SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 6-K

Commission File Number 1-14642

ING Groep N.V.

Amstelveenseweg 500

1081-KL Amsterdam

The Netherlands

     Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F þ       Form 40-F o

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T rule 101(b)(1): o

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     Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.

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If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b).

 

 

This Report contains a copy of the following:

(1)

The Press Release issued on May 5, 2011.

		CORPORATE COMMUNICATIONS
PRESS RELEASE		5 May 2011

ING posts solid increase in underlying net profit to EUR 1,492 million

•		ING Group’s underlying net profit growth was driven by continued strong performance in the Bank and a significant improvement in Insurance results. The Group’s 1Q11 net result was EUR 1,381 million, or EUR 0.37 per share, including divestments and special items. The underlying return on equity improved to 14.7% (Bank 13.7%, Insurance 6.2%).
•		Bank underlying result before tax rose 32.2% to EUR 1,695 million, fuelled by higher income and the continued normalisation of risk costs. The net interest margin remained healthy at 1.44%. Risk costs declined to EUR 332 million, or 42 bps of average RWA. The underlying cost/income ratio improved to 55.0% as expenses declined from 4Q10.
•		Insurance operating result increased 35.5% to EUR 561 million, supported by higher sales and growth in AuM. The investment spread rose to 95 bps. Sales (APE) grew 11.4% versus 1Q10, or 8.0% excluding currency effects. The administrative expenses/operating income ratio improved to 40.0% on higher operating income and cost containment.
•		Strong capital generation in ING Bank continued in 1Q11 with the Bank’s core Tier 1 ratio increasing to 10.0%. ING will proceed with the planned repurchase of EUR 2 billion of core Tier 1 securities from the Dutch State on 13 May 2011. The total payment will amount to EUR 3 billion and includes a 50% repurchase premium.

“Both the Bank and the Insurance company posted strong results in the first quarter, illustrating clear progress on their respective performance improvement programmes as they prepare for their futures as stand-alone companies,” said Jan Hommen, CEO of ING Group. “The restructuring of the Group is on track. We continue to work towards the full physical separation of the banking and insurance activities, and we are laying the groundwork this year for two IPOs of our US and European & Asian insurance businesses so that we will be ready to proceed with transactions when market conditions are favourable. We continue to explore strategic options for our Latin American insurance business, and we are taking steps to meet the other restructuring demands imposed by the European Commission, including the divestment of ING Direct USA and the carve-out of WestlandUtrecht Bank from our Dutch retail banking business.”

“Despite the far-reaching restructuring that the company is going through, we have continued to show solid commercial growth across our franchises, which is a testimony to the dedication and professionalism of our staff as we work hard to maintain the loyalty of our customers. On that strong foundation, we have been able to show a rapid recovery as ING comes out of the financial crisis. We have improved efficiency and built up strong capital buffers in the Bank, while continuing to increase our lending to customers to support the economic recovery. As a result, ING is now in a position to repay a second tranche of support from the Dutch State out of retained earnings. And provided that this strong capital generation continues, we aim to repay the remaining support by May 2012 on terms that are acceptable to all stakeholders.”

KEY FIGURES

			1Q2011				1Q20101				Change					4Q20101				Change
ING Group key figures (in EUR million)
Underlying result before tax Group				2,156				1,403				53.7	%				671				221.3	%
of which Bank				1,695				1,282				32.2	%				1,479				14.6	%
of which Insurance				461				121				281.0	%				-808
Underlying net result				1,492				923				61.6	%				341				337.5	%
Net result				1,381				1,230				12.3	%				130				962.3	%
Net result per share (in EUR)2				0.37				0.33				12.1	%				0.03				n.a.
Total assets (end of period, in EUR billion)				1,229				1,236				-0.5	%				1,247				-1.4	%
Shareholders’ equity (end of period, in EUR billion)				40				38				5.7	%				41				-2.0	%
Underlying return on equity based on IFRS-EU equity3				14.7	%			10.3	%								3.3	%
Banking key figures
Interest margin				1.44	%			1.42	%								1.47	%
Underlying cost/income ratio				55.0	%			57.4	%								57.2	%
Underlying risk costs in bp of average RWA				42				60									51
Core Tier 1 ratio				10.0	%			8.4	%								9.6	%
Underlying return on equity based on IFRS-EU equity3				13.7	%			11.7	%								13.5	%
Insurance key figures
Operating result (in EUR million)				561				414				35.5	%				438				28.1	%
Investment margin / life general account assets (in bps)				95				84									93
Administrative expenses / operating income (Life & ING IM)				40.0	%			43.4	%								44.1	%
Underlying return on equity based on IFRS-EU equity3				6.2	%			0.8	%								-15.7	%

 

The footnotes relating to 1-3 can be found on page 13 of this press release.
Note:		Underlying figures are non-GAAP measures and are derived from figures according to IFRS-EU by excluding impact from divestments and special items.

