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ING records 3Q13 underlying net profit of EUR 891 million


• Group underlying net profit of EUR 891 million from EUR 844 million in 3Q12 and EUR 957 million in 2Q13
* 3Q13 net profi t EUR 101 million, or EUR 0.03 per share, including discontinued operations, special items and divestments

• Bank underlying result before tax of EUR 1,103 million, in line with 3Q12 but down 3.8% sequentially
* Net interest margin rose to 1.44% in 3Q13 and the cost/income ratio for the first nine months of 2013 improved to 55.2%
* Risk costs declined 10.4% from 2Q13, but remained elevated at EUR 552 million, or 80 bps of average RWA
* Core Tier 1 ratio rose to 12.4%, or 12.1% on a pro-forma basis including today’s payment to the State and the IABF unwind

• Insurance EurAsia operating result rose to EUR 218 million, up 89.6% versus 3Q12 but 14.8% lower than 2Q13
* Results driven by higher investment margin, lower expenses from the Benelux transformation plan and improved Non-life results
* Underlying pre-tax result of EUR 136 million; up versus 3Q12 but down sequentially due to seasonality of dividend income in 2Q13
* Insurance EurAsia IGD solvency ratio lower at 255% reflecting the change in NN Life’s solvency ratio and the sale of ING Life Korea

• ING is advancing further into the end phase of its restructuring programme, which will now be completed by 2016
* EUR 1.125 billion payment to Dutch State completed today; agreement reached on unwinding of Illiquid Assets Back-up Facility
* Sale of ING Life Korea expected to close by year-end; ING Life Japan to be included within the base case IPO of ING Insurance
* ING Group’s stake in ING U.S. reduced to 57%; Group double leverage covered by remaining stakes in ING U.S. and SulAmérica

Chairman’s Statement

“ING continued to make strong progress on its restructuring programme in the third quarter, advancing further into the end phase of our transformation,” said Ralph Hamers, CEO of ING Group. “At the same time, our businesses recorded another good set of quarterly results while delivering on our strategic priorities.”

“Under a new agreement with the European Commission, the total restructuring of ING Group will now be completed two years earlier, by the end of 2016. The divestment of the Asian insurance and investment management activities is almost complete. The sale of ING Life Korea is expected to close by year-end. We have carefully explored and evaluated several divestment options for ING Life Japan, and have now included this business within the scope of the base case IPO of ING Insurance. Preparations for the base case IPO are progressing well and we will be ready to go to the market in 2014. The successful sale of 38 million ING U.S. shares in October brought our stake down to 57% and moves us close to meeting the requirement to divest more than 50% of the U.S. by the end of 2014. The EUR 4.8 billion of leverage in the Group holding company is covered by the proceeds from our share sales of ING U.S. and SulAmérica this year, together with the market values of our remaining stakes in these companies.”

“We are grateful for the support the Dutch State extended to us during the crisis. Strong capital generation at the Bank facilitated the payment of another tranche of core Tier 1 securities today, reducing the principal amount of outstanding State aid to EUR 1.5 billion. We are also very pleased to have reached an agreement with the State on the unwinding of the Illiquid Assets Back-up Facility.”

“The various performance improvement programmes and restructuring initiatives underway across the company are on track, and the results are encouraging. Underlying pre-tax results at ING Bank were solid at EUR 1,103 million, driven by an increase of the net interest margin to 1.44%. Commercially, the net inflow of funds entrusted was sound at EUR 1.9 billion. Risk costs declined from both previous quarters, but remained elevated. Strong cost control continues to be a priority at the Bank and is evident in the improvement of the cost/income ratio to 55.2% for the first nine months of 2013, despite additional restructuring charges in the third quarter from ongoing reorganisations. The year-to-date return on IFRS-EU equity was 9.3%, within reach of our 2015 target.”

“The Bank’s capital position strengthened further to a 12.1% pro-forma core Tier 1 ratio, after today’s payment to the Dutch State and including the estimated impact from unwinding the IABF. ING Bank is continuously working to optimise its capital structure and is already meeting most of the CRD IV requirements. In order to reinforce our capital adequacy ahead of upcoming regulation, we are launching exchange offers for EUR 4.7 billion of outstanding subordinated debt into two CRD IV-compliant securities. We have also announced our intention to call a USD 2.0 billion hybrid with an 8.5% coupon, which will reduce our cost of capital.”

“At Insurance EurAsia, both operating and underlying results improved compared with a year ago, rising to EUR 218 million and EUR 136 million, respectively. Third-quarter results primarily reflected a higher investment margin, lower expenses as a result of the transformation programme in Insurance Benelux, and better performance in Non-life. On a sequential basis, results at Insurance EurAsia declined mainly due to seasonally higher dividend income in the second quarter.”

“We are proud of the financial and strategic progress that we have achieved this quarter. I am very determined and excited to be leading ING during this next phase of its transformation, and am convinced that our focused, simpler and stronger company is well positioned to help our customers and society prosper, and to grow our business.”

Analyst and investor conference call

6 November 2013, at 9:00 a.m. CET

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6 November 2013, at 11:00 a.m. CET

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ING Group’s Annual Accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS-EU’).

In preparing the financial information in this document, the same accounting principles are applied as in the 3Q2013 ING Group Interim Accounts.

Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in ING’s core markets, (2) changes in performance of financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the euro, (4) the implementation of ING’s restructuring plan to separate banking and insurance operations, (5) changes in the availability of, and costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit markets generally, including changes in borrower and counterparty creditworthiness, (6) the frequency and severity of insured loss events, (7) changes affecting mortality and morbidity levels and trends, (8) changes affecting persistency levels, (9) changes affecting interest rate levels, (10) changes affecting currency exchange rates, (11) changes in investor, customer and policyholder behaviour, (12) changes in general competitive factors, (13) changes in laws and regulations, (14) changes in the policies of governments and/or regulatory authorities, (15) conclusions with regard to purchase accounting assumptions and methodologies, (16) changes in ownership that could affect the future availability to us of net operating loss, net capital and built-in loss carry forwards, (17) changes in credit-ratings, (18) ING’s ability to achieve projected operational synergies and (19) the other risks and uncertainties detailed in the Risk Factors section contained in the most recent annual report of ING Groep N.V. Any forward-looking statements made by or on behalf of ING speak only as of the date they are made, and, ING assumes no obligation to publicly update or revise any forwardlooking statements, whether as a result of new information or for any other reason. This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities.


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