Operating conditions were challenging in 2011, as financial markets continued to be volatile and the macroeconomic environment deteriorated further in the second half of the year. The prolonged weakness of the economic recovery and its impact on local and capital markets were especially prominent in the fourth quarter. Despite this difficult context, ING Group’s full-year results improved compared with 2010. Underlying net profit for 2011 was EUR 3,675 million, up from EUR 3,192 million a year earlier.

For the fourth quarter of 2011, ING Group posted an underlying net loss of EUR 516 million, reflecting lower results at the Bank and a loss at Insurance mainly due to the charge for the previously announced US Closed Block VA assumption changes, as well as hedge losses. ING Group’s quarterly net profit was EUR 1,186 million, supported by gains from divestments and from the liability management transactions executed in December 2011.

ING Bank recorded a fourth-quarter underlying profit before tax of EUR 793 million compared with EUR 1,428 million a year ago and EUR 1,031 million in the third quarter of 2011. Results were down substantially from both prior periods reflecting EUR 214 million of impairments on debt and equity securities (of which EUR 133 million was re-impairments on Greek government bonds), EUR 79 million of realised losses from selective de-risking at ING Direct, and higher risk costs. The net interest margin was 1.42%, up five basis points from the previous quarter—primarily due to a recovery in Financial Markets—but down five basis points relative to a year ago. Expenses declined from the fourth quarter of 2010, but rose from third-quarter levels.

Although competition for savings increased in the fourth quarter, ING Bank continued to show strong deposit growth with funds entrusted rising by EUR 8.1 billion (excluding currency impacts). The net inflow of funds entrusted at Retail Banking was EUR 5.6 billion, of which EUR 3.2 billion was at ING Direct and EUR 2.5 billion at Retail Netherlands, supported by year-end campaigns. Commercial Banking reported a EUR 2.6 billion net increase in funds entrusted.

Residential mortgage net production was EUR 3.9 billion, driven primarily by ING Direct. The moderate growth was consistent with low market demand, as well as ING’s policy to selectively grow this lending class while maintaining pricing discipline. The overall demand for other lending remained subdued given the challenging macroeconomic

environment. As a result, other lending showed a EUR 4.0 billion net decrease as a EUR 4.8 billion decline at Commercial Banking was only partly offset by EUR 0.8 billion of net growth in Retail Banking.

The operating result of ING Insurance improved year-on-year, rising 20.4% to EUR 478 million on a higher investment margin, lower interest expenses, and lower administrative expenses due to a non-recurring expense reduction in the US. Compared with the third quarter of 2011, the operating result was down 9.3%, primarily due to lower fees and premium-based revenues.

The fourth-quarter underlying result before tax of Insurance was EUR -1,348 million. The loss was due mainly to the EUR 1,099 million charge for the US Closed Block VA assumption changes announced in December 2011, as well as EUR 348 million of losses on hedges focused on protecting regulatory capital in the Benelux and the US.

Insurance sales (APE) rose 3.0% year-on-year, or 4.6% on a constant currency basis, driven by growth in Asia/Pacific, Central and Rest of Europe, and the Benelux. On a sequential basis, APE at ING Insurance was 0.6% lower, or down 3.1% excluding currency effects, primarily due to seasonally lower sales in Asia/Pacific.

ING Group’s quarterly net profit was EUR 1,186 million compared with EUR 130 million in the fourth quarter of 2010 and EUR 1,692 million in the third quarter. The fourth-quarter underlying effective tax rate was 12.4%.

Fourth-quarter net results included EUR 1,288 million of gains on divestments, of which EUR 995 million was attributable to the Latin American Insurance businesses and EUR 265 million to the sale of Real Estate Investment Management in Europe and Asia. Net results from divested units and discontinued operations totalled EUR 10 million. Special items after tax amounted to a gain of EUR 403 million. The EUR 718 million gain from the liability management transaction executed in December 2011 was partially offset by costs for various restructuring programmes, including EUR -118 million for the Retail Netherlands change programme (announced in November 2011) and EUR -67 million for strategic repositioning initiatives at Commercial Banking. After-tax separation and IPO preparation costs were EUR 85 million in the quarter and EUR 202 million for the full-year 2011, well within the previously announced amount of EUR 250 million after tax.

