SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

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

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T rule 101(b) (7): o

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.

Yes o      No þ

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

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-130040) OF ING GROEP N.V. AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

TABLE OF CONTENTS

		Page
1. Operating and Financial Review and Prospects
1.1 Introduction			3
1.2 Consolidated results of operations			5
2. ING Group Condensed Consolidated Interim Accounts
2.1 Condensed consolidated balance sheet			17
2.2 Condensed consolidated profit and loss account			18
2.3 Condensed consolidated statement of cash flows			19
2.4 Condensed consolidated statement of changes in equity			20
2.5 Notes to the condensed consolidated interim accounts			21
3. Shareholders Equity and Net Profit on Basis of US GAAP
3.1 Valuation and income recognition differences between IFRS-EU and US GAAP			26
3.2 Reconciliation of shareholders’ equity and net profit to US GAAP			30
3.3 Net profit per share			30
3.4 Recently adopted and recently issued accounting standards			31
3.5 Additional Information required under US GAAP			33

1. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

1.1 INTRODUCTION

PRESENTATION OF INFORMATION

In this Report on Form 6-K (“Form 6-K”), and unless otherwise stated or the context otherwise dictates, references to “ING Groep N.V.”, “ING Groep” and “ING Group” refer to ING Groep N.V. and references to “ING”, the “Company”, the “Group”, “we” and “us” refer to ING Groep N.V. and its consolidated subsidiaries. ING Groep N.V.’s primary insurance and banking subsidiaries are ING Verzekeringen N.V. (together with its consolidated subsidiaries, “ING Insurance”) and ING Bank N.V. (together with its consolidated subsidiaries, “ING Bank”), respectively.

All references to IFRS-EU in this Form 6-K refer to International Financial Reporting Standards as adopted by the EU, including the decisions ING Group made with regard to the options available under IFRS as adopted by the EU. The consolidated financial statements of ING Group are presented in accordance with IFRS-EU. IFRS-EU differs in certain respects from accounting principles generally accepted in the United States of America (“US GAAP”). Section 3 on page 26 includes a summary of the significant differences between the two frameworks and additional disclosures required under US GAAP.

Underlying profit before tax is included within this Form 6-K as this is the performance measure utilized by the Group for segment reporting. Refer to page 5 for further discussion of underlying profit before tax and to page 10 for the reconciliation of underlying profit before tax to profit before tax by reporting segment.

Unless otherwise specified or the context otherwise requires, references to “US$” and “Dollars” are to United States dollars and references to “EUR” are to euros.

Small differences are possible in the tables due to rounding.

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

Certain of the statements contained in this Form 6-K that are not historical facts are statements 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,

•		changes in general economic conditions, in particular economic conditions in ING’s core markets,
•		changes in performance of financial markets, including developing markets,
•		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,
•		the frequency and severity of insured loss events,
•		changes affecting mortality and morbidity levels and trends,
•		changes affecting persistency levels,
•		changes affecting interest rate levels,
•		changes affecting currency exchange rates,
•		changes in general competitive factors
•		changes in laws and regulations,
•		changes in the policies of governments and/or regulatory authorities.

ING is under no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.

RECENT DEVELOPMENTS

On July 2, 2007, ING announced that agreement had been reached with Fortis Insurance Netherlands to repurchase 28,172,583 ‘A’ preference shares of ING at a price of EUR 3.618175 per share or EUR 101,933,335 in total, representing approximately 5.5% of the share capital of ING Group.

On July 27, 2007 ING announced that it had reached agreement with Banco Santander S.A. to acquire its Latin American pension business. The purchase is subject to various national regulatory approvals and is expected to be completed by the end of 2007 or in early 2008.

In July, interest groups representing policyholders started a legal proceeding against Nationale-Nederlanden with respect to the level and transparency of costs and risks for certain universal life insurance products. While it is not feasible to predict or determine the ultimate outcome, management does not believe that it will have a material adverse effect on the Group’s financial position or results of operations.

For acquisitions and disposals, see Note 2.5.6 “Acquisitions and disposals”.

For issuances, repurchases and repayment of debt and equity securities in issue see Note 2.5.7 “Issuances, repurchases and repayment of debt and equity securities in issue”.

RECENT DEVELOPMENTS IN CREDIT MARKETS

Credit markets have recently become more turbulent amid concerns about U.S. subprime mortgages, collateralised debt obligations (CDOs) and leveraged finance. This in turn has resulted in a general widening of credit spreads, reduced price transparency, reduced liquidity, ratings agencies downgrades and increased volatility across all markets. Resulting market corrections have affected, through mark-to-market valuations, our trading books and leveraged loan book. In addition, these market conditions have led and could continue to lead to an increase in retained loans resulting from leveraged finance activities, which may result in an increase in the allowance for loan losses.

