INGD Interim Report 30062010

8/3/2019 INGD Interim Report 30062010

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ING DIRECTConsolidated lnterim Financial, Report for the period ended| 30 June 2010

ING.hUTNECT. lttyourmoneyING Bank (Australia) LimitedABN 24 000 893 292

140 Sussex Street, Sydney, NSW, 2000GPO Box 4094, Sydney, NSW, 2001Telephone: +61 2 9028 4000Facsimile: +61 29028 47OgWeb: www. ingdirect.com.au


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Contents

lnterim Reportlnterim ReportConsolidated lnterim Financial StatementsConsolidated lncome StatementConsolidated Statement of Comprehensive lncomeConsolidated Balance SheetConsolidated Statement of Changes in EquityConsolidated Cash Flow Statement

67I9

10Notes to Consolidated lnterim Financial Statements1 Corporateinformation

2 Significant accounting policies3 Profit from ordinary activities4 lncome tax expense5 Cash and cash equivalents6 Avalable for sale flnancial assets7 Loans and advancesI Asset quality9 Provision for impairment10 Deposits payable to other financial institutions11 Debt issues12 Segment reporting'13 Gontingent assets and liabilities14 Credit commitments15 Subsequent events

't11112141515151616171718't91919

OtherDirectors' DeclarationConformity Statementlndependent Review Report

ING Bank (Australia) Lmted and controlled entitylnterim Financial Report 2010 2

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lnterim

The Directors of ING Bank (Australia) Limited ("the Bank")submit their report, together with the consolidated interimfinancial statements of the Bank and its controlled entity,IDS Trust 2008-1 ("the Group"), for the half year ended 30June 2010.The names and details of the Directors of the Bank holdingoffice during the half year and until the date of this reportare set out below.DIRECTORSPhillip Robert Shirriff, BA, FCPA, FCIS, FCIM, AAll,AIGD, ChairmanMr Shiniff was appointed Director of the Bank in July 1 985and Chairman in May 2004. Mr Shiniff is a member of theAudit and Risk Committees. He is also Chairman of theRemuneration and Nomination Committee.Donald Joseph Koch, Masters in Banking and Finance,Ghief Executive OfficerMr Koch was appointed Director and Chief ExecutiveOfficer on 1 June 2009. Mr Koch is a member of the RiskCommittee.lrene Yun Lien Lee, BA, Barrister-at-LawMs Lee was appointed Director in December 2005. Ms Leeis a member of the Audit Committee and Chair of the RiskCommittee.Simonis Maria Hubertus TellingsMr Tellings was appointed Director in March 2007. MrTellings is a member of the Audit and Risk Committees.He is also a member of the Remuneration and NominationCommittee. Mr Tellings has announced his resignation asa Director of the Bank effective 1 October 2010.Michael Katz, BGomm (Hons)Mr Katz was appointed Director in January 2010. Mr Katzis a member of the Audit and Risk Committees. He is alsoa member of the Remuneration and NominationCommitte.John Masters, BGomm (Hons), CA, Barrister-at-LawMr Masters was appointed Director in January 2010. MrMasters is a member of the Risk Committee and Chairmanof the Audit Committee.Vaughn Nigel Richtor, BA (Hons), MCT Dip (Corp Fin)Mr Richtor was appointed Director in February 2010. MrRichtor is a member of the Audit and Risk Committees.