The quarterly net profit per share for ING Group was EUR 0.31 compared with EUR 0.03 in the fourth quarter of 2010 and EUR 0.45 in the third quarter. The average number of shares used to calculate earnings per share over the fourth quarter was 3,784 million, unchanged from the third quarter. The Group’s underlying net return on IFRS-EU equity was 8.7% for the full-year 2011.

The fourth quarter of 2011 was marked by a deepening of the European sovereign debt crisis, ongoing financial market volatility and negative sentiment for the short-term economic outlook. These challenging conditions inevitably impacted the Bank’s results. Although the net interest margin rose on a sequential basis to 1.42%, pressure on interest results remained, particularly on savings. Risk costs increased both year-on-year and from the third quarter, reflecting the uneven economic recovery. Investment income was also adversely affected by the difficult environment, leading to negative market impacts including re-impairments on Greek government bonds. The total Greek government bond portfolio has now been written down by almost 80%.

Total underlying income fell 13.6% compared with the fourth quarter of 2010 to EUR 3,704 million. The decline was primarily caused by EUR 133 million of re-impairments on Greek government bonds, EUR 81 million of impairments on other debt and equity securities, as well as EUR 79 million of realised losses from selective de-risking at ING Direct. The fourth quarter of 2010 included EUR 30 million of impairments next to a EUR 189 million capital gain on the sale of an equity stake in Fubon Financial Holding. Excluding the aforementioned items, income declined by 3.2% versus the fourth quarter of 2010. Compared with the third quarter of 2011, total income was 2.3% lower.

The interest result decreased 2.5% from the fourth quarter of 2010, but it rose 3.9% from the third quarter of 2011. The increase was largely due to higher net interest income

in Financial Markets, which fuelled a five basis-point widening of the total interest margin to 1.42%. Nevertheless, margins remained under pressure as wholesale funding costs and deposit rates increased. In the Benelux, the pressure on savings margins was especially prominent in the Netherlands; however, this was partly compensated by higher margins on lending. ING Direct’s total interest margin declined versus the third quarter, reflecting margin compression in most countries stemming from the low interest rate environment and increased competition. Margins in the Commercial Banking lending books improved slightly on the previous quarter.

Underlying operating expenses were 2.8% lower than in the fourth quarter of 2010. In addition to stringent cost control, the decline also reflected lower deposit insurance premiums, IT expenditures and performance-related personnel expenses. These factors more than offset a modest year-on-year increase in staff costs and impairments on software and goodwill. The impairments, combined with

higher marketing costs from year-end campaigns in several countries, lifted operating expenses 2.4% from the third quarter of 2011. The fourth-quarter underlying cost/income ratio was 64.3%, or 58.2% excluding market impacts.

Additions to loan loss provisions rose compared with both the third quarter of 2011 and the fourth quarter of 2010. The 21.3% increase from the third quarter was mainly attributable to higher additions for the mid-corporate and SME segments in the Benelux, as well as some specific files in General Lending. At Commercial Banking, risk costs rose mainly because of these specific files, but they were lower in Structured Finance. Risk costs at ING Direct declined, mainly in Germany and the US. Total risk costs in the fourth quarter rose to 65 basis points of average risk-weighted assets versus 55 basis points in the third quarter of 2011 and 51 basis points in the fourth quarter of 2010. For the full year, underlying risk costs were 52 basis points of average risk-weighted assets, one basis point below the level observed in 2010. Excluding ING Direct USA, which is pending divestment, fourth-quarter 2011 risk costs were 61 basis points of average risk-weighted assets. Given the uncertain economic environment, ING Bank expects additions to loan loss provisions to remain elevated at around similar levels for the coming quarters.

