Erik Dralans

1
Focused for Growth

• Erik Dralans
• CEO ING SWE

6 May 2008 www.ing.be
2
Introduction

• ING Group
• Listed on Amsterdam, Brussels and New York Stock
  exchanges
• Involved in financial services
• Group holding company with two subholdings
• ING Bank NV
• ING Verzekeringen NV
• Organised by business lines
• Governed by a two-tier Board structure
• Executive Committee
• Supervisory Board
• Voting principle one share, one vote

3
Key Points
Trends

• Key consumer trends are driving strong growth in
  savings as well as convergence of financial
  products
• ING is fundamentally well positioned to
  capitalise on changes in the industry
• INGs strategy, focusing on banking, investments,
  life insurance and retirement services, offers
  strong long-term growth potential
• Working on new key performance indicators to
  reflect the essence of our business and delivery
  on our strategy
• Plays an important role in implementing the Group
  strategy

Well positioned
Strategy
KPIs
ING Belgium
4
People are living longer and need to take more
responsibility for their own retirement
People are living longer
Populations are aging around the
globe(Percentage population age 60)
(Retirement age versus life expectancy in US)
80

78
45
2000 2050
Life expectancy
76
40
74
35
30
72
25
70
20
68
15
66
10
Retirement age
64
5
0
62
World
US
Japan
Germany
Italy
NL
Poland
China
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source United Nations, 2007

• Demographics are driving growth in global savings
  worldwide
• Government pension funds no longer sustainable
• People need to take control of their financial
  future

5
Total global savings pool is growing at 7.3 per
year, and seen accelerating with growth led by
developing markets
Global retail financial balances (in EUR
trillion)
Asia Pacific (Excl Japan / Australia)
7.3
13
Central Eastern Europe
16
Latin America
11
CAGR 2007E-2016E
Source McKinsey
Includes current accounts, savings,
investments, mutual funds, consumer finance,
mortgages, pensions and life insurance
6
Technology is transforming the distribution of
financial services
Shift to bank technology/onlineGlobal internet
usage growth (millions of users)
Number of client contacts in the Netherlands (mln)
1,320
Total number of clients
817
Direct contacts
598
361
147
Bank visits
36
Source McKinsey
Source www.internetworldstats.com

• Technology is transforming the distribution of
  financial services, improving convenience for
  customers and cost efficiency for banks
• In this more flexible environment customer
  service, value for money, trust and a strong
  brand are crucial to keeping the customer
  relationship

7
The life insurance industry is undergoing a
paradigm shift
Shift to investment-linked
Shift to bank distribution
(Share of life premium by product group)
(Percentage of life insurance products sold
through bank channel)
Mature Europe
Asia
Central and Eastern Europe
Traditional Life
88
80
Investment-linked
65
69
70
58
65
2000
60
60
2005
56
52
52
42
50
48
48
50
47
35
40
40
30
22
23
12
21
18
20
13
11
7
10
5
2
1986
2006
2002
2007E
2002
2006
1
1
0
0
0
United States
South Korea
Hungary
India
China
S. Korea
NL
Poland
Spain
Belgium
Hungary
Czech Rep
Source McKinsey
Source McKinsey

• Life insurance is undergoing a paradigm shift
  from traditional life to investment products
• These products are moving more into the domain of
  banking
• Life insurance is being distributed more and more
  through bank channels, which are more
  cost-effective
• Banks own the customer relationship, and insurers
  will become increasingly dependent on banks for
  distribution

8
These trends are driving growth and changes in
the financial services industry
Roll-over into retirement income stream
Annuities
Personalequity
Pensions
Retirement Services
Unit-linked investments
Mutual funds
Life insurance
Increase savings
Mortgages
Saving accounts
Longer retirement
Current accounts
Accumulation phase
Retirement income phase
Time
Customers can save in many different ways the
distinction between banking and insurance
products is no longer relevant
There is one customer savings pool
9
Key Points
Trends