Hugh Douglas Harley, LLB (Hons), BEc (Hons), M.Phil,SF (Fin)Mr Harley was a member of the Risk Committee andChairman of the Audit Committee until his resignation asDirector on 26 February 2010.COMPANY SECRETARYMatthew Wade Sinnamon, LLB, B.Bus, GSA, SolicitorMr Sinnamon was appointed Company Secretary andHead of Legal & Compliance in December 2007. MrSinnamon attends all meetings of the Board and itsCommittees.REVIEW OF OPERATIONSING DIRECT has performed strongly in the first half of2010 despite challenging market conditions, maintainingits position as Australia's 5'n largest retail bank inhousehold savings and mortgages.Profit for the half year ended 30 June 2010 was $133.1million, down 67o from the comparative half year period($141.6 million). This was mainly driven by a decrease innet interest income of $31 million or 97o from the priorcomparative half year period. The result is a reflection ofintense price competition in the savings market.SavingsOur savings portfolio has been impacted by strong pricecompetition in the first half of 2010, with a year to date netportfolio decrease. As at 30 June 2010, our total savingsportfolio was $20.6 billion, a decrease of 3% for the firsthalf, but a year-on-year increase from 30 June 2009 of$0.7 billion.Residential MortgagesThe Bank's retail mortgage portfolio increased by $t.tbillion in the first half of 2010. As at 30 June 2010, our totalresidential mortgage portfolio was $36.7 billion, anincrease of 3% from December 2009.We achieved a significant milestone in June 2010, with ourDirect Mortgages portfolio reaching $2 billion, or more than5% of the total mortgage portfolio.Gommercial Loansln line with ING's global strategy, the Bank has continuedto pursue a flatiine growth strategy for the commercialloans portfolio in the first half of 2010. Commercial loans at30 June 2010 were $3.4 billion, of which the CommercialProperty Finance portfolio comprised $2.7 billion.

ING Bank (Australia) Limited and controlled entiglnterim Financial Report 2010


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lnterim

Cost ManagementOperating expenses increased by $Z.g million to $104.6million, up 8% from the comparative half year period, mainlydue to the launch of the Orange Everyday ('OE") product inQ3 2009. Our cost to income ratio of 33.4% for the half yearto 30 June 2010 continues to highlight the effectiveness ofour low cost model relative to our competitors and theefficiency gains achieved throughout the year.Risk ManagementRisk costs have stabilised markedly since 2009, particularly inour commercial portfolio. Loan loss provisions recorded forthis half year period were $17.9 million. This was a decreaseof $33 million from the amount provided for in the half yearended 30 June 2009 ($50.9 million).GapitalThe Bank's total regulatory capital ratio remained steady at13%, consistent with 31 December 2009. This represents avery conservative level of capitalisation, which is adequate tosupport current growth plans over the medium term.Our program to achieve Basel ll Advanced accreditationcontinues t progress strongly, including active and ongoingengagement with the regulator.GustomersOur customer service standards continue to lead the industry.We continue to have the highest Net Promoter Score (ameasure of the number of customers who would recommendthe Bank) amongst all financial institutions in Australia in2010.Our total customer base has grown to over 1.4 million,particularly as a result of the take up of our OE transactionaccount. OE had over 50,000 actve accounts as at 30 June2010.AwardsThe Bank was voted Australia's Mosf Trusted Brand inbanking in 2010 by Reade/s Digest. The OE transactionaccount has also achieved fantastic recognition in 2010including:o receiving a 5-Star rating from CANSTAR CANNEX;. finalist for lhe Australian Eusrness and FinanceAwards 2010: lnnovative Retail Banking Product ofthe Year and. finalist for lhe lnnovatve Card and PaymentProduct of the Year award.DividendsNo dividends were paid or declared during the period.

ING Bank (Australia) Limited and controlled enttylnterim Financial Report 2010


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lnterim

Significant events during the half year ended 30 June 2010There were no significant events during the half year ended 30 June 2010.Risks & uncertaintiesWhilst the outlook for ING DIRECT for the remainder of 2010 and beyond is positive, strong competition for deposits isexpected to contnue in the Australian market as banks and other financial institutions look to re-align their balance sheetmix of savings and loans. This is likely to continue to place pressure on ING Direct's net interest margins.OutlookING Direct is well positioned for the remainder of 2010 and into the future. Our continued strong profit performance and thelaunch of OE to the market have reinforced ING DIRECT's position as the real altemative to the'Big 4' banks in Australia.We continue to work towards achieving our vision to become 'Australian's favourite place for monef' and delivering longterm, sustainable proflt growth.Significant events after the balance sheet dateNo events or transactions have occurred since 30 June 2010 or are pending that rrould have a material effect on theFinancial Statements at that date or for the period then ended, or that are of such significance in relation to the Bank'saffairs, in order to make such Financial Statements misleading regarding the BanKs financial position, results of operationsor cash flows.