Retail Baking’s underlying result before tax declined 40.9% from a year earlier to EUR 473 million. The interest result was 4.9% lower than in the fourth quarter of 2010, mostly due to lower interest results in the Netherlands caused by margin pressure on both lending and savings. Some margin pressure was also observed in most ING Direct countries. Investment income deteriorated, mainly reflecting EUR 100 million of re-impairments on Greek government bonds and EUR 49 million of impairments on US RMBS at ING Direct. Other income was negative, largely because of losses from selective de-risking at ING Direct and from a EUR -45 million adjustment in the valuation of derivatives related to the German mortgage book. Risk costs rose both year-on-year and sequentially, primarily reflecting higher provisioning for the mid-corporate and SME segments in the Benelux. Additionally, when compared with the third quarter, risk costs for the Dutch mortgage portfolio were somewhat higher in the fourth quarter of 2011. Operating expenses declined 2.1% from the fourth quarter of 2010 but rose 4.5% from the previous quarter due to higher marketing expenses. Compared with the third quarter of 2011, Retail Baking’s underlying result before tax fell 41.2%.

The underlying result before tax of Commercial Banking excluding ING Real Estate was EUR 426 million, down 18.1% from the fourth quarter of 2010. This was primarily due to higher risk costs for increased provisioning in Structured Finance, General Lending, and Leasing and Factoring. Income decreased 5.0%, mainly due to lower

commission income in Structured Finance from a decline in new transactions, and lower income in Other Products. The interest result was flat compared with the fourth quarter of 2010. Expenses declined year-on-year, reflecting lower accruals for performance-related costs. Compared with the third quarter of 2011, the underlying profit before tax more than doubled, supported by the strong recovery of Financial Markets income and lower impairments on Greek government bonds.

ING Real Estate recorded an underlying loss before tax of EUR 50 million compared to a profit in the four preceding quarters. The fourth-quarter loss was mainly caused by negative revaluations, partly related to the sale of investments in line with ING’s strategy to reduce the investment portfolio, and higher loan loss provisions in Real Estate Finance, mainly in the Netherlands and Spain.

Corporate Line Banking’s underlying result before tax was EUR -56 million compared to EUR 59 million in the fourth quarter of 2010. The decline was mainly attributable to the EUR 189 million capital gain on the sale of the equity stake in Fubon Financial Holding in the fourth quarter of 2010.

The net result of the Bank was EUR 1,253 million including EUR 265 million of net gains on the divestments of ING Real Estate Investment Management Europe and Asia, as well as EUR -19 million of operating results from these divested units. Special items after tax totalled EUR 428 million and consisted of EUR 647 million of net gains on the liability management transaction completed in December 2011 and EUR -218 million related to strategic change programmes in Retail Netherlands and Commercial Banking. Special items also included additional costs for the merger of the Dutch retail activities, the Belgian transformation programme and costs related to the separation of Banking and Insurance.

The full-year 2011 underlying return on IFRS-EU equity was 10.0% compared with 12.9% in 2010. Impairments on Greek government bonds recorded in 2011 accounted for 1.2 percentage points of the year-on-year decline. The Ambition 2015 target for return on IFRS-EU equity is 10-13%. ING Bank’s full-year 2011 underlying return on equity, based on a 10% core Tier 1 ratio, was 10.9%.

The fourth-quarter underlying result before tax at Insurance was severely impacted by the EUR 1,099 million charge for assumption changes in the US Closed Block VA. The underlying result also reflects EUR 348 million of losses on hedges focused on protecting regulatory capital amid volatile financial markets. The operating result was EUR 478 million, up 20.4% from the fourth quarter of 2010 due to a higher investment margin, lower administrative expenses and lower interest costs. Compared with the third quarter of 2011, the operating result declined 9.3%, mainly due to lower fees and premium-based revenues and slightly higher administrative expenses.

The operating result from Life Insurance and Investment Management rose 4.4% from the fourth quarter of 2010 to EUR 526 million. This increase was driven by a higher investment margin and lower expenses. Compared with the third quarter of 2011, the operating result declined 6.9%, mainly due to lower fees and premium-based revenues and despite an increase in the technical margin.