ING GROUP CONSOLIDATED RESULTS

ING Group posted an underlying net profit of EUR 1,492 million in the first quarter, driven by another strong quarter of results at ING Bank and a significant improvement in performance at ING Insurance.

The Bank’s underlying result before tax was EUR 1,695 million, up 32.2% from the first quarter of 2010 and 14.6% sequentially. The net interest margin remained healthy, while lending volumes grew moderately, consistent with the subdued demand for credit. Risk costs declined from both comparative periods, trending towards more normalised levels. The impact of the continued focus on cost control also supported results.

ING Bank’s net production of client balances was positive for the seventh straight quarter and amounted to EUR 11.9 billion. Retail Banking funds entrusted grew by EUR 12.5 billion, fuelled by a net inflow of EUR 8.5 billion at ING Direct (primarily in Germany and the US) and EUR 2.0 billion in Central Europe, mainly driven by the introduction of the ‘Orange Savings Account’ in Turkey. Retail Benelux recorded a EUR 1.6 billion net inflow in funds entrusted, primarily due to the success of the ‘Orange Book’ savings account in Belgium and an increase in savings in the Netherlands, which more than offset lower current account balances. Commercial Banking reported a EUR 12.1 billion net outflow in funds entrusted, showing a seasonal effect following strong net inflow in the fourth quarter, when corporate treasurers and asset managers deposited large balances in short-term deposits over year-end. The outflow was partly offset by an increase in overnight deposits (not included in client balances). The net production of residential mortgages was EUR 4.6 billion, while other lending showed a net production of EUR 4.9 billion attributable to continued growth in Structured Finance and Retail Central Europe.

Operating profit at ING Insurance improved substantially. It increased to EUR 561 million, 35.5% higher than the first quarter of 2010 and 28.1% higher than the fourth quarter of 2010. Results in the quarter benefited from strong fees and premium-based revenues due to robust sales in Asia/ Pacific, the Benelux and the US, as well as higher fees at Investment Management. The investment spread advanced to 95 basis points, reflecting the impact of portfolio actions taken in 2010. The first-quarter underlying result before tax rose to EUR 461 million, as market-related impacts diminished both year-on-year and sequentially, despite the impact of impairments on debt securities in the quarter.

Insurance sales (APE) increased 11.4% from the first quarter of 2010, or 8.0% excluding currency effects, reflecting strong sales momentum in Japan and Korea, corporate pension contract renewals in the Benelux, and higher retirement plan and individual life sales in the US.

ING Group’s first-quarter net profit was EUR 1,381 million compared with EUR 1,230 million in the same quarter of last year and EUR 130 million in the previous quarter, which included a DAC write-down in the US Closed Block VA business.

Divestments and special items in the first quarter totalled EUR -111 million after tax and related primarily to various restructuring programmes. After-tax separation costs were EUR 20 million, out of total estimated separation costs of EUR 200 million for 2011.

The underlying effective tax rate was 29.2% in the quarter.

The net profit per share was EUR 0.37. The average number of shares used to calculate earnings per share over the quarter was 3,782.3 million.

The Group’s underlying net return on IFRS-EU equity improved to 14.7%.

BANKING

Banking key figures

			1Q2011				1Q2010				Change					4Q2010				Change
Profit and loss data (in EUR million)
Underlying interest result				3,396				3,263				4.1	%				3,514				-3.4	%
Underlying income				4,508				4,178				7.9	%				4,424				1.9	%
Underlying operating expenses				2,481				2,399				3.4	%				2,530				-1.9	%
Underlying addition to loan loss provision				332				497				-33.2	%				415				-20.0	%
Underlying result before tax				1,695				1,282				32.2	%				1,479				14.6	%
Key figures
Interest margin				1.44	%			1.42	%								1.47	%
Underlying cost/income ratio				55.0	%			57.4	%								57.2	%
Underlying risk costs in bp of average RWA				42				60									51
Risk-weighted assets (end of period, in EUR billion, adjusted for divestm.)				316				331				-4.4	%				321				-1.5	%
Underlying return on equity based on IFRS equity1				13.7	%			11.7	%								13.5	%
Underlying return on equity based on 7.5% core Tier 12				20.3	%			15.1	%								19.2	%

 

1		Annualised underlying net result divided by average IFRS-EU equity.
2		Annualised underlying, after-tax return divided by average equity based on 7.5% core Tier 1 ratio.