Donald J KochChief Executive Officer

ING Bank (Australia) Limited and controlled entitylnterim Financial Report 2010


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Consolidated Interim Financial StatementsGonsolidated lncome Statement for the six month period ended

amounts in thousands of Australian dollars Note 30 June20f0 30 June2009lnterst incomelnterest expenseNet interest incomeNet non-interest income

Total operatlng ncomoEmployment expensesAdvertising expensesDepreciation and amortisation expensesOccupancy expensesTechnology expensesOther expenses

Total operatlng expensesLoan loss provisions

Opertng profit before taxlncome tax expense

Profit for the perlod


1,420,912 1,298,233(f,116,556) (963,094)304356 335,1398,604 14,980312,960(s0,285)(19,115)(e,2s3)(6,4411(6,619)

112,8781

350,1 19(44,005)(19,733)

(6,e09)(6,173)(5,057)

(14,862)(104,594)(17,937)

(e6,739)(50,87r)

190,429(s7,309) (60,958)

133,120 14't,551


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Gonsolidated lnterim Financial StatementsGonsolidated Statement of Gomprehensive lncome for the six month period ended

amounts in thousands of Australian dollars 30 June201 30 June2009Profit for the pedodUnrealised revaluations net of tax:

Available for sale financial assetsCesh flow hedges

Total amount recognised directly in equity

Tota! comprehenslve lncome

ING Bank (Australia) Limited and conkolled entitylnterim Financial Report 2010

133,120

(6e2)(r0,8801

141,551

(1,1 98)64,837

(11,721

121,il8 205,190


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Consolidated lnterim Financial StatementsConsolidated Balance Sheet as at

amounts in thousands of Australian dollars Note 30 June 31 December2010 2009ASSETS

Cash and cash equivlentsAvailable for sale financial assetsLoans and advancesDedvative assetsReceivables and other asselsDefened tax assetsProperty, planl and equipment

Total assetsLlABILITIES

DepostsDeposits payable to other fnancial institulionsDerivative liabilitiesCreditors and other liabilitiesDebt issuesProvisions

Total llabllltiesNet assetsEQUITY

Contributed equityReservesRetained profits

Total equl9

5o7

20,9595470.123

40,776,65770,946

212,6359,l6li36,1l0

661,4797,123,035

39,307,88558,648

163,f0439,94243,104

46,e/,6,622 47,397,197

1020,553,4917,470,U5

406,099331,041

15,397,2999,666

21,22't,8109,070,008

261,33'l387,748

14,091,4648,597

14,168,:ll 45,040,9582,478,191 2,356,2391,334,000 1,334,00026,817 40,5281,117,374 981,71',12,178,191 2,356,239

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Gonsolidated lnterim Financial StatementsConsolidated Statement of Changes in Equity for the six month period ended30 June 20'10

Availablefor -. .. totat eoutvsate fesefveAsat I January2010

Total comprehensive incomeGeneral Reserve for Credit LossesShare-based paynent plan

As at 30 June 201030 June 2009

1,334,000 86,944 98l,7ll133,120- (2,il31 2,il3'O1 '

(61,070) 14,&ri4 2,356,239(10,880) (6e21 121,il8-104

1,334,000 81,805 1,117,371 (7l,g5{ll 13,962 2,478,191

, , . tralian dollars lssued Other capital Retained Cash flow Available for Total eouitvmounls ln rnousanos or Aus-- --'' --"-'- capital reserves eamings hedge reserve sare reserveAs at 1 January 2009