The investment margin climbed 15.5% from the fourth quarter of 2010 to EUR 440 million, attributable to higher

results from real estate investments and lower profit sharing in the Benelux. The fourth quarter of 2010 also contained negative non-recurring items which lowered the investment margin in that quarter. These factors, in combination with the beneficial impact of reinvestments in the first half of 2011 and higher dividend income received compared to 2010, lifted the four-quarter rolling average investment spread to 106 basis points. On a sequential basis, the investment margin declined 2.4%, mainly reflecting de-risking actions in the Benelux and lower dividend income from private equity and real estate. In 2012, the investment spread is expected to decline gradually, reflecting lower yields on bonds resulting from de-risking actions mainly effected in the second half of 2011.

Fees and premium-based revenues declined 3.2% from the fourth quarter of 2010. In the US Closed Block VA, fees and premium-based revenues declined reflecting lower assets under management and higher hedging and reserve costs, and in Central and Rest of Europe they were lower due to pension fund regulatory changes in Poland and Hungary. In Asia/Pacific, fees and premium-based revenues rose on sales growth in Japan, Hong Kong and Korea. Compared with

the third quarter of 2011, fees and premium-based revenues were 3.3% lower, mainly due to the US Closed Block VA and the Benelux.

The technical margin was EUR 171 million, compared with EUR 199 million in the fourth quarter of 2010. The decline was primarily caused by lower results in the Benelux and the US, which were partially offset by higher results in the US Closed Block VA and Asia/Pacific. The technical margin increased by EUR 35 million, or 25.7%, from the third quarter of 2011. This was largely due to improved mortality and morbidity results in Japan and Korea. Furthermore, the previous quarter included an addition to guarantee provisions in the Benelux.

Life Insurance and Investment Management administrative expenses declined 4.9% year-on-year to EUR 725 million, reflecting ongoing cost control and the positive impact of non-recurring expense items. The primary non-recurring item was a EUR 45 million expense reduction in the US stemming from a change to ING’s US employee pension plan. This more than offset the one-time provision for executing a compensation programme for customers with unit-linked products in the Benelux, as well as higher project costs in Central and Rest of Europe and Asia/Pacific. Compared with the third quarter of 2011, expenses rose 2.5%, or 0.7% excluding currency effects.

The non-life operating result of ING Insurance was EUR 39 million, compared with EUR 50 million in the fourth quarter of 2010. The decrease was primarily caused by higher claims in Disability & Accident in the Benelux. The non-life operating result was flat versus the previous quarter.

The Corporate Line operating result improved to EUR -88 million from EUR -157 million a year ago. This was mainly due to lower interest payments on hybrids since December 2010 and the discontinuation of Group core debt expense allocation to Insurance as from 1 January 2011.

Insurance posted a fourth-quarter underlying loss before tax of EUR 1,348 million. The quarterly loss was primarily due to the change in policyholder behaviour assumptions in the US Closed Block VA as well as losses on hedges focused on protecting regulatory capital.

Gains/losses and impairments on investments were EUR 16 million. The result for the current quarter includes EUR 179

million of capital gains and losses on the sale of debt securities and public equity in Europe and commercial mortgage-backed securities in the US, both resulting from de-risking and other investment portfolio management actions to protect regulatory capital. Greek government bonds were re-impaired by EUR 66 million and equity impairments were EUR 65 million in the quarter. The total Greek government bond portfolio has now been written down by almost 80%.

Revaluations were EUR -282 million, of which EUR -182 million was a loss on equity options put in place to protect regulatory capital and EUR -65 million was caused by revaluations on private equity and alternative assets.

Market and other impacts amounted to EUR -1,561 million, including the previously announced EUR 1,099 million charge for the US Closed Block VA actuarial assumption changes. The assumptions were updated for lapses, mortality, annuitisation and utilisation rates, with the most significant revision coming from the adjustments of lapse assumptions. The impact of the assumption adjustments includes a charge to restore the reserve adequacy to the 50% confidence level for the US Closed Block VA. Market and other impacts also included EUR 258 million of hedge losses (net of reserve changes) in the US Closed Block VA, and a EUR -247 million change in the provision for separate account pension contracts (net of hedging) in the Benelux.