ING Bank showed continued strength in the first quarter, as underlying profit before tax rose 32.2% from the previous year and 14.6% from the fourth quarter to EUR 1,695 million. First-quarter results benefited from a healthy interest margin, higher client balances, lower risk costs and cost control.

Total underlying income rose 7.9% from the first quarter of 2010, driven by higher interest results and a marked improvement in investment and other income, partly due to lower impairments on debt securities. This strong year-on-year increase in income was primarily attributable to ING Direct and Commercial Banking. Income was up 1.9% from the previous quarter, which included the gain on the sale of the equity stake in Fubon Financial Holding.

The interest result held up well, rising 4.1% from the previous year due to growth in client balances and an increase in the interest margin of two basis points to 1.44%. Compared with the fourth quarter, the interest result declined 3.4% due to a narrowing of the interest margin by three basis points. This was primarily caused by pressure on mortgages and savings, especially in the Netherlands. Margins in the mid-corporate and SME segments in the Netherlands were flat, but improved slightly in most other countries. The interest margins of General Lending and Structured Finance held up well compared with the fourth quarter.

Underlying operating expenses rose 3.4% from a year ago to EUR 2,481 million, mainly due to higher staff costs, increased marketing and IT project costs and higher contributions to deposit guarantee schemes. This was partially offset by a decline in impairments on real estate development projects. Compared with the fourth quarter of 2010, which included one-off entry costs for the new deposit guarantee scheme in Belgium, expenses declined 1.9%. The underlying cost/income ratio improved from both prior periods to 55.0%.

Risk costs continued to normalise in the first quarter. ING Bank added EUR 332 million to the loan loss provisions, which is the lowest amount since the second quarter of 2008. The decline from EUR 415 million in the fourth quarter was mainly attributable to a reduced number of incidents in the mid-corporate segment and lower risk

costs for the Dutch mortgage portfolio following a model update in the previous quarter to reflect lower anticipated recovery rates. Loan loss provisions rose slightly at ING Direct, primarily due to lower anticipated recovery rates in the US. ING Bank’s total first-quarter risk costs amounted to 42 basis points of average risk-weighted assets compared with 60 basis points a year ago and 51 basis points in the previous quarter. For the coming quarters, ING expects risk costs as a percentage of risk-weighted assets to remain below the average level seen in 2010.

Retail Banking’s underlying result before tax rose 12.7% from the previous year and 21.2% from the fourth quarter. Compared with the first quarter of 2010, income was 6.7% higher and the interest result rose 3.6%, primarily fuelled by growth in ING Direct from higher volumes and slightly better margins. Risk costs at Retail Banking fell by 21.8% to EUR 262 million. Additions to loan loss provisions were modest in the SME and mid-corporate segments in the Benelux, consistent with the improvement in credit conditions. Risk costs on mortgages declined, reflecting a model update in the Netherlands and reclassification adjustments related to interest on modified loans in the US which were implemented last quarter. These positive factors compensated for a year-on-year rise in expenses due to investments in the product range, branch network expansion and an increase in pension costs in the Netherlands. The increase in Retail Banking’s profit before tax compared with the fourth quarter of 2010 was due to the strong quarterly income, a decline in risk costs and lower expenses.

Commercial Banking excluding ING Real Estate posted record results in the first quarter of 2011. Underlying result before tax was EUR 773 million, or 13.2% higher than in the first quarter of last year. Income rose 6.9% on growth in lending volumes and commissions at Structured Finance, and higher levels of client-related activity in Financial Markets. Risk costs remained low at EUR 59 million as net releases in Structured Finance were offset by higher net additions in General Lending due to provisioning for a few large files. Operating expenses increased 8.5% from the first quarter of 2010 due to higher staff costs, selective investments in the business and currency impacts. Compared with the fourth quarter of 2010, expenses increased 2.3%. Commercial Banking’s underlying result before tax was 44.8% higher than the fourth quarter of 2010, largely fuelled by seasonally higher client-related activity in Financial Markets.

The underlying result before tax of ING Real Estate was EUR 70 million compared to a loss in the same quarter of last year. Results in the quarter were driven by lower negative fair value changes and impairments, lower risk costs and a decline in expenses. Compared with the first quarter of 2010, the Investment Management and Finance businesses as well as ING’s own Real Estate Investment Portfolio each recorded a quarterly profit and improved results. Meanwhile, the Development business continued to narrow its loss.