Total cclmprehensive incomeGeneral Reserve for Credt LossesShare-based payment plan

As at 30 June 2009

2,495 801,496141,551

(188,836) (10,830) 1,938,3254r,837 (r,r98) 205,1901,334,000- 84,996 (84,996). 505 - 505r,334,000 87,996 858,05f (123,999) (12,028) 2,',t44,020

ING Bank (Australia) Limited and controlled entitylnterim Financial Report 2010 I


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Consolidated lnterim Financial StatementsGonsolidated Gash Flow Statement for the six month period ended

amounts in thousands of Aushalian dollars 30 June2010 30 June2009Gash flows from operatlng actvtesOperating profit before taxAdjustments fon

deprecation and emortisation expenssloan loss provisionsother

Taxes paidChanges in:

loans and advancesderivativesreceivables and other assetscreditor and other liabilitiesdeposits

Net cash flows from operatlng ac-tivitiesGash flows from lnyestng activltiesChanges in:

available for sale financial assetsproperty, plant and equipment

Net cash flows from lnvestlng actlvtsGash flows from financlng actlvltlesChanges in:

deposils payable to otherfinancial institutionsdebt issues

Net cash flos from llnancing actvites

Net cash flowsCash and cash eiuivalents at beginning of periodCash and cash equlvalents at end of perlod

190,429 202,5099,253 6,90917,937 50,871(16,12s) (81,715)(137,4371 (38,481)

(r,486,709) (68,750)132,40 551,961(49,559) 196,55910,228 (15,279)(668,319) 1,076,257(1,997,8,06) 1,880,841

1,652,912 (r,343,525)(2,259) (14,062)1,650,653 (1,357,587)

(1,599,163) (1,032,332)1,305,8:t5 33,085(293,328) (999,247)(64{r,s21}

661,479(475,993)

718,84320.958 242,850

lnterest ncome recognised for the 6 month period included $1.370 billion in cash received for the Group (6 months to 30 June 09 -$1.356 billion). lnterest expense recognised for the 6 month perod included $1.115 billion in cash paid for the Group (6 months to 30June 09 - $0.977 billion).

ING Bank (Australia) Limited and controlled entitylnterim Financial Report 2010 10


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Notes to the Consolidated lnterim Financial Statements

1. CORPORATE INFORMATIONING Bank (Australia) Limited ('the BanK) is a company incorporated and domiciled in Australia. The registered,office andprincipal place of business of the Bank is Level 14, 140 Sussex Street, Sydney NSW 2000. lts ultimate parent entity is INGGroep NV.The interim financial report for the half year ended 30 June 2010 is comprised of the Bank and its controlled entity, IDS Trust2008-1 ("the Group").This interim financial report does not contain all disclosures of the type normally found within a full annual financial report andtherefore cannot be expected to provide as full an understanding of the financial position and financial performance of theGroup as that given by the annual financial report. As a result, this report should be read in conjunction with the annual financialreport for the year ended 31 December 2009.2. SIGNIFICANT ACGOUNTING POLICIESPresented below are the principal accounting policies adopted in preparing the accounts of the Group.Basis of preparationThe interim flnancial report is a general purpose fnancial report which has been prepared on a historical cost basis,except for financial instruments stated at fair value, in accordance with the requirements of the Australian AccountingStandard AASB 134 'lnterim Financial Reporting'.The interim financial report is presented in Australian Dollars and all values are rounded to the nearest thousand dollars($000) unless otherwise stated.Certain amounts recorded in the interim financial report reflect estimates and assumptions made by management basedon cunently available information.For the purpose of preparing the interim financial report, the half year has been treated as a discrete reporting period.Statement of complianceThe interim financial report complies with Australian Accounting Standards and lntemational Financial ReportingStandards ('|FRS") and interpretations. lt has been prepared on a basis of accounting policies consistent with thoseapplied in the 31 December 2009 annual financial report which was prepared in accordance with Australian AccountingStandards, and IFRS.The following standard became effective in 2010 and is relevant to the Group:. AASB 2009-5 'Fudher Amendments to Australian Accounting Sfandards arising lrom the Annual lmprovementsProject. As part of the Annual lmprovements Project, this standard makes amendments to several other accountingstandards. The only applicable amendment for the Group is the amendment to AASB 1107 'Statement of Cash Flows',which amends the classification requirements of certain expenditures.There have been no changes to accounting policy as a result of the implementation of the new standard. New disclosureequirements have been complied.with as applicable in preparing the financial report under AASB 134..The following standards and interpretations became effective in 2010 and have no impact on the Group financialstatements:. AASB 2009-8 'Amendments to Australian Accounting Standards - Group Cash-settled Share-based PaymentTransactions';. AASB 2009-9 'Amendments to Australian Accounting Standards - Additional Exemptions for First-time Adopters' ;. AASB 2009-10 'Amendments to Australian Accounting Standards - Classification of Rights /ssues'.