• Key consumer trends are driving strong growth in
  savings as well as convergence of financial
  products
• ING is fundamentally well positioned to
  capitalise on changes in the industry
• INGs strategy, focusing on banking, investments,
  life insurance and retirement services, offers
  strong long-term growth potential
• Working on new key performance indicators to
  reflect the essence of our business and delivery
  on our strategy
• Plays an important role in implementing the Group
  strategy

Well positioned
Strategy
KPIs
ING Belgium
10
ING is well positioned to capitalise on changes
in the industry
Strategic Flexibility
Flexibility to capture a larger share of savings
pool
Products Scale
Products for the customers life cycle
Distribution
Innovator in distribution
Presence
Strong presence in the most attractive markets
Brand

• Global brand

11
ING has the flexibility to enter markets in
different ways to capture a share of the savings
pool
ING has the strategic flexibility to enter
markets in different ways depending on market
circumstances to capture a larger share of the
total savings pool and grow from there

• Pensions
• Second-pillar pension reform is creating
  attractive opportunities, particularly in
  developing markets
• ING is No. 1 pension provider in Central Europe,
  No. 2 in Latin America
• 1.4 million new customers added in Romania
  following reforms in 2007
• Purchase of Santander pension business in Latin
  America brings AuM for the region to EUR 36
  billion

• Built the worlds largest direct bank with EUR
  300 billion in balances and 20 million customers

• Variable annuities
• Experience developed in US market
• Exported to Japan, where ING now ranks No. 3 in
  the market for SPVAs with EUR 13 billion in AuM
• Beginning rollout in Europe, with Spain and
  Hungary launched in 2007

• Turkey is a large, fast-growing market
• Retail Banking asset pool is much larger than
  life insurance pool, and growing faster
• Retail Lending is growing at 37 per year, retail
  savings at 18
• Strategy to enter Turkey through retail banking
  and add products from there

12
and has the right products to meet customers
changing needs, with global scale in core products
Current accounts
Savings Deposits
Mortgages
Lifeinsurance
Institutional AM Mutual Funds
Annuities retirement services
Other Lending
EUR 82 bln
EUR 344 bln
EUR 229 bln
EUR 207 bln
EUR 79 bln
EUR 206 bln
EUR 295 bln
All figures per year end) Includes Wholesale
Banking

• ING offers the full range of products for every
  stage of the customers life cycle
• ING can export product expertise from one market
  to another (VA, pensions)
• ING has the strategic flexibility to do what
  works in each market
• ING has global scale, with EUR 1,442 billion in
  client balances and 75 million customers worldwide

INGs strengths
13
including a leading position among the worlds
top savings banks
48
EUR billion, top 20 global banks, 2006 FY
Savings Retail savings and C/A deposits volume
1,195
685
302
296
294
242
237
219
217
212
207
203
178
155
154
143
131
129
106
112
Excl. UBS, BNP Paribas, ABN AMRO, Credit Suisse
(savings data not available) Includes also
corporates Source McKinsey
13
14
ING has a track record for innovation in
distribution
Traditional branches
Advice-oriented branches Standard transactions by internet
NetherlandsBelgiumPolandTurkeyIndia
mijnpostbank.nl visited by 1 mln retail customers on weekdays 3rd most visited website in the Netherlands
SelfBank branches
Low-cost franchise formula Greenfield used to expand for banking markets in development
RomaniaUkraine (2008)
4 market share achieved in Romania in 3 years
Direct Banking
Internet-based bank Greenfield used to expand for in mature banking markets with high internet penetration
9 Countries
Leading direct bank in the world with 20.3 million customers
We have also built a strong agent and broker
distribution network in mature and developing
markets
15
ING has a strong presence in the most attractive
developing markets
Developing Markets savings and investment pools
(EUR trillion), CAGR
Source McKinsey
Central Eastern Europe
Asia Pacific (excl Japan/Australia)
13.0
17.5
No. 2 foreign life insurerNo. 2 fund
managerActive in 10 countriesEUR 53 bln in AuM