Corporate Line Banking’s underlying result before tax was EUR -125 million compared with EUR -159 million in the first quarter of last year. The loss narrowed mainly due to higher income on capital surplus which resulted from a combination of lower benefits paid to the business lines due to a decline in average economic capital levels and higher book equity due to retained earnings. This was partly offset by increased financing charges, reflecting the total costs of Group core debt which are fully allocated to the Bank as of 2011.

The net result of the Bank was EUR 1,147 million, including a net gain of EUR 11 million from divestments and EUR -53 million of special items after tax, which mainly related to the merger of the Dutch retail activities, the Belgian transformation programme, restructuring at ING Real Estate and separation costs.

The Bank’s underlying return on equity rose to 13.7% based on IFRS-EU equity. The return on equity based on a 7.5% core Tier 1 ratio rose to 20.3%, exceeding the Ambition 2013 target of 13-15%.

INSURANCE

Insurance key figures

			1Q2011				1Q20101				Change					4Q20101				Change
Margin analysis (in EUR million)
Investment margin				391				329				18.8	%				402				-2.7	%
Fees and premium-based revenues				1,326				1,200				10.5	%				1,270				4.4	%
Technical margin				203				182				11.5	%				204				-0.5	%
Income non-modelled life business				26				32				-18.8	%				37				-29.7	%
Life & ING IM operating income				1,946				1,744				11.6	%				1,912				1.8	%
Administrative expenses				778				757				2.8	%				843				-7.7	%
DAC amortisation and trail commissions				504				434				16.1	%				513				-1.8	%
Life & ING IM operating expenses				1,282				1,191				7.6	%				1,356				-5.5	%
Life & ING IM operating result				664				552				20.3	%				556				19.4	%
Non-life operating result				70				47				48.9	%				69				1.4	%
Corporate line operating result				-172				-185									-188
Operating result				561				414				35.5	%				438				28.1	%
Non-operating items				-101				-293									-1,245
Underlying result before tax				461				121				281.0	%				-808				n.a.
Key figures
Administrative expenses / operating income (Life & ING IM)				40.0	%			43.4	%								44.1	%
Life general account assets (end of period, in EUR billion)				159				153				3.9	%				165				-3.6	%
Investment margin / life general account assets (in bps)2				95				84									93
ING IM Assets under Management (end of period, in EUR billion)				378				362				4.4	%				387				-2.3	%
Underlying return on equity based on IFRS-EU equity3				6.2	%			0.8	%								-15.7	%

 

1		The result of this period has been restated to reflect the change in accounting policy, i.e., the move towards fair value accounting for Guaranteed Minimum Withdrawal Benefits for life in the US Closed Block VA as of 1 January 2011.
2		Four-quarter rolling average
3		Annualised underlying net result divided by average IFRS-EU equity. (The 2010 quarterly results are adjusted for the after-tax allocated cost of Group core debt.)

Total operating profit at ING Insurance showed a clear improvement in the first quarter, rising 35.5% from the first quarter of 2010 and 28.1% from the previous quarter. Results in the current quarter reflect higher fees and premium-based revenues, robust sales growth, an improvement in the investment margin and cost control.

The operating result from Life Insurance and Investment Management was 20.3% higher than the first quarter of 2010 and 19.4% higher than the fourth quarter of 2010. The improvement in results compared with a year earlier was driven by a significant increase in the investment margin and higher fees and premium-based revenues. Expenses rose slightly from the same quarter of 2010, consistent with higher levels of business activity and investments, but they declined on a sequential basis as a result of cost-containment initiatives.

The investment margin rose 18.8% from the same period of 2010 to EUR 391 million, mainly due to reinvestments into fixed income securities in the Netherlands and the US, as well as accretion of previously impaired securities in the US (excluding US Closed Block VA). The investment margin was 2.7% lower than in the fourth quarter of 2010, reflecting higher interest rate swap expenses in the US (excluding US Closed Block VA) which offset a continued improvement in the Benelux. The investment spread continued to improve, rising to 95 basis points from 93 basis points in the fourth quarter of 2010 and from 84 basis points in the first quarter of 2010.

Fees and premium-based revenues rose 10.5% from the first quarter of 2010 to EUR 1,326 million. This was primarily driven by strong product sales and renewals, and higher fees at Investment Management attributable to higher assets under management and the introduction of a fixed service fee during the second half of 2010. Compared with the previous quarter, fees and premium-based revenues increased 4.4% from strong corporate-owned life insurance sales campaigns in Japan and the seasonal effect of corporate pension contract renewals in the Benelux.

The technical margin was EUR 203 million, up 11.5% from the first quarter of last year. This increase was caused by

improved results in the Benelux, and favourable claims and surrender results in ING Life Korea. Partially offsetting this were lower results in the US (excluding US Closed Block VA) and a decline in Japan’s technical result, which was caused by EUR 4 million of expected net claims directly related to the March 2011 earthquake and tsunami. The technical margin for Insurance was flat on a sequential basis.

