ING Groep N.V. Table Of Contents. Major Rating Factors Rationale Outlook. April 26,

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1 April 26, 2011 ING Groep N.V. Primary Credit Analyst: Alexandre Birry, London 44 (0) ; Secondary Contacts: Mark Button, London (44) ; Dhruv Roy, London +44(0) ; Table Of Contents Major Rating Factors Rationale Outlook 1

2 Major Rating Factors Strengths: Strong domestic banking and insurance franchises. Good geographic diversification in both banking and insurance. Strong rebound in profitability of banking operations and sound capitalization of ING Bank. Counterparty Credit Rating A/Stable/A-1 Weaknesses: Some execution risks remain in group restructuring. Uncertainty around future timing and proceeds of required divestments. Insurance earnings depressed by challenging operating environment and de-risking initiatives. Rationale ING Groep N.V. (ING) is the Netherlands-incorporated nonoperational holding company of the ING group, active in both banking and insurance operations internationally, primarily through ING Bank N.V. and ING Verzekeringen N.V. (INGV), respectively. In October 2009, ING announced that, as required by the European Commission's (EC) state aid investigation, it would divest of its insurance operations by the end of As a result, Standard & Poor's Ratings Services' ratings on ING no longer incorporate any benefits to the group from the diversification provided by owning banking and insurance operations. Our ratings on ING Groep now primarily reflect the strength of its banking operations, and that ING is rated one notch lower than the issuer credit rating on ING Bank, in line with our criteria on bank nonoperational holding companies. However, an unanticipated marked deterioration in INGV's financials could represent a contingent risk for the ratings on the group until the change of ownership is executed. ING's management estimates that its aim to formalize the separation of the banking and insurance businesses by the end of 2010 was met as planned. The separation will be strengthened in 2011 in certain areas with permanent solutions to replace current interim arrangements. Management's base case in terms of divestment path consists of two IPOs, one including the European and Asian activities and one for the U.S. operations. We consider that there is the potential for some execution risk and management distraction--albeit gradually reducing--as the complex undertaking of separating the group and disposing of the sizable insurance operations occurs. The profitability of the banking operations rebounded sharply in 2010, supported largely by resilient margins and falling impairment charges. This more than offset negative earnings in the insurance activities that are still constrained by both a difficult operating environment and initiatives to reduce risk. All in all, ING reported an underlying net profit of 3.9 billion for 2010, up from less than 1 billion on the same basis the previous year. Under our base case, we expect the banking operations to continue to generate sound earnings in 2011, and INGV to return to profit, delivering a return on equity (ROE) of about 5%. In March 2011, ING announced its intention to reimburse in May 2011 a second 2 billion tranche of government core Tier 1 securities, at a cost of 3 billion, reflecting the agreed 50% premium on repayment. This will bring the Standard & Poor s RatingsDirect on the Global Credit Portal April 26,

3 total notional amount of reimbursed government capital to 7 billion, out of the 10 billion originally received. We believe that good earnings prospects at the bank should enable it to pay back the last tranche in the first half of 2012, as it currently intends to. ING reported a group debt-to-equity ratio of 13.3% at end-2010, up from 12.4% at end-2009, but close to the end-2008 level. We expect that the use of retained earnings to repay the government securities will constrain the group's capacity to reduce double-leverage at the holding company until mid After that, we expect the ratio to improve, based on internal capital generation but also, ultimately, the insurance operations divestments and likely sale of ING Direct in the U.S., although it is difficult to predict the timing and future proceeds of these transactions. We expect the holding's debt servicing to rely on the banking subsidiary, as insurance earnings are to be retained to strengthen the capitalization of the operations prior to their divestment. ING has taken a number of actions over the past two years to replenish the insurance subsidiaries' capital and reduce risk to mitigate the adverse impact on capital adequacy from the financial market turmoil. Despite these actions, we view capital adequacy as a relative weakness in the rating profile of INGV. Our view of insurance capital adequacy weakened during 2010 owing to variable annuity-related interest rate risk exposures and, in our view, there is heightened risk within the investment portfolio. Conversely, we consider that ING Bank's capitalization is materially stronger, with risk-adjusted capital (RAC) ratios estimated at 8.4% and 10.9% before and after diversification at end-2010, which compare favorably with peers. The bank's Core Tier 1 ratio improved markedly to 9.6% at end-2010 from 7.8% at end For more information on the insurance and banking businesses, see "ING Verzekeringen NV", "ING's Insurance Operations", and "ING Bank", published on RatingsDirect. Outlook The stable outlook on ING reflects the outlook on ING Bank, in line with our rating approach for nonoperational holding companies. ING Bank's stable outlook is based on our expectation of a resilient performance, supported by an improved economic backdrop in 2011/2012, despite slow growth prospects domestically. Under our base case, we expect the bank to generate earnings in 2011 close to their 2010 level. Combined with its sound capitalization, we consider that the bank's good earnings can offset contingent risks in the insurance operations until the divestment of the latter is achieved. While we consider that downside risk to the ratings decreased in 2010, a downgrade could occur in the unlikely scenario where the bank's stand-alone financial profile were to weaken and were we also to expect the government to be unwilling to provide further support. Negative pressure could also arise if we saw signs of material franchise erosion as a result of strategic distraction or execution risk related to the separation process. We believe an upgrade within the rating horizon is unlikely. ING GROEP N.V. Financial Statistics Profit And Loss Statistics (mil. ) Insurance revenues 37,488 35,808 54,920 62,208 59,642 Banking revenues 17,734 12,293 11,662 14,602 14,195 Total revenues (including internal eliminations) 54,887 47,765 66,291 76,587 73,621 Insurance expenses 4,341 4,387 5,449 5,498 5,