• Leading positions in pensions and life in Asia,
  Central Europe and Latin America
• Retail banking presence in the most important
  markets of Central Europe Asia

16
and strong positions in todays largest markets
Large Markets savings and investment pools (EUR
trillion), CAGR
Source McKinsey
North America
Japan
North America, Western Europe, Japan and
Australia account for more than 90 of all
personal finance balances
5.6
4.6
Leading US annuity and retirement services
playerEUR 176 bln in AuM 8 million ING Direct
customers
EUR 18 bln in AuMNo. 1 in COLINo. 3 in SPVA
Australia
Western Europe
8.8
6.2
No. 3 life insurerNo. 4 superannuation and fund
managementEUR 17.7 bln in AuM1.3 mln ING Direct
customers
Leading life insurer and retail bank in
Benelux EUR 106 bln in AuM 11 mln ING Direct
customers
17
ING has one of the worlds leading retail
financial brands

• ING has created a leading global brand, No. 81 on
  Interbrand league table
• One of only 12 financial services brands in
  global top 100
• Global television coverage of F1 sponsorship
  helped increase brand awareness around the world,
  especially Central and Eastern Europe and Asian
  markets key regions for INGs growth strategy
• Total brand awareness rose from 69 to 74
• Sponsorship is generating many fruitful business
  leads and significant new business

ING Survey
18
Key Points
Trends

• Key consumer trends are driving strong growth in
  savings as well as convergence of financial
  products
• ING is fundamentally well positioned to
  capitalise on changes in the industry
• INGs strategy, focusing on banking, investments,
  life insurance and retirement services, offers
  strong long-term growth potential
• Working on new key performance indicators to
  reflect the essence of our business and delivery
  on our strategy
• Plays an important role in implementing the Group
  strategy

Well positioned
Strategy
KPIs
ING Belgium
19
Its all about savings
The retail financial services industry is simply
about attracting savings and putting that to work
for our customers to earn an attractive return
Asset gathering
ING has chosen to focus on the areas that offer
the fastest growth potential
Focus on growth potential

• Focus on banking, investments, life insurance and
  retirement services
• Emphasis on mass-affluent customers
• Increase retail banking distribution
• More in developing markets
• Supported by two core competencies asset
  management and asset generation

20
Focus on the most attractive segments Banking,
investments, life insurance and retirement
services
5.8
7.3
7.3
7.8
7.1
8.1
7.7
6.5
7.9
CAGR
Retail banking and wealth accumulation products
account for two-thirds of total retail financial
balances, growing at 7 to 8 per year
Source McKinsey
21
Emphasis on mass-affluent customers
Retail financial balances (EUR bln) and CAGR
6.8
The mass and affluent market represents 2/3 of
global financial balances
Source McKinsey
22
Increase retail banking distribution
The World's 20 biggest economies (in USD billion)
13,794
4,346
3,259
3,249
2,756

• ING has a retail banking footprint in the nine
  largest economies of the world and in 75 of the
  top 20 countries.
• ING takes a pragmatic approach to bank
  distribution

2,515
2,068
1,415
1,406
1,295
1,224
1,090

• Own bank channels full service retail bank
• Selfbanks Entry strategy for developing markets
• ING Direct Entry strategy for mature markets
• Strategic Stakes Bank of Beijing, TMB
• Exclusive distribution agreements and joint
  ventures
• Open architecture

950
890
886
755
482
443
432
414
ING Direct
Stake
Retail Banking
Source IMF, September 2007 planned
23
More expansion in developing markets for
long-term growth
Retail financial balances in developing markets
(EUR bln) and CAGR
12.8
11.4
12.6
16.4
CAGR
Developing markets showing strong growth in
retail balances as economies develop and middle
classes grow
Source McKinsey
24
. Supported by 2 core capabilities asset
management and asset generation
Strong growth in total Assets under
Management (in EUR bln)
Total assets EUR 1,312 bn
700
7.2
600
293 bn
Corporate Lending 265
500
400
300
553 bn
200
78 bn
Personal Lending 261
100
61 bn
0
2007
2002
2003
2004
2005
2006
Insurance 28
327 bn