Administrative expenses for Life Insurance and Investment Management declined sharply from the fourth quarter and were up just 0.8% excluding currency effects compared with the previous year. This reflects cost-containment efforts in the US (excluding Closed Block VA) and the Benelux, where expenses fell 19.8% and 7.3%, respectively. The decrease in the US (excluding US Closed Block VA) was partially driven by a EUR 22 million nonrecurring reduction in accruals related to incentive compensation. Expense growth in Asia/Pacific and Latin America kept pace with business growth, while costs in Central and Rest of Europe were impacted by an annual EUR 16 million financial institutions tax in Hungary, which was fully recorded in the first quarter. An increase in costs at Investment Management reflects the introduction of a fixed service fee in the second half of 2010, for which there is an offset in income, as well as higher staff-related expenses. Compared with the fourth quarter of 2010, total administrative expenses at ING Insurance declined 5.3% excluding currency effects. The ratio of administrative expenses to operating income improved to 40.0%.

The non-life operating result of ING Insurance was EUR 70 million, up 48.9% from the first quarter of 2010 due to an improved loss ratio and higher sales in Brazil, and higher earned premiums in Disability and Accident in the Benelux. Compared with the fourth quarter of 2010, the non-life operating result was flat.

The Corporate Line operating result was EUR -172 million, an improvement compared with EUR -185 million in the same quarter of last year. This was mainly caused by lower interest payments on hybrids as a result of ING Group’s hybrid to equity conversion with ING Insurance in December 2010, as well as the discontinuation of Group core debt expense allocation to Insurance.

The first-quarter underlying result before tax for ING Insurance improved to EUR 461 million from EUR 121 million in the first quarter of 2010 and a loss in the previous quarter, which resulted from the DAC write-down in the US Closed Block VA business. Prior quarters have been restated to reflect the previously announced decision to move towards fair value accounting on reserves for Guaranteed Minimum Withdrawal Benefits for life (‘GMWB’) as of 1 January 2011 for the US Closed Block VA.

Gains/losses and impairments on investments totalled EUR -125 million in the first quarter and were primarily attributable to impairments on debt securities. Revaluations were positive at EUR 67 million and other market-related impacts diminished to EUR -43 million.

The quarterly net result for Insurance was EUR 234 million, including EUR -66 million of special items which related primarily to restructuring programmes and separation expenses. The underlying return on IFRS-EU equity for Insurance was 6.2% for the first three months of 2011.

Insurance sales (APE) rose 8.0% from the first quarter of 2010 and 17.0% from the fourth quarter of 2010, excluding currency effects. APE growth compared with the same quarter of last year was attributable to Asia/Pacific, the Benelux and the US. Sales were up 11.8% in Asia/ Pacific, excluding currency impacts, on new product introductions, growth across the region and ING’s strong bank distribution partnerships. COLI sales and renewals at ING Life Japan supported the rise in APE. Sales in Korea rose due to traditionally strong bancassurance sales at KB Life in the first quarter combined with improved agent activity and productivity at ING Life Korea. In the Benelux, APE rose 26.9%, mainly due to a high level of corporate pension contract renewals in the Netherlands. New sales in the US (excluding US Closed Block VA) rose 12.4% excluding currencies, driven by higher retirement plan and individual life sales. Compared with the first quarter of 2010, Central and Rest of Europe’s APE declined 3.0%, while sales in Latin America were down 7.7%, excluding currency impacts.