The fourth-quarter net result of ING Insurance was EUR -68 million, including the EUR 995 million gain on the sale of the Latin American pension, life insurance and investment management operations, the EUR 26 million gain on the sale of Investment Management Australia, and a EUR 29 million net result from discontinued operations in Latin America. Special items after tax totalled EUR -25 million and mainly included costs related to restructuring programmes and separation expenses, as well as the EUR 71 million profit from the liability management transaction executed in December 2011.

Insurance sales (APE) rose 3.0% year-on-year, or 4.6% at constant currencies. Sales in Asia/Pacific were up 10.9%, driven by Japan, Malaysia, Hong Kong and China. In Central and Rest of Europe, APE grew 14.8%, partly due to higher life sales in Hungary. In the Benelux, APE rose 14.1% on higher corporate pension sales. At Insurance US, APE declined, reflecting lower Stable Value and Fixed Annuity sales, while Full Service Retirement Plans and Individual Life product sales rose. On a sequential basis, Insurance sales were down 0.6%, or 3.1% excluding currency impacts.

ING Group’s balance sheet was reduced by EUR 3 billion to EUR 1,279 billion in the fourth quarter. Excluding currency effects, the decrease was EUR 25 billion, due to lower trading assets and lower amounts due from banks. The decrease in trading assets, primarily at Financial Markets, was attributable to a decline in reverse repos and derivatives, and lower trading securities resulting from de-risking actions. ING Group’s balance sheet will be reduced further, by EUR 62 billion, following the sale of ING Direct USA which is currently reflected in assets/liabilities held for sale.

Shareholders’ equity rose to EUR 46.7 billion (or EUR 12.33 per share). This was mainly due to the EUR 1.2 billion fourth-quarter profit and positive exchange rate differences.

ING Bank’s core Tier 1 ratio was stable at 9.6% despite a EUR 10 billion increase in risk-weighted assets (RWA) mainly resulting from the implementation of the Capital Requirements Directive III. RWAs were EUR 330 billion at the end of 2011. Core Tier 1 capital rose by EUR 1 billion, primarily driven by retained earnings including the net gain from the divestments of ING Real Estate Investment Management Europe and Asia.

The restated Insurance Groups Directive (IGD) ratio increased slightly to 225% at year-end from 224% at the end of September 2011. Both available capital and required capital increased mainly due to currency effects resulting in a slight increase of the IGD ratio. The change in the capital base also includes a net gain of EUR 1 billion on the sale of ING’s

pension, insurance and investment management activities in Latin America as well as a EUR 1.1 billion charge on the US Closed Block VA following an assumption review during the quarter. The calculation of required capital changed in the fourth quarter; previous periods are restated accordingly.

The Group debt/equity ratio decreased to 12.7% at year-end from 13.4% at the end of September. Adjusted equity of ING Group remained unchanged as the impact of higher shareholders’ equity and lower regulatory adjustments were offset by the reduction of EUR 2.7 billion in hybrid securities resulting from the liability management transaction in December 2011. Group core debt decreased from EUR 8.5 billion to EUR 7.9 billion, mainly as a consequence of the same liability management transaction.

ING’s policy is to pay dividends in relation to the long-term underlying development of cash earnings. Dividends will only be paid when the Executive Board considers such a dividend appropriate. Given the uncertain financial environment, increasing regulatory requirements and ING’s priority to repurchase the remaining outstanding core Tier 1 securities, the Executive Board will not propose to pay a dividend over 2011 at the annual General Meeting in May 2012.

As announced on 13 January 2012, ING intends to resume dividend payments on common shares when all remaining core Tier 1 securities have been repaid to the Dutch State and Basel III requirements have been met.

ING strives to build its banking and insurance businesses on sound business ethics and good corporate citizenship to ensure customer loyalty, employee engagement and satisfactory returns for shareholders. To support this commitment, ING has embedded social, ethical and environmental criteria into its financing and investment policies and business ambitions. ING aims to ensure that its strategic decision-making is always based on financial and non-financial performance objectives.