To date this market disruption has had a limited impact on ING. Overall, ING considers its subprime, Alt-A and CDO/CLO exposure to be of limited size and of relatively high quality. ING’s total exposure to CDOs and CLOs was EUR 0.9 billion, or 0.07% of assets, as of July 31, 2007. As of that date, subprime exposure amounted to EUR 3.2 billion, representing 0.24% of total assets, and Alt-A exposure amounted to EUR 28.7 billion, representing 2% of total assets. The Group’s exposure to subprime and Alt-A mortgages is almost entirely through asset-backed securities.

ING classifies a security for Alt-A if one of the following three conditions is met with respect to the underlying portfolio: (a) the weighted-average FICO-credit scores are between 640 and 730, (b) the Loan-To-Value (LTV) equals or exceeds 70% but does not exceed 100% or (c) low documentation including limitations to income verification, are at least 50%, but less than 100%. ING’s Alt-A portfolio has an average FICO score of 721 and an LTV of 70%. ING does not originate subprime mortgages in the U.S. ING Direct has originated Alt-A mortgages in the U.S. in the amount of EUR 1.7 billion.

As of July 31, 2007, 93% of the subprime assets and 99.9% of the Alt-A assets were rated AAA or AA. ING is not responsible for these securities ratings, which are not a measure of liquidity and which may be changed or withdrawn without notice by the rating agencies. As of July 31, 2007, the negative revaluation, based on a mark-to-market approach reflecting credit developments and prevailing interest rates, were EUR 35 million (for CDOs and CLOs), EUR 58 million (for subprime) and EUR 233 million (for Alt-A), respectively, despite the significant market downturn. These negative revaluations are reflected through equity and no net impairments have been necessary through the income statement.

With respect to leveraged finance, “final takes” (the total amount retained by ING) are reduced through syndication and are subject to rigorous credit analysis. As of July 31, 2007, the underwriting pipeline was EUR 2.3 billion and comprised 14 transactions. The hold book was EUR 5.3 billion spread over 210 deals.

ING has been monitoring the effects of the recent market disruption, and believes the foregoing exposures have not changed materially since July 31, 2007.

1.2 CONSOLIDATED RESULTS OF OPERATIONS

The following information should be read in conjunction with, and is qualified by reference to the Group’s condensed consolidated interim accounts and other financial information included elsewhere herein. ING Group evaluates the results of its insurance operations and banking operations, including Insurance Europe, Insurance Americas, Insurance Asia/Pacific, Wholesale Banking, Retail Banking and ING Direct, using the financial performance measure of underlying profit before tax. Underlying profit before tax is defined as profit before tax excluding, as applicable for each respective segment, profit from divested units, gains/losses on divestments, certain restructuring charges and other non-operating income/expense.

While these excluded items are significant components in understanding and assessing the Group’s consolidated financial performance, ING Group believes that the presentation of underlying profit before tax enhances the understanding and comparability of its segment performance by highlighting profit before tax attributable to ongoing operations and the underlying profitability of the segment businesses. For example, we believe that trends in the underlying profitability of our segments can be more clearly identified without the effects of the realized gains/losses on divestments as the timing of these gains is largely subject to the Company’s discretion, influenced by market opportunities and ING Group does not believe that they are indicative of future results. Underlying profit before tax is not a substitute for profit before tax as determined in accordance with IFRS-EU. ING Group’s definition of underlying profit before tax may differ from those used by other companies and may change over time. Refer to the reconciliation of underlying profit before tax to profit before tax by segment in Note 2.5.5 on page 24 to our condensed consolidated interim accounts.

The following table sets forth the consolidated results of operations of ING Group for the six months ended June 30, 2007 and 2006⁽¹⁾:

		Insurance(2)								Banking(2)								Eliminations								Total
		Six months ended June 30,
		2007				2006				2007				2006				2007				2006				2007				2006
		(EUR millions)
Gross premium income			23,207				24,577																				23,207				24,577
Interest result banking operations											4,480				4,630				34				68				4,446				4,562
Commission income			943				813				1,485				1,363												2,428				2,176
Investment and Other income			6,207				5,650				1,464				1,271				76				29				7,595				6,892
Total income			30,357				31,040				7,429				7,264				110				97				37,676				38,207
Underwriting expenditure			23,894				25,160																				23,894				25,160
Other interest expenses			669				686												110				97				559				589
Operating expenses			2,746				2,626				4,944				4,474												7,690				7,100
Impairments insurance/Addition to loan loss provision banking			1				(2	)			24				(30	)											25				(32	)
Total expenditure			27,309				28,470				4,968				4,444				110				97				32,168				32,817
Profit before tax			3,048				2,570				2,460				2,820												5,508				5,390
Taxation			462				469				451				721												913				1,190
Profit before minority interests			2,586				2,101				2,009				2,099												4,595				4,200
Minority interests			89				153				53				27												142				180
Net profit (attributable to Shareholders of the parent)			2,496				1,948				1,957				2,072												4,452				4,020
Profit before tax			3,048				2,570				2,460				2,820												5,508				5,390
Gains/losses on divestments(3)							(49	)							(9	)															(58	)
Profit divested units															(37	)															(37	)
Special item (4)											252																252
Underlying profit before tax			3,048				2,521				2,713				2,774												5,760				5,295