BALANCE SHEET AND CAPITAL MANAGEMENT

Balance Sheet and Capital Management key figures

			ING Group									ING Bank N.V.									ING Verzekeringen N.V.									Holdings/Eliminations
End of period, in EUR million			31 Mar. 11				31 Dec. 101					31 Mar. 11				31 Dec. 10					31 Mar. 11				31 Dec. 101					31 Mar. 11				31 Dec. 10
Balance sheet data
Financial assets at fair value through P&L				249,310				263,894					128,101				137,126					122,837				128,503					-1,627				-1,735
Investments				229,503				234,240					109,571				110,893					119,933				123,347
Loans and advances to customers				611,138				613,204					586,861				587,449					30,031				31,020					-5,753				-5,265
Other assets				139,284				135,667					102,975				97,605					41,236				42,789					-4,927				-4,727
Total assets				1,229,235				1,247,005					927,507				933,073					314,036				325,659					-12,308				-11,727
Shareholders’ equity				40,067				40,904					34,869				34,451					18,955				20,159					-13,756				-13,706
Minority interests				742				729					617				617					124				112
Non-voting equity securities				5,000				5,000																							5,000				5,000
Total equity				45,809				46,633					35,486				35,069					19,079				20,271					-8,756				-8,706
Debt securities in issue				140,145				135,604					130,739				125,066					3,901				3,967					5,505				6,571
Insurance and investment contracts				263,154				271,129														263,154				271,129
Customer deposits/other funds on deposit				513,274				511,362					519,409				519,304														-6,135				-7,942
Financial liabilities at fair value through P&L				122,184				138,538					120,277				136,581					3,396				3,677					-1,489				-1,720
Other liabilities				144,669				143,740					121,596				117,054					24,506				26,616					-1,433				70
Total liabilities				1,183,426				1,200,372					892,022				898,005					294,957				305,389					-3,552				-3,021
Total equity and liabilities				1,229,235				1,247,005					927,507				933,073					314,036				325,659					-12,308				-11,727
Captal ratios (end of period)
ING Group debt/equity ratio				13.6	%			13.4	%
Bank core Tier 1 ratio													10.0	%			9.6	%
Insurance IGD Solvency I ratio																						241	%			241	%

 

1		The figures of this period have been restated to reflect the change in accounting policy, i.e., the move towards fair value accounting for Guaranteed Minimum Withdrawal Benefits for life in the US Closed Block VA as of 1 January 2011.

ING Group’s balance sheet decreased by EUR 18 billion in the first quarter to EUR 1,229 billion, due entirely to currency effects. At comparable currency rates, the balance sheet increased by EUR 8 billion, driven by higher loans and advances to customers. Shareholders’ equity fell by EUR 0.8 billion to EUR 40.1 billion (or EUR 10.59 per share) mainly due to lower revaluation reserves as a result of higher interest rates and currency effects, which offset the quarterly net profit of EUR 1.4 billion.

Strong capital generation in ING Bank continued in the first quarter, with the Bank’s core Tier 1 ratio increasing to 10.0% from 9.6% at year-end 2010. Core Tier 1 capital rose by EUR 0.8 billion driven by retained earnings.

The Insurance IGD ratio was 241% at the end of March 2011, stable compared with the end of December 2010.

The Group’s debt/equity ratio increased from 13.4% at year-end 2010 to 13.6% at the end of the first quarter. The adjusted equity of ING Group decreased by EUR 0.3 billion to EUR 54.0 billion, mainly reflecting EUR -2.1 billion of currency effects which were only partly offset by first-quarter retained earnings of EUR 1.4 billion. Group core debt was stable as there were no capital flows between ING Group, ING Insurance and ING Bank.

On 7 March 2011, ING announced its intention to repurchase EUR 2 billion of core Tier 1 securities from the Dutch State on 13 May 2011. The total payment will be EUR 3 billion and includes a 50% repurchase premium. The Dutch Central Bank (DNB) has given its final approval for this repurchase. Based on ING Bank’s capital position at the end of the first quarter of 2011, the repurchase in May would reduce the core Tier 1 ratio by 95 basis points to 9.1% on a pro-forma basis.

APPENDIX 1 ING GROUP: CONSOLIDATED PROFIT AND LOSS ACCOUNT

ING Group: Consolidated profit and loss account

			Total Group1							Total Banking								Total Insurance1
in EUR million		1Q2011				1Q20102				1Q2011				1Q2010				1Q2011				1Q20102
Gross premium income			8,255				8,262												8,255				8,262
Interest result Banking operations			3,393				3,226				3,396				3,263
Commission income			1,192				1,087				695				655				497				432
Total investment & other income			1,558				1,474				418				259				1,233				1,235
Total underlying income			14,396				14,050				4,508				4,178				9,984				9,929
Underwriting expenditure			8,274				8,634												8,274				8,634
Staff expenses			1,966				1,863				1,444				1,343				522				520
Other expenses			1,420				1,309				959				886				461				423
Intangibles amortisation and impairments			78				169				78				169
Operating expenses			3,465				3,341				2,481				2,399				984				943
Interest expenses Insurance operations			157				158												253				215
Addition to loan loss provisions			332				497				332				497
Other			14				16												14				16
Total underlying expenditure			12,241				12,646				2,813				2,896				9,524				9,808
Underlying result before tax			2,156				1,403				1,695				1,282				461				121
Taxation			630				457				482				349				148				108
Minority interests			33				23				24				22				9				1
Underlying net result			1,492				923				1,189				911				303				12
Net gains/losses on divestments			11				403				11				405								-2
Net result from divested units			-3																-3
Special items after tax			-119				-97				-53				-75				-66				-22
Net result			1,381				1,230				1,147				1,241				234				-11

1		Including intercompany eliminations
2		The result of this period has been restated to reflect the change in accounting policy, i.e., the move towards fair value accounting for Guaranteed Minimum Withdrawal Benefits for life in the US Closed Block VA as of 1 January 2011.