• ING has the asset management skills to generate
  attractive returns for our clients
• Top 25 global asset manager, active in 30
  countries
• Worlds leading real estate investment manager

• ING also has the ability to generate its own
  assets to manage its balance sheet effectively
• Wholesale Banking generates high-quality assets,
  including corporate lending, leasing, structured
  finance
• ING controls origination and credit quality

25
INGs mission and strategic priorities
17
Mission
Trends
Strategy
Priorities
Strengths
Products
Setting the standard in helping our customers
manage their financial future

• ING is sharpening its strategic focus to
• Banking
• Investments
• Life insurance
• Retirement services
• Supported by two core capabilities
• Asset management
• Asset gathering

People are living longer and need to take more
responsibility for own retirement
Retail (mass affluent) clients
People are becoming richer
Distribution
Technology is transforming distribution of
financial services
Bank distribution
Brand
Customers are demanding value for money and
simplicity.
Developing markets
Trust is key
Existing presence in developing markets
Life insurance paradigm shift from traditional
to investment products
26
In Summary

• The life insurance industry is undergoing a
  paradigm shift to investment products
• Differences between banking and insurance are
  becoming irrelevant. There is one savings and
  investment pool

Its all about savings

• ING is well positioned to capture a larger share
  of the total savings pool
• Strategic flexibility to enter markets in the way
  that works and grow from there
• Right products to meet customers needs through
  life cycle
• Strong presence in the most attractive developing
  markets
• Strong positions in todays large markets
• Strong global brand

Well-positioned

• ING is focused on the fastest growing segments of
  this market
• Mass affluent
• Banking, investments, life insurance, retirement
  services
• Retail banking distribution
• Developing markets

Focused on growth
27
Key Points
Trends

• Key consumer trends are driving strong growth in
  savings as well as convergence of financial
  products
• ING is fundamentally well positioned to
  capitalise on changes in the industry
• INGs strategy, focusing on banking, investments,
  life insurance and retirement services, offers
  strong long-term growth potential
• Working on new key performance indicators to
  reflect the essence of our business and delivery
  on our strategy
• Plays an important role in implementing the Group
  strategy

Well positioned
Strategy
KPIs
ING Belgium
28
Measuring the delivery on our strategy
The KPIs 4 Group-wide metrics
Client Balances

• Measuring our underlying business volume

Expenses (and efficiency)

• IFRS Operating Expenses and margin over client
  balances
• Measuring our operating efficiency

Profit (and margin)

• Underlying Profit Before Tax
• Disclosure will include a margin based on profit
  to client balances measuring our profitabiltiy

Required Capital (and return)

• Economic Capital and Return on Economic Capital,
  measuring the return on capital employed

29
ING Belgium, an important part of ING Group
Net Profit before Tax

• With shares of 16 and 27 of the Retail and
  Wholesale banking activities, ING in Belgium
  accounts for 1/5th of ING Group banking
  activities and 1/10th of ING Group as a whole
• ING Group employs 120.000 employees servicing
  more than 75 million customers in over 50
  countries

30
Enjoys a good level of autonomy

• Structures adapted to  Code Lippens 
• Executive Board
• Audit Remuneration Committee
• Five external Board members
• Gives input in Group / functional strategy
  settings
• ING Belgium is responsible for implementing
  strategy / policy and adapting them to local
  markets and environment
• In charge of controlling coherence with local
  rules and regulations

31
translating ING strategy locally coherently

• Strengthening savings gathering
• drive to increase share of savings pool
• Innovation in distribution
• Transformation of traditional retail bank into a
  universal direct bank (direct when possible,
  advice when necessary)
• Launch of online products
• Leader in asset gathering
• Mortgages /consumer loans
• Important lender to the corporate sector

32
Conclusion

• Comprehensive ( easy ) corporate strategy
  supported by a strong brand
• ING Belgium solid positioning and clear role

33
Questions answers