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Notes to the Gonsolidated lnterim Financial Statements

3. PROFIT FROM ORDINARY ACTIVITIESHalf Year to

amounts in thousands of Australian dollars 30 June 30 June2010 2009Operating profit before tax has been determined as follows:lnterest income

Cash and cash equivalentsAvailable for sale fnancial assetsLoans and advancesNon-trading derivativesTotal ntert Income

Intorest expenseDepositsDeposts payable to other financial institutionsDebt issuesNon-trading derivatives

Total lnlerest expenseNot nterest lncomeNon-lnterost lncomeAccount fees

Discharge fees and penalties(Loss/profit from sale of available for sale financial assetsProfiU(loss) from repurchase of debt securitiesCash flow hedge ineffectivenessOther

Net non-interest lncomeTotal operatlng lncome

2,041160,281

1,255,9522.6:t8

10,629150,4421,112,518

24,6441,420,912 1,298,233

494,640207,472377,71536,729

400,346313,830219,001

29.917I,l16,556 963,094

304,356 335,139

4,5'196,688(754)3l

11,2771(603)

4,29316,903

161(2,'t2e)2,299(6,547)

8,604 14,980350,119

ING Bank (Australa) Limited and controlled entitylnterim Financial Report 2010 12

312.960


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3. pRoFrr FRoM oRDTNARY ACTTVTTIES (CONTTNUED)Half Year to

amounts in thousands of Australian dollars 30 June2010 30 June2009Operating expnses

Employment expensesWages and salariesSuperannuatonShae'based payment planWorkers compensationOther employee costs

Advertising expensesDepreciation and amortisation expenses

Computer hardwareComputer softwareLeasehold improvementsMotor vehicles

Occupancy expensesTechnology expensesOther expenses

Fees and commissionsProfessional servicesStationery and printingManagement costs

- Parent company- Related entities

Telephone and communicationOther

Total operatin g expense[sLoan loss provlslons. CollectiveprovisionsSpecific provsionsTotal loan loss provlslons


4,2573,505

403248

1,832l9,ll53,1234,9261,194l06.4446,6193,2962,038

1992,757

322,3762,180

38,3203,462

505324

1,39419,7333,3881,9431,564

146,1735,0573,0921,140

2326,166

1572,2051,870

96,739

3,G014,307

9,69041,181

17

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Notes to the Consolidated lnterim FinancialStatements

4. INCOME TAX EXPENSEHalf Year to

amounts in thousands of Australian dollars 30 June 30 June 20092010lncome stiatementCunent ncome taxDefened ncome taxncome tax expense reported ln lncomo StatmentStatement of Comprehensive incomeDefened ncome tax

Revaluation of available for sale financial assetsRevaluation of cash flow hedge

lncome tax expense reported ln Statement of Comprehenslve lncomeReconciliation of prima facie ncome tiax expense on accountng profit before incometax expense:

Operating profit before taxPrima facle income tax on operating profit at 30% (2009 - 30%)Effects of amounts which are not deductible

lncome tax expense reported in lncome Statement

ING Bank (Australia) Limited and controlled entitylnterim Financal Report 2010

73,491 79,77',157.309 60,958

2972,74 (513)27,7873.041 27,274

190,42957,129

180

202,50960,753

20557.309 60,958

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5. CASH AND CASH EQUIVALENTSamounts n thousands of Australian dollars 30June 31 December2010 2009

Cash and liquid assetsDue frcm olher banks

Total cash and cash equivalents6. AVAILABLE FOR SALE FINANGIAL ASSETS

20,94711

I 1,480649,999

20,958 661,479

amounts in thousands of Australian dollars 30 June 31 December2010 2009Corporate bondsDiscount securitiesGovemment bondsMortgage backed securitiesOther securities

Total available for sale financlal assets7. LOANS AND ADVANCES

664,991 471,621122,058 2,355,2582,116,479 2,502,074137,4il 494,3221,269,14't I,299,7605,470,123 7,123,035

amounts in thousands of Australian dollars 30June 31 Oecember2010 2009Retail loansCommercial loansOther loans - parent entity- other fnancial insttutionsGros Ioans and advancesSpecific provison for impairmentCollective provison for impaiment

Total Ioans and advances


36,709,991 35,636,7123,390,219 3,549,235150,000 150,000622,000 52,70040,872,240 39,388,647(il,eoo (s3,609)40,807,40 39,335,038(30,783) (27,153140;t76,657 39,307,885

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Notes to the Gonsolidated lnterim Financial Statements

8. ASSET QUALITYemounts in thousands of Australian dollars 30June 31 December2010 2009Loans by credit qualtyNether past due nor impaired

Past due but not lmpairedlmpaired

Agelng analysis (past due but not lmpared)Less than 1 peyment past dueI paymentpastdue2 payments past due

lmpaired loans by economic sectorPrivate individualsConstruction & commercial real estate

9. PROVISION FOR IMPAIRMENT

37,418,594 36,980,5712,185,1U 1,765,792120,488 35'1,32',140.024566 39,097,6841,614,417

397,86:173,2011,301,012

301,929162,8512,185,& '1.765.792The Group uses the payments past due method for measurement of arrears, where payments past due is measured asmonthly equivalent payments. 1 payment past due is equivalent to 30 days past due.

197,986222,502

169,058182,263

420,488 351,321

amounts in thousands of Australian dollars 30 June 31 December2010 2009Specific provlslons

Opening balanceNet movement in provision

Sub-totalBad debts written offCloslng balance - specifc provisionsColleclir provlsions .Opening balance

Net movement in provisionClosing balance - collec{lve provlslonsTotal provison for impairment


53,60911,307

10,11563,722

67,916(3,116)

73,837(20,2281

64,800 53,609

27,1533,6t0

r4,601'12,552

30,783 27,15395,583 80,762

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10. DEPOSITS PAYABLE TO OTHER FINANCIAL INSTITUTIONSamounts in thousands of Australian dollars 30 June 31 December2010 2009

Certificates of depositsDeposits

Total deposts payable to other flnanclal nsttutions11. DEBT ISSUES

5,9't3,000 6,079,7611,ss7,845 2,5902477,470,W 9,070,008

amounts in thousands of Australian dollars 30 June2010 31 December2009Short term - not longer thn I year to maturityFloating rate notes

Corporate bondsTotal sho term debt issuesLong te]m

Corporate bondsEuro floating rate notesFloating rate notesRedeemable preference shares - related bodies corporateTotal long term debt issues

Total debt issues

ING Bank (Australia) Lmted and controlled enttylnterim Financial Report 2010

1,425,000451,195

1,255,012't,217,326

1,876,19s 2,472,338

4,948,316 4,032,066l,l14,000 1,602,0726,138188 4,984,9881,000,000 1,000,00013,521,104'1',1,6'19,126t5,397,299 14,091,464