Meeting customer needs

To meet the growing demand for environmentally and socially responsible investment products, ING Investment Management launched the ‘ING (L) Renta Fund – Euro Credit Sustainable’ in the fourth quarter. This fund invests in euro-denominated debt securities issued by companies that pursue sustainable development policies while applying strict social and environmental principles. Sustainable development is also at the core of ING’s sustainable product offering for equity strategies. In 2011, the ‘ING Duurzaam Aandelen Fonds’ (Sustainable Equity Fund) was the best-performing Dutch sustainable equity fund, beating its benchmark, the MSCI Developed Markets World Index.

ING’s commitment to sustainability and social responsibility includes efforts to continuously improve customer service. An example of this is the reduction of the administrative workload in the Payments & Cash Management (PCM) business, one of ING Commercial Banking’s core products. In 2011, ING PCM launched a project to lighten the administrative burden for both clients and ING staff who handle complex international assignments. In the fourth quarter of 2011, this resulted in significant process improvements: the number of documents required to be sent to clients for large PCM transactions was halved and the number of client signatures required for such transactions fell 50-75%.

Our efforts to provide customers with exemplary service and products gained recognition in several countries across Central Europe. In Poland, for example, our insurance operations won in 2011 for the second year in a row the ‘Friendly Insurance Company’ award from a leading financial publication for providing the best customer service during the term of policy, as well as for the handling and payout of claims. In the Czech Republic, ING’s ‘Smart’ life insurance product was named ‘Best Insurance Product 2011’ by financial advisory service provider Fincentrum.

Contributing to communities

With around 97,000 employees in more than 40 countries, ING wants to make a positive contribution to the communities it is part of. In particular, informing the public how finance works is one of ING’s high priorities. ING aims to empower people of all ages to achieve financial independence and become self-sufficient individuals, in

particular by investing in education. ING Chances for Children, a partnership with UNICEF, is the main programme through which ING supports quality educational programmes for children worldwide. In November and December 2011, ING employees volunteered a record 42,757 hours, an increase of nearly 10,000 hours from 2010, to support children in their education as part of the so-called ING Global Challenge.

During the fourth quarter, German retail bank ING-DiBa used social media to engage the public in its community investment activities. Through the ‘DibaDu und Dein Verein’ programme, ING-DiBa sponsored 1,000 non-profit associations with EUR 1,000 each. Interested associations could register on ING-DiBa’s homepage and the public voted on which associations should receive the funding. Over 17.5 million votes were cast for the 19,000 registered associations. The programme enabled ING-DiBa to sponsor a wide range of good causes related to culture, sports and children, while raising its profile beyond its base of seven million customers.

Creating an inclusive corporate culture

ING continuously strives to create the right working environment and strengthen its performance culture. ING promotes diversity and aims to build an inclusive corporate culture in which the differences of its employees are embraced. In recognition of these efforts, ING in the US received for the sixth year in a row a 100% score by the Human Rights Campaign Foundation on its 2012 Corporate Equality Index. The index assesses 850 American companies on their efforts at achieving lesbian, gay, bisexual and transgender equality in the workplace.

Participating in the dialogue on the future of finance

To earn and maintain the trust of customers and other stakeholders, it is important that ING continuously engage its stakeholders and align commercial and business decisions with its societal responsibilities. This is especially relevant in light of the ongoing global debate about the future of the financial industry. In October and November 2011, ING actively participated in a series of plenary debates organised by leading Dutch academics called the ‘Sustainable Finance Lab’. During these sessions, ING executives explained that ING supported measures that will contribute to a more stable financial system, such as higher capital buffers and more sustainable remuneration structures. ING also voiced concerns about the possible compounding of new regulations. Particularly given major societal challenges—for example, those associated with ‘greening’ the energy supply and sustaining the Dutch healthcare system—ING argued that, in restructuring the regulatory framework, regulators need to take into account the role of large financial institutions like ING in meeting the financing and investment needs related to these challenges.