5415444 Internet: www.ing.com...

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    ... confidential information. 2 . E M P LOYE E R E LAT ION S Relationships with employees in all parts of ING are based upon respect for the individual. The Group aims to provide all its employees with safe conditions of work, and competitive terms of employment. ING is committed to equal opportunities...

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    ... the best returns for its customers, investors and employees, as well as for the countries and territories where it operates. Criteria for credit and investment decisions are primarily economic and, while respecting the wishes of clients, also take into account a range of social and environmental...

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    ...; Annual Report ING in Society, in Dutch and English; Annual Accounts, in Dutch and English; Annual Report on Form 20-F, in English (in accordance with SEC guidelines). These publications are available on www.ing.com. The publications can be ordered on the internet: www.ing.com/group, button ING...

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