APPENDIX 2 ING GROUP: CONSOLIDATED BALANCE SHEET

ING Group: Consolidated balance sheet

		ING Group								ING Bank NV								ING Verzekeringen NV								Holdings/eliminations
in EUR million		31 Mar. 2011				31 Dec. 20101				31 Mar. 2011				31 Dec. 2010				31 Mar. 2011				31 Dec. 20101				31 Mar. 2011				31 Dec. 2010
Assets
Cash and balances with central banks			16,301				13,072				12,970				9,519				7,451				8,646				-4,120				-5,093
Amounts due from banks			55,435				51,828				55,435				51,828
Financial assets at fair value through P&L			249,310				263,894				128,101				137,126				122,837				128,503				-1,628				-1,735
Investments			229,503				234,240				109,571				110,893				119,933				123,347
Loans and advances to customers			611,138				613,204				586,861				587,449				30,031				31,020				-5,754				-5,265
Reinsurance contracts			5,544				5,789												5,544				5,789
Investments in associates			3,761				3,925				1,300				1,494				2,467				2,428				-6				3
Real estate investments			1,857				1,900				526				562				1,053				1,063				278				275
Property and equipment			6,159				6,132				5,665				5,615				494				517
Intangible assets			5,104				5,372				2,162				2,265				3,098				3,256				-156				-149
Deferred acquisition costs			10,125				10,499												10,125				10,499
Assets held for sale			680				681				308				300				372				381
Other assets			34,319				36,469				24,609				26,023				10,633				10,209				-924				237
Total assets			1,229,235				1,247,005				927,507				933,073				314,036				325,659				-12,308				-11,728
Equity
Shareholders’ equity			40,067				40,904				34,869				34,451				18,955				20,159				-13,756				-13,706
Minority interests			742				729				617				617				124				112
Non-voting equity securities			5,000				5,000																				5,000				5,000
Total equity			45,809				46,633				35,486				35,069				19,079				20,271				-8,756				-8,706
Liabilities
Subordinated loans			10,213				10,644				19,087				21,021				4,295				4,407				-13,170				-14,784
Debt securities in issue			140,145				135,604				130,739				125,066				3,901				3,967				5,505				6,571
Other borrowed funds			19,829				22,292												7,854				8,588				11,975				13,704
Insurance and investment contracts			263,154				271,129												263,154				271,129
Amounts due to banks			79,341				72,852				79,341				72,852
Customer deposits and other funds on deposits			513,274				511,362				519,409				519,304												-6,135				-7,942
Financial liabilities at fair value through P&L			122,184				138,538				120,277				136,581				3,396				3,677				-1,489				-1,720
Liabilities held for sale			399				424				128				145				271				279
Other liabilities			34,886				37,527				23,039				23,035				12,086				13,342				-239				1,150
Total liabilities			1,183,426				1,200,373				892,022				898,005				294,957				305,389				-3,553				-3,021
Total equity and liabilities			1,229,235				1,247,005				927,507				933,073				314,036				325,659				-12,308				-11,728

1		The figures of this period have been restated to reflect the change in accounting policy, i.e., the move towards fair value accounting for Guaranteed Minimum Withdrawal Benefits for life in the US Closed Block VA as of 1 January 2011.