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12. SEGMENT REPORTINGThe Group has three operating segments being Mortgages, Savings and Commercial loans. The segments have beenidentified based on internal reports that are reviewed and used by the Executive Committee in assessing performance and indetermining the allocation of resources.Each segment is headed by a member of the Executive Committee. The Board sets the performance targets and approves andmonitors the budgets prepared by the segment. The segments formulate strategic, commercial and financial policy inconformity with the overall strategy and performance targets set by the Board.Operating income materially comprises of a combination of transactions directly identifiable to each of the segments andintemal transfer pricing. Transfer pricing is set on an arm's length basis for inter-segment transactions. Allocation of expensesis a combination of directly identifiable allocation and segment weighting.GonsolidatedHalfvear ended 30 June 2010amounts in thousands of Australian dollars Mortgages Savings Commercialloans

Operatng incomeLoan loss provisioningAllocated expenses

Net segment earningsLoans and advancesDeposits

Halfvear ended 30 June 2009

231,sil(9,s37)(4s,750)

48,016(55,393)

33,380(8,400)(3,451)

312,960(17,937)

(104,594)176,217 17,3771 21,529 190,429

37,288,648 150,00020,553191

3,338,009 40,776,65720,553,491

amounts in thousands of Australan dollars Mortoaoes Savinos CommercialloansOperating incomeLoan loss provsoningAllocated expenses

Net segment eamingsLoans and advancesDeposits


205,r69(23,s86)(4e,546)

106,793(43,332)

38,157(27,285)(3,861)

350,119(50,871)(96,739)

132,037 63,461 7.011 202,50935,134,328 150,00019,876,64 3,766,669 39,050,997't9,876,464


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13. CONTINGENT ASSETS AND LIABILITIESThe Group has no contingent assets or liabilities at 30 June 2010 (31 December 2009 - nil).'t4. CREDIT COMMITMENTSlnevocable commitments to extend credit include all obligations on the part of the Group to provide credit facilities andbank accepted guarantees represent unconditional undertakings by the Group to support the obligations of itscustomers to third parties.amount in thousands of Australian dollars 30 June 312010 December2009Commitments to extend credit

- inevocable commitments to extend credt- bank accepted guaranteesTotal commtments to extend credlt

4815,621 4,714,17533,216 29,9754,848,&t7 4,744,150

15. SUBSEQUENT EVENTSNo subsequent events or transactions have occuned since 30 June 2010 or are pending that would have a material'effect on the lnterim Financial Statements.

ING Bank (Australia) Limited and controlled entitylnterim Financal Report 2010 19


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Other

DIRECTORS' DECLARATIONln accordance with a resolution of the Directors of ING Bank (Australia) Limited, we state that1) n the opinion of the Directors:a) the Financial Statements and notes of the Group,i) present fairly the Group's financial position as at 30 June 2010 and its performance for thehalfyear ended on that date; and) comply with Australian Accounting Standard AASB 134 -'lnterim Financial Repofting'; andb) there are reasonable grounds to believe that the Group will be able to pay its debts as and when theybecome due and payable.On behalf of the Board

Phillip R ShirriffChairman

SydneyDate: 12 August 2010


Donald J KochDirector


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Other

CONFORMITY STATEMENTConformity statement purcuant to section 5:25d paragraph 2(c) of the Dutch Financial Superuision ActThe Board is responsible for maintaining proper accounting records, for safeguardng assets and for taking reasonablesteps to prevent and detect fraud and other irregularities. lt is responsible for selectng suitable accounting polices andapplying them on a consistent basis, making judgments and estimates that are prudent and reasonable. lt is alsoresponsible for establishing and maintaining internal procedures which ensure that all major financial information isknown to the Board, so that the timeliness, completeness and correctness of the external financial reporting areassured.As required by section 5:25d paragraph 2(c) of the Dutch Financial Supervision Act, each of the signatories herebyconfirms that to the best of their knowledge: the ING Bank (Australia) Limited lnterim Accounts as included in the lnterim Financial Report for the period ended30 June 2010 gives a true and fair view of the assets, labilities, financial position and profit or loss of ING Bank