4 ING GROEP N.V. Financial Statistics (cont.) Banking expenses 10,153 10,158 10,122 9,970 9,070 Total expenses 14,494 14,545 15,571 15,468 14,339 Banking addition to loan loss provisions 1,751 2,973 1, Insurance pretax profit -1, ,593 6,533 4,935 Banking pretax profit 5, ,510 5,005 Total pretax profit 4,477-1,525-1,487 11,043 9,940 Taxation 1, ,535 1,907 Minority interests Net profit 3, ,241 7,692 Underlying net profit 3, ,171 7,750 Balance Sheet Statistics (bil. ) Total assets 1,247 1,164 1,332 1,313 1,226 Insurance total assets Bank total assets , Selected Performance Ratios (%) Insurance ROE (6.3) (4.5) (7.9) Non-life combined ratio Banking cost-to-income ratio Capitalization And Leverage Ratios (%) Holding company double leverage (excluding hybrid capital) Holding company debt/equity Insurance financial leverage Insurance regulatory capital coverage Bank Tier 1 ratio Source: ING Groep and Standard & Poor's calculations. Ratings Detail (As Of April 26, 2011)* ING Groep N.V. Counterparty Credit Rating Junior Subordinated (1 Issue) Junior Subordinated (14 Issues) Preferred Stock (1 Issue) Senior Unsecured (12 Issues) Senior Unsecured (1 Issue) A- Short-Term Debt (2 Issues) A-1 Subordinated (2 Issues) A- Counterparty Credit Ratings History 03-Sep Mar Dec-2008 Sovereign Rating Netherlands (State of The) (Unsolicited Ratings) A/Stable/A-1 B BB BB A A/Stable/A-1 A+/Negative/A-1 AA-/Negative/A-1+ AAA/Stable/A-1+ Standard & Poor s RatingsDirect on the Global Credit Portal April 26,

5 Ratings Detail (As Of April 26, 2011)*(cont.) Related Entities ING America Insurance Holdings Inc. ING Arrendadora, S.A. de C.V. ING Bank (Australia) Ltd. Certificate Of Deposit ING Bank Mexico S.A. Certificate Of Deposit Subordinated (1 Issue) ING Bank N.V. Certificate Of Deposit Commercial Paper A-1 Senior Secured (2 Issues) Senior Secured (100 Issues) Senior Unsecured (71 Issues) A+ Short-Term Debt (2 Issues) A-1 Subordinated (18 Issues) ING Bank N.V. (Sydney Branch) Commercial Paper A-1 ING Belgium SA/NV Certificate Of Deposit ING Hipotecaria S.A. de C.V. S.F.O.L. Senior Unsecured (1 Issue) ING Life Insurance & Annuity Co. BBB/Negative/A-2 mxa/stable/mxa-2 A+/Stable/A-1 A+/A-1 BBB/Stable/A-3 mxaaa/stable/mxa-1+ mxa-1+ mxaaa/mxa-1+ mxaa+/stable A+/Stable/A-1 A+/A-1 AAA AAA/Stable A A+/Stable/A-1 A+/A-1 mxa/stable/mxa-1 mxa/stable 5

6 Ratings Detail (As Of April 26, 2011)*(cont.) ING Life Insurance Co. Ltd. A-/Negative/-- A-/Negative/-- ING Life Ltd. AA/Stable/-- AA/Stable/-- ING Re (Netherlands) N.V. A+/Negative/-- A+/Negative/-- ING Security Life Institutional Funding Senior Secured (1 Issue) A ING USA Annuity and Life Insurance Co. A/Negative/A-1 ING USA Global Funding Trusts Senior Secured (1 Issue) A ING Verzekeringen N.V. A-/Negative/A-2 Commercial Paper A-2 Senior Unsecured (12 Issues) A- Senior Unsecured (1 Issue) A-2 Subordinated (2 Issues) BB Internationale Nederlanden (U.S.) Funding Corp. --/--/A-1 Lion Connecticut Holdings Inc. BBB/Negative/-- Preferred Stock (2 Issues) BB+ Midwestern United Life Insurance Co. Nationale-Nederlanden Levensverzekeringen Maatschappij N.V A+/Negative/-- Standard & Poor s RatingsDirect on the Global Credit Portal April 26,

7 Ratings Detail (As Of April 26, 2011)*(cont.) Nationale-Nederlanden Schadeverz. Mij. N.V. (Unsolicited Ratings) Reliastar Life Insurance Co. Reliastar Life Insurance Co. of New York Security Life of Denver Insurance Co. A+/Negative/-- NRpi/--/-- NRpi/--/-- A/Negative/A-1 A/Negative/A-1 A/Negative/A-1 *Unless otherwise noted, all ratings in this report are global scale ratings. Standard & Poor's credit ratings on the global scale are comparable across countries. Standard & Poor's credit ratings on a national scale are relative to obligors or obligations within that specific country. Additional Contacts: Financial Institutions Ratings Europe; FIG_Europe@standardandpoors.com Insurance Ratings Europe; InsuranceInteractive_Europe@standardandpoors.com Additional Contacts: Financial Institutions Ratings Europe; FIG_Europe@standardandpoors.com Insurance Ratings Europe; InsuranceInteractive_Europe@standardandpoors.com 7

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