APPENDIX 3 RETAIL BANKING: CONSOLIDATED PROFIT AND LOSS ACCOUNT

Retail Banking: Consolidated profit and loss account

										Retail Banking Benelux																Retail Direct & International
		Total Retail Banking								Netherlands								Belgium								ING Direct								Central Europe								Asia
in EUR million		1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010
Interest result			2,474				2,387				899				912				401				391				963				867				173				175				38				42
Commission income			356				359				127				143				99				96				48				37				66				71				16				13
Investment income			2				-11				1				0				2				9				6				-20				-7				1				1				0
Other income			93				7				30				-1				25				28				-15				-28				38				-2				15				10
Total underlying income			2,926				2,742				1,056				1,054				527				523				1,002				856				271				244				70				65
Staff and other expenses			1,676				1,532				597				548				355				310				485				455				194				182				44				37
Intangibles amortisation and impairments			11				9				3				6				0				0				8				3				0				0				0				0
Operating expenses			1,687				1,540				600				553				355				310				492				458				194				182				44				37
Gross result			1,239				1,202				456				500				171				213				510				398				76				62				26				28
Addition to loan loss provision			262				335				79				141				18				39				138				129				20				16				7				9
Underlying result before tax			977				867				377				359				153				174				372				269				56				45				19				19
Client balances (in EUR billion)
Residential Mortgages			316.6				295.5				139.7				133.5				26.4				23.6				146.0				134.7				3.8				3.2				0.7				0.6
Other Lending			88.8				84.5				42.9				43.0				27.9				26.1				3.6				3.3				11.1				9.4				3.2				2.7
Funds Entrusted			438.9				420.9				103.2				104.6				70.4				67.7				241.2				227.2				20.3				18.1				3.7				3.4
AUM/Mutual Funds			58.9				56.3				16.8				16.8				27.9				27.4				11.6				10.3				2.3				1.5				0.4				0.3
Profitability and efficiency1
Cost/income ratio			57.6	%			56.2	%			56.9	%			52.5	%			67.5	%			59.3	%			49.1	%			53.5	%			71.7	%			74.8	%			62.8	%			56.6	%
Return on Equity2			20.8	%			19.8	%			30.2	%			28.7	%			31.8	%			36.6	%			16.6	%			13.9	%			10.8	%			9.5	%			7.3	%			7.2	%
Risk1
Risk costs in bp of average RWA			60				78				63				112				39				83				75				72				35				31				31				43
Risk-weighted assets (end of period)			174,725				175,012				50,320				51,175				18,143				18,799				73,135				74,918				23,526				21,316				9,601				8,804

APPENDIX 4 COMMERCIAL BANKING: CONSOLIDATED PROFIT AND LOSS ACCOUNT

Commercial Banking: Consolidated profit and loss account

		Total Commercial									GL &								Structured								Leasing &								Financial								Other									Total Commercial
		Banking									PCM								Finance								Factoring								Markets								Products									Banking excl. RE									ING Real Estate
in EUR million		1Q2011				1Q2010					1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010				1Q2011				1Q2010					1Q2011				1Q2010					1Q2011				1Q2010
Interest result			926				923					224				236				281				262				51				43				276				276				-23				-2					809				814					117				109
Commission income			340				298					48				54				123				87				11				8				6				6				56				49					244				204					97				94
Investment income			71				36					10				0				1				-2				0				0				52				43				3				-1					66				39					5				-3
Other income			323				290					11				5				-22				-20				61				53				257				244				-7				-11					301				271					22				19
Total underlying income			1,660				1,547					293				296				382				327				123				103				591				568				30				34					1,419				1,328					241				219
Staff and other expenses			687				658					138				126				99				98				54				55				207				190				90				72					587				540					100				118
Intangibles amortisation and impairments			60				153					0				0				0				0				0				0				0				0				0				0					0				0					59				152
Operating expenses			747				811					138				126				99				98				54				55				207				190				90				72					587				541					160				270
Gross result			913				736					156				169				283				229				69				48				384				378				-60				-38					832				787					81				-51
Addition to loan loss provision			70				162					64				42				-29				31				24				30				1				2				-1				0					59				104					11				58
Underlying result before tax			843				574					92				127				313				199				45				18				383				376				-60				-37					773				683					70				-109
Client balances (in EUR billion)
Residential mortgages
Other lending			140.2				135.8					35.0				35.8				51.5				45.8				16.6				16.3				3.4				3.8				0.0				0.0					106.4				101.8					33.7				34.0
Funds entrusted			57.4				54.7					34.7				31.8				2.1				3.0				0.1				0.0				20.2				19.2				0.3				0.7					57.4				54.7
AUM/Mutual funds			62.4				66.4																																																							62.4				66.4
Profitability and efficiency1
Underlying cost/income ratio			45.0	%			52.4	%				46.9	%			42.8	%			25.9	%			29.8	%			43.8	%			53.2	%			35.0	%			33.5	%			304.4	%			210.6	%				41.4	%			40.7	%				66.3	%			123.3	%
Return on equity2			24.2	%			14.1	%				9.3	%			10.2	%			31.6	%			18.3	%			19.6	%			6.7	%			50.5	%			44.9	%			-43.5	%			-30.7	%				25.3	%			19.8	%				14.2	%			-29.1	%
Risk1
Risk costs in bp of average RWA			20				42					63				36				-29				28				119				138				1				2				-4				-2					19				30					30				127
Risk-weighted assets (end of period)			138,053				151,500					39,545				43,734				40,733				41,489				8,396				8,252				31,172				35,614				4,618				4,612					124,464				133,701					13,589				17,799