(Australia) Limited and the enterprises included in the consoldation taken as a whole;o the ING Bank (Australia) Limited lnterim Repof as included in the lnterim Financial Repof for the period ended 30June 2010 gives a true and fair view of the information required pursuant to article 5;25d, subsecton I of the DutchFinancal Supervision Act (Wet op het financieel toezicht) regarding ING Bank (Australia) Lmited and theenterprises included in the consolidation taken as a whole, being at least a list of the significant events regardingING Bank (Australia) Limited and the enterprises included in the consolidation taken as a whole that occurredduring the period ended 30 June 2010 and ther effect on the lnterim Accounts as included in the lnterim FinancialReport for the period ended 30 June 2O1O of ING Bank (Australia) Limited as well as a description of the principalrisks and uncertainties for the remaning six months of the financial year endng 31 December 2O1O regarding INGBank (Australia) Limited and lhe enterprses included in the consolidation taken as a whole.Sgned in accordance with a resolution of the Directors.

Phillip R ShrriffChairmanSydneyDate: 13August2010

Donald J KochDirector and Chief Executive Officer

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EllEnvsr *YouNc Ernst & Young Centre680 George StreetSydney NSW 2000 AustraliaGPO Box 2646 Sydney NSW 2001Tel: +61 292445555Fax: +61 2924A5959www ey.com/au

To the Board Audit Committee of ING Bank (Australia) LimitedReport on the Interim Financial ReportWe have reviewed the accompanying interim financial report of ING Bank (Australia) Limited (the company),which comprises the statement of financial position as at 30 June 2010 and the statement of comprehensiveincome, statement of changes in equity and statement of cash f lows for the half-year ended on that date, otherselected explanatory notes and the directors'declaration of the consoldated entity comprising the company andthe entities it controlled at 30 June 2010 or f rom time to time during the half-year.Directors' Responsibility for the lnterim Financial ReportThe directors of the company are responsible for the preparation and fair presentation of the interim f inancialreport. This responsibility includes establishing and maintaining internal controls relevant to the preparation andfair presentation of the interim financial report that is f ree from material misstatement, whether due to f raud orerror; selecting and applying appropriate accounting policies; and making accounting estimates that arereasonable in the circumstances.Auditor's Responsi bilityOur responsibility is to express a conclusion on the interim financial report based on our review. We conductedour review in accordance with Auditing Standard on Review Engagements ASRE 2410 Revew of lnterm andother Financial Reports Performed by the lndependent Auditor of the Entity, in order to state whethet on thebasis of the procedures described, we have become aware of any matter that makes us believe that theaccompanying f inancial report is not presented fairly, in all material respects, in accordance with IAS 34 lnterimFinancialReporting. As the auditor of ING Bank (Australia) Limited, ASRE 2410 requires that we comply with theethical requirements relevant to the audit of the annual f inancial report.A review of an interim f inancial report consists of making enquiries, primarily of persons responsible for f inancialand accountng matters, and applying analytical and other review procedures. A review is substantially less inscope than an audit conducted in accordance with Australian Auditing Standards and consequently does notenable us to obtain assurance that we would become aware of all signif icant matters that might be identif ied inan audit. Accordingly, we do not express an audit opinion.Independenceln conducting our review, we have complied with the independence requirements of Australian professionalethical pronouncements.ConclusionBased on our review, which is not an audit, we have not become aware of any matter that makes us believe thatthe interim financial report of ING Bank (Australia) Limited does not present fairly, in all material respects, thefinancial position of ING Bank (Australia) Limited as at 30 June 2010 and its financial performance and its cashflows for the half-year ended on that date, in accordance with IAS 34lnterim Financial Reportinq.

c/(Jrcrnst & Young

Sydney12 August 2010

Documents

INGD Interim Report 30062010