GROUP OVERVIEW

The profit before tax of the Group for the six months ended June 30, 2007 increased by EUR 118 million, or 2.2%, to EUR 5,508 million, from EUR 5,390 million for the six months ended June 30, 2006. This reflects an increase of 18.6% and a decrease of 12.8%, respectively, for the Group’s insurance and banking operations. Underlying profit before tax increased EUR 465 million or 8.8% from EUR 5,295 million to EUR 5,760 million, excluding a provision of EUR 252 million related to the Retail Netherlands Strategy (under which Postbank and ING Bank will join forces under a single ING brand) compared to the divestments of EUR (95) million in the first six months 2006 (Piraeus, non-life Australia and Williams de Broë). The insurance business in Europe and, especially, Americas contributed to this increase as the profit before tax from Asia/Pacific was flat. The United States, Latin America and Central Europe showed improved results from life insurance, which more than offset a decline in non-life profit as the claims ratio in Canada deteriorated and pricing pressure and weather related claims in the Netherlands and Belgium impacted results. Other insurance included a capital gain on the sale of ABN Amro shares of EUR 573 million. In Wholesale Banking underlying profit before tax decreased driven by smaller releases of risk cost provisions. Retail Banking showed improved results due to Poland, Kookmin Bank, Private Banking Asia and Vysya Bank offset by a lower result in Belgium. ING Direct reported decreased results as improved results in the euro-countries and Australia could not fully offset decreased results in the United States, United Kingdom and Canada.

The Group’s tax charge for the six months ended June 30, 2007 decreased to EUR 913 million from EUR 1,190 million for the six months ended June 30, 2006. This represents a decrease in the overall effective tax rate to 16.6% for the six months ended June 30, 2007, from 22.1% for the six months ended June 30, 2006, mainly due to tax-exempt capital gains on equities and a lower nominal tax rate in the Netherlands.

Net profit for the six months ended June 30, 2007 increased by EUR 432 million, or 10.7%, to EUR 4,452 million from EUR 4,020 million for the six months ended June 30, 2006. Net profit from the banking operations decreased 5.6% to EUR 1,957 million, due to a net after tax provision of EUR 188 million (pre-tax EUR 252 million) for the Retail Netherlands Strategy and higher expenses partly offset by higher income and lower taxation. Net profit from insurance operations increased 28.1% to EUR 2,496 million due to lower underwriting expenditure, increased commission income and the previously- mentioned capital gain on ABN Amro shares, partly offset by a decline in premium income and increased operating expenses.

US GAAP net profit for the six months ended June 30, 2007 of EUR 4,226 million is EUR 226 million lower than the IFRS-EU net profit of EUR 4,452 million for that period. US GAAP net profit for the six months ended June 30, 2006 of EUR 3,239 million was EUR 781 million lower than the IFRS-EU net profit of EUR 4,020 million for that period. The difference between IFRS-EU and US GAAP net profit changed between June 30, 2006 and June 30, 2007 by EUR 555 million, primarily due to the change of EUR 1,033 million in the reversal adjustment of IFRS-EU hedge accounting for US GAAP reporting. This reversal is inherently volatile due to fluctuations in the interest rates and changes in volume of the hedged items. In addition, taxation changed by EUR (474) million, which includes the tax effect on the reversal of hedge accounting and certain other taxation adjustments in 2006. All other differences between IFRS and US GAAP had a net impact of EUR (312) million (pre-tax) for the six months ended June 30, 2007 and EUR (283) million (pre-tax) for the six months ended June 30, 2006. Refer to pages 26-29 for a description of the significant differences between IFRS-EU and US GAAP and a reconciliation of certain IFRS-EU income statement and balance sheet items to US GAAP.

The debt/equity ratio of ING Groep N.V. increased to 9.32% from 9.01% at December 31, 2006. The increase was largely due to the dividend pay-out and the share buyback (in June 2007 ING started a EUR 5.0 billion share buyback program that is expected to run until June 2008), which influenced both adjusted equity as well as core debt. The capital coverage ratio for ING’s insurance operations increased to 297% of regulatory requirements at the end of June 2007, compared with 274% at December 31, 2006. The Tier-1 ratio of ING Bank N.V. stood at 7.55% on June 30, 2007 and 7.63% as at December 31, 2006, well above the regulatory required minimum level of 4%.

INSURANCE OPERATIONS

Income

Total income from insurance operations for the six months ended June 30, 2007 decreased by EUR 683 million, or 2.2% to EUR 30,357 million from EUR 31,040 million for the six months ended June 30, 2006. Premium income in Group’s life and non-life operations decreased by 6.1% and 2.4%, respectively. Total premium income decreased by 5.6%, or EUR 1,370 million, which was completely due to Insurance Americas where lower sales of fixed annuities in the United States decreased life premium income by 13.1%, and Japan. The effect of exchange rate movements negatively affected growth in premium income by EUR 1,512 million (mainly due to the weakening of the Canadian and US dollar versus the euro).

Investment and other income increased by EUR 557 million or 9.9% to EUR 6,207 million in the first six months of 2007 as compared to the first six months of 2006 due to increased gains on shares, particularly the capital gain of EUR 573 million on ABN Amro shares, and higher dividend income which were partly offset by decreased income from debt securities and loans and negative changes in fair value non-trading derivatives.

Commission income increased by EUR 130 million, or 16.0% to EUR 943 million led by an increase in Insurance Europe, mostly in Central Europe, and Asia/Pacific reflecting growth in assets under management.

Underwriting expenditure

Underwriting expenditure decreased by 5.0% or EUR 1,266 million from EUR 25,160 million to EUR 23,894 million. The underwriting expenditure of the life insurance operations decreased by EUR 1,431 million or 6.3% to EUR 21,192 million for the first six months of 2007. The underwriting expenditure of the non-life insurance operations increased by EUR 162 million or 6.4% to EUR 2,702 million in the first six months of 2007.

Expenses

Operating expenses for the Group’s insurance operations over the first six months of 2007 increased by EUR 120 million, or 4.6%, to EUR 2,746 million, from EUR 2,626 million for the first six months of 2006, reflecting investments to support the growth of the business, particularly in developing markets. Exchange rate differences of EUR (119) million limited the increase in operating expenses.

Profit before tax and net profit

The profit before tax from the Group’s insurance activities for the six months ended June 30, 2007 increased by EUR 478 million, or 18.6%, to EUR 3,048 million, from EUR 2,570 million for the six months ended June 30, 2006, reflecting an increase in profits of the life operations of 37.8% and a decrease of the non-life operations of 25.7%. The increase in profit of the life operations was driven by higher results in Belgium, Central and Rest of Europe (excluding the Netherlands), the United States, Latin America and Australia, offset by a decline in Japan due to volatility from unhedged positions related to an increase in implied market volatility. The decrease in profit growth of the non-life operations was mainly caused by lower results in the Netherlands, Belgium, Canada and Mexico due to pricing pressure, higher claims and reserve strengthening. The combined ratio increased 7.1 percentage points to 95.9% from 88.8% driven by a deterioration of the claims ratio. Net profit for the Group’s insurance operations for the six months ended June 30, 2007 increased by EUR 548 million, or 28.1%, to EUR 2,496 million, from EUR 1,948 million for the six months ended June 30, 2006. The effective tax rate for the Group’s insurance operations for the six months ended June 30, 2007 was 15.2%, reflecting high tax-exempt gains on equities compared to 18.2% for the six months ended June 30, 2006.

Underlying profit before tax

Underlying profit before tax from the insurance operations increased by 20.9% or EUR 527 million to EUR 3,048 million from EUR 2,521 million in the first six months of 2006. Underlying profit of Insurance Europe increased by 1.3% to EUR 1,162 million due to improved results in the life businesses and supported by higher investment results, offset by a decrease in non-life businesses due to severe weather claims. Underlying profit before tax in Insurance Americas increased by 19.7% from EUR 941 million in the first six months of 2006 to EUR 1,126 million in the first six months of 2007, the increase was driven by a strong performance in the United States due to higher investment gains and growth in assets under management and a strong improvement in Latin America. In Canada results deteriorated

due to higher claim costs and lower investment gains. Underlying profit from Insurance Asia decreased by 0.3% to EUR 312 million as higher results in Australia were partly offset by lower results in Japan due to volatility from unhedged positions.

BANKING OPERATIONS

Income

Total income from banking increased by 2.3%, or EUR 165 million, to EUR 7,429 million from EUR 7,264 million for the six months ended June 30, 2006, mainly due to strong growth in investment income and commission income, partly offset by decreases in interest result and lower other income.

The net interest result for the six months ended June 30, 2007 decreased by EUR 150 million, or 3.2%, to EUR 4,480 million, from EUR 4,630 million for the six months ended June 30, 2006, attributable to ING Direct (EUR (122) million) and Wholesale Banking (EUR (82) million), partly compensated by Other banking (EUR 57 million). The total interest margin in the six months ended June 30, 2007 was 0.95%, a decrease of 11 basis points compared with the six months ended June 30, 2006, mainly due to a flattening of the yield curve, changes in the product mix, lower prepayment penalties on mortgages and the ongoing growth of ING Direct with a lower average interest margin.

Commission income for the six months ended June 30, 2007 increased by EUR 122 million, or 9.0%, to EUR 1,485 million, from EUR 1,363 million for the six months ended June 30, 2006. The increase in commission income was primarily due to increased management fees (EUR 66 million, particularly ING Real Estate and Wholesale Belgium) and higher other commission income from the international Wholesale Banking units.

Investment income and other income increased by EUR 193 million, or 15.2%, to EUR 1,464 million for the six months ended June 30, 2007, from EUR 1,271 million for the six months ended June 30, 2006. The strong increase reflects higher realized gains on equities and bonds (increase EUR 229 million, including a sizeable gain from Wholesale Banking’s sale of an equity stake), as well as higher rental income (increase EUR 67 million) and higher fair value changes on real estate (EUR 31 million), partly offset by lower results from the trading portfolio and lower valuation results from non-trading derivatives for which hedge accounting is not applied.

Expenses

Operating expenses for the six months ended June 30, 2007 increased by EUR 470 million, or 10.5%, to EUR 4,944 million, from EUR 4,474 million for the six months ended June 30, 2006. The increase is mainly attributable to a 2007 provision of EUR 252 million related to the Retail Netherlands Strategy (combining ING Bank and Postbank). The remaining increase, EUR 218 million or 4.9%, includes investments to support the growth of the business, notably at ING Real Estate and the retail banking activities in developing markets.

Addition to the provision for loan losses

The provision for loan losses reflected an addition of EUR 24 million for the six months ended June 30, 2007, compared to a release of EUR 30 million for the six months ended June 30, 2006, representing an increase of EUR 54 million. The banking business still benefits from a benign credit environment, though net risk costs began to increase as releases of past provisions diminish.

Profit before tax and net profit

The profit before tax from ING’s banking operations for the six months ended June 30, 2007 decreased by EUR 360 million, or 12.8%, to EUR 2,460 million, from EUR 2,820 million for the six months ended June 30, 2006. The effective tax rate for ING’s banking operations decreased from 25.6% (EUR 721 million) for the six months ended June 30, 2006, to 18.3% (EUR 451 million) for the six months ended June 30, 2007, caused by high tax-exempted gains, the release of some tax liabilities and the impact of a tax asset in Germany. Net profit decreased by EUR 115 million, or 5.6%, to EUR 1,957 million.

Underlying profit before tax and net profit

ING’s banking operations showed a decrease in underlying profit before tax, which excludes the effects of divestments and special items, of EUR 61 million, or 2.2%, from EUR 2,774 million in the first six months of 2006 to EUR 2,713 million in the first six months of 2007. Underlying net profit increased by EUR 97 million, or 4.7%, from EUR 2,048 million to EUR 2,145 million, due to the low effective tax rate.

CONSOLIDATED ASSETS AND LIABILITIES

The following table sets forth ING Group’s condensed consolidated assets and liabilities at June 30, 2007 and December 31, 2006:

		June 30,				Dec. 31,
(amounts in EUR billion, except for amounts per share)		2007				2006
Financial assets at fair value through P&L			354.1				317.5
Investments			304.6				311.6
Loans and advances to customers			516.9				474.4
Total assets (1)			1,319.4				1,226.3
Life			244.1				237.9
Non-life			10.6				10.1
Investment contracts			23.1				20.7
Insurance and investment contracts			277.8				268.7
Amounts due to banks			136.7				120.8
Customer deposits and other funds on deposit			526.9				496.7
Financial liabilities at fair value through P&L			176.3				146.6
Debt securities in issue/other borrowed funds			112.5				107.8
Total liabilities (1)			1,281.2				1,188.0
Shareholders’ equity			38.2				38.3
Shareholders’ equity per ordinary share			17.72				17.78

Total assets

Total assets increased by EUR 93.1 billion, or 7.6%, in the first six months of 2007 to EUR 1,319.4 billion from EUR 1,226.3 billion at December 31, 2006, primarily reflecting increased loans and advances to customers of EUR 42.5 billion and increased financial assets at fair value of EUR 36.6 billion.

Loans and advances to customers

Loans and advances to customers increased by EUR 42.5 billion, or 9.0%, to EUR 516.9 billion at June 30, 2007. Of this amount EUR 31.2 billion refers to loans and advances to customers within insurance operations and EUR 488.9 billion relates to loans and advances to customers within banking operations, of which EUR 251.7 billion relates to corporate lending and EUR 239.7 billion to personal lending.

Shareholders’ equity

Shareholders’ equity decreased by EUR 0.1 billion, or 0.3%, to EUR 38.2 billion at June 30, 2007 compared to EUR 38.3 billion at December 31, 2006. This decrease was mainly due to unrealized revaluations of EUR (1.9) billion, a change in cash-flow hedge reserve of EUR (1.0) billion, realized gains/losses transferred to profit and loss of EUR (1.2) billion and the cash dividend payment of EUR (1.6) billion, offset by retained net profit of EUR 4.5 billion and transfer to insurance liabilities/DAC of EUR 1.3 billion.

SEGMENT REPORTING

ING Group’s segments are based on the management structure of the Group, which is different from its legal structure.

The following table sets forth the contribution of our six business lines to our underlying profit before tax for the six months ending June 30, 2007 and 2006:

		Insurance				Insurance				Insurance				Wholesale				Retail												Total
(EUR millions)		Europe				Americas				Asia/Pacific				Banking				Banking				ING Direct				Other(1)				Group
June 30, 2007
Total income			9,047				14,051				6,637				3,102				3,231				1,131				477				37,676
Total expenditure			7,885				12,925				6,324				1,698				2,389				795				150				32,168
Profit before tax			1,162				1,126				312				1,404				842				336				327				5,508
Divestments
Special items																			252												252
Underlying profit before tax			1,162				1,126				312				1,404				1,094				336				327				5,760
June 30, 2006
Total income			8,492				15,247				7,003				3,033				3,070				1,173				189				38,207
Total expenditure			7,311				14,306				6,675				1,545				2,048				818				114				32,817
Profit before tax			1,181				941				328				1,488				1,022				355				75				5,390
Divestments			(34	)							(15	)			(36	)							(10	)							(95	)
Special items
Underlying profit before tax			1,147				941				313				1,452				1,022				345				75				5,295

Insurance Europe

		Six months ended
		June 30,
		2007				2006
		(EUR millions)
Premium income
Life			4,786				4,402
Non-life			1,250				1,282
Total			6,036				5,684
Commission income			246				171
Investment and Other income			2,766				2,635
Total income			9,047				8,492
Underwriting expenditure			6,614				6,130
Other interest expenses			333				279
Operating expenses			938				900
Investment losses			1
Total expenditure			7,885				7,311
Profit before tax:
Life			935				909
Non-life			227				272
Profit before tax			1,162				1,181
Gains/losses on divestments							(34	)
Underlying profit before tax			1,162				1,147

Income

Total income of Insurance Europe for the six months ended June 30, 2007 increased by EUR 558 million, or 6.6% to EUR 9,048 million from EUR 8,490 million for the six months ended June 30, 2006, reflecting increases in life premium income, commission income, and in investment and other income.

Premium income in the life operations increased by 8.7% driven by higher premiums in Belgium (increase 17.1%) following a successful marketing campaign to boost sales of investment products through the bank channel, and in Central and Rest of Europe (increase 22.7%) lifted by higher sales across the region, especially in Spain and Hungary. Premiums in the Netherlands decreased by 3.8% caused mainly by immediate annuity sales and rate increases to enhance the internal rates of return. Premium income in non-life operations decreased by 2.5%, following rate reductions in motor and group income in the Netherlands and the divestment of the group medical portfolio in Belgium. Total premium income increased by 6.2%.

Commission income increased by EUR 75 million or 43.9% to EUR 246 million, driven by higher asset management and pension fees, especially in Central and Rest of Europe.

Investment and other income increased by EUR 131 million or 5.0% to EUR 2,766 million in the first six months of 2007 as compared to the first six months of 2006 driven by growth of assets under management as well as higher returns on public and private equity. This income growth from 2006 to 2007 was partly offset by the EUR 34 million gain related to the unwinding of the cross-shareholding with Piraeus Bank in Greece in the first six months of 2006.

Expenses

Operating expenses of Insurance Europe over the first six months of 2007 increased by EUR 38 million, or 4.2%, to EUR 938 million, from EUR 900 million for the first six months 2006. This increase was driven by continued business growth in Central and Rest of Europe (including start-up costs in Bulgaria, Romania and Russia) and more external staffing in the Netherlands. Belgium expenses declined as the company prepared for the sale of the broker and employee benefits business.

Profit before tax

The profit before tax of Insurance Europe for the six months ended June 30, 2007 decreased by EUR 19 million, or 1.6%, to EUR 1,162 million, from EUR 1,181 million for the six months ended June 30, 2006, reflecting a decrease in profits of the non-life operations by 16.5%, partly offset by a 2.9%

increase of the life operations. The decrease in profit of the non-life operations was driven by lower Fire results in the Netherlands and Belgium. The profit growth of the life operations, mainly driven by Belgium and Central and Rest of Europe, was negatively affected by the gain related to Piraeus in 2006.

Insurance Americas

		Six months ended
		June 30,
		2007				2006
		(EUR millions)
Premium income:
Life			9,000				10,351
Non-life			2,076				2,118
Total			11,076				12,469
Commission income			510				494
Investment and Other income			2,465				2,284
Total income			14,051				15,247
Underwriting expenditure			11,490				12,810
Other interest expenses			194				235
Operating expenses			1,241				1,262
Investment losses							(1	)
Total expenditure			12,925				14,306
Profit before tax:
Life			882				550
Non-life			244				391
Profit before tax			1,126				941
Gains/losses on divestments/Profit from divested units
Underlying profit before tax			1,126				941

Income

Total income of Insurance Americas for the six months ended June 30, 2007 decreased by EUR 1,196 million, or 7.8% to EUR 14,051 million from EUR 15,247 million for the six months ended June 30, 2006. Currency effects (mainly the weakening of the Canadian and US dollar versus the euro) contributed EUR 1,191 million to the decrease.

Premium income in the life operations decreased by 13.1% and premium income in non-life operations decreased by 2.0%. The effect of exchange rate movements negatively affected growth in premium income by EUR 977 million. Excluding currency effects total premium income decreased by EUR 416 million, or 3.6% (excluding currency effects life premium decreased 5.6% and non-life premium increased 6.0%).The decline of life premium reflected lower sales of fixed annuities in the US and the growth of non-life premiums was driven by growth in the number of insured risks in Canada and higher sales in Mexico.

Commission income increased by EUR 16 million, or 3.2% to EUR 510 million. Excluding the effect of exchange rate movements the increase was EUR 54 million, or 11.8%, mainly due to higher fee income from growth in assets under management.

Investment and other income increased by EUR 181 million or 7.9% to EUR 2,465 million in the first six months of 2007 as compared to the first six months of 2006. Excluding the effect of exchange rate movements the increase was EUR 357 million, or 16.9%, mainly due to higher investment income in the United States (increase EUR 260 million), Mexico and South America.

Expenses

Operating expenses of Insurance Americas over the first six months of 2007 decreased by EUR 21 million, or 1.7%, to EUR 1,241 million, from EUR 1,262 million for the first six months 2006. Excluding the effect of exchange rate movements, operating expenses increased by EUR 76 million, or 6.5%, mainly due to staff increases to support customer service and the expansion of distribution in US Wealth and Asset Management.

Profit before tax

Profit before tax from Insurance Americas for the six months ended June 30, 2007 increased by EUR 185 million, or 19.7%, to EUR 1,126 million, from EUR 941 million for the six months ended June 30, 2006, reflecting an increase in profits of the life operations of 60.4% and a decrease in profits of the non-life operations of 37.6%. Excluding the effect of exchange rate movements the profit of life operations increased by 73.8% and profit of non-life decreased by 32.7%. The increase in profit of the life operations was driven by higher investment income, DAC and reserve unlocking as a result of favorable equity markets and higher fee income supported by an increase in assets under management. Life profit in Latin America increased due to strong results in the pension business in Peru and Chile and higher investment gains in Mexico. The decreased profit of the non-life operations was driven by less favorable underwriting experience, especially in Canada, Mexico and Chile, partially offset by favorable results in Brazil, primarily in the motor and P&C lines.

Insurance Asia/Pacific

		Six months ended
		June 30,
		2007				2006
		(EUR millions)
Gross premiums written:
Life			6,071				6,388
Non-life			13				23
Total			6,084				6,411
Commission income			183				146
Investment and Other income			370				446
Total income			6,637				7,003
Underwriting expenditure			5,767				6,212
Other interest expenses			45				5
Operating expenses			513				458
Total expenditure			6,324				6,675
Profit from insurance operations before tax:
Life			311				310
Non-life			1				18
Profit before tax			312				328
Gains/losses on divestments/Profit from divested units							(15	)
Underlying profit before tax			312				313

Income

Total income from Insurance Asia/Pacific for the six months ended June 30, 2007 decreased by EUR 366 million, or 5.2% to EUR 6,637 million from EUR 7,003 million for the six months ended June 30, 2006, due to currency rates and a decline in sales in Japan. Excluding the effect of exchange rate movements there was an increase in total income of EUR 236 million, or 3.7%, almost fully reflected in higher premiums (increase EUR 228 million).

Premium income in the life operations decreased by 5.0% and premium income in the non life operations decreased by 43.5%. Excluding currency effects, premium income in the Group’s life operations increased by EUR 236 million or 4.0% and premium income in non-life operations decreased by EUR 8 million or 38.1%; total premium income increased by 3.9%, primarily due to increased sales in South Korea and Taiwan. Premium income in Japan decreased by 15.3% excluding currency impact due to a decline in sales of single-premium variable annuities (SPVA) and uncertainty about the tax treatment of increasing term products, which is one of the major corporate owned life insurance (COLI) products.

Commission income increased by EUR 37 million, or 25.3% to EUR 183 million, reflecting growth in assets under management at ING Investment Management Asia and in the Australian life and wealth management business.

Investment and other income decreased by EUR 76 million or 17.0% to EUR 370 million in the first six

months of 2007 as compared to the first six months of 2006, but excluding currency effects the decrease was 7.7% mainly due to a decline in fair value changes on derivatives, the majority of which hedge policy guarantees in Japan and Taiwan. These declines were partly offset by higher income from dividends and debt securities/loans.

Expenses

Operating expenses of Insurance Asia/Pacific over the first six months of 2007 increased by EUR 55 million, or 12.0%, to EUR 513 million, from EUR 458 million for the first six months of 2006. Excluding currency effects the increase was 19.0%, reflecting the continued growth of the existing business as well as investments to support rapid expansion of the Greenfield businesses (business in new countries).

Profit before tax

The profit before tax of Insurance Asia/Pacific for the six months ended June 30, 2007 decreased by EUR 16 million, or 4.9%, to EUR 312 million, from EUR 328 million for the six months ended June 30, 2006. Excluding currency effects profit before tax was flat: Life insurance increased by EUR 16 million, or 5.4% due to higher results in Australia, Malaysia and South Korea partly offset by lower results in Japan due to volatility from unhedged positions, and non-life profit decreased by EUR 16 million reflecting the gain on the sale of Australia non-life of EUR 15 million in the first quarter of 2006.

In Taiwan a charge of EUR 5 million was taken in the first six months 2007 to strengthen reserves in light of the low interest environment, reducing profit in the six months to nil. Interest rates increased in the first six months 2007, resulting in an improvement of the reserve adequacy level of ING Life Taiwan.

Higher interest rates in Taiwan helped strengthen ING’s reserve adequacy to a confidence level of 70% (EUR 946 million) at the end of June, up from 57% (EUR 298 million) at the end of December 2006. The reserve adequacy at a 50% confidence level for Insurance Asia/Pacific increased to EUR 3.8 billion as of June 30, 2007.

Wholesale Banking

		Six months ended
		June 30,
		2007				2006
		(EUR millions)
Interest result			1,235				1,317
Commission income			712				668
Investment and Other income			1,155				1,048
Total income			3,102				3,033
Operating expenses			1,753				1,674
Addition to the provision for loan losses			(55	)			(129	)
Total expenditure			1,698				1,545
Profit before tax			1,404				1,488
Gains/losses on divestments/Profit from divested units							(36	)
Underlying profit before tax			1,404				1,452

Income

Total income increased by EUR 69 million, or 2.3%, to EUR 3,102 million, attributable to a strong growth of investment and other income (increase EUR 107 million) and higher commission income (increase EUR 44 million), partly offset by EUR 82 million lower interest. The strong growth of investment income reflects higher realized gains on equities and bonds, including a sizeable investment gain on the sale of an equity stake related to a past debt refinancing, as well as higher rental income and higher fair value changes at ING Real Estate, partly offset by the effects of more difficult trading conditions on other income. The increase in commission income is mainly due to the strong growth of assets under management at ING Real Estate. The decline of the interest result reflects the flattening yield curve environment.

The income development was affected by the asymmetrical tax treatment embedded in the equity

derivative trading activities and their related cash equity hedges. Corrected for that impact, total income increased by 4.0%.

Expenses

Operating expenses increased EUR 79 million, or 4.7%, to EUR 1,753 million. The increase reflects EUR 46 million of increased compliance-related costs and EUR 31 million related to growth at ING Real Estate. The cost/income ratio for Wholesale Banking deteriorated to 56.5% from 55.2% in the first six months of 2006, but improved from 59.4% in full year 2006.

Profit before tax and underlying profit before tax

Profit before tax decreased by EUR 84 million, or 5.6%, reflecting a decrease in releases from provisions for loan losses of EUR 74 million and an increase in expenses of EUR 79 million, which were, only partly, offset by EUR 69 million higher income. Excluding gains/losses on divestments and the profits of divested units, underlying profit before tax decreased by EUR 48 million, or 3.3%, to EUR 1,404 million. The profit development was also affected by the asymmetrical tax treatment embedded in the equity derivative trading activities and their related cash equity hedges. Corrected for the tax asymmetry, underlying profit before tax showed a slight increase of 0.5%.

Retail Banking

		Six months ended
		June 30,
		2007				2006
		(EUR millions)
Interest result			2,320				2,323
Commission income			721				649
Investment and Other income			190				98
Total income			3,231				3,070
Operating expenses			2,336				1,973
Addition to the provision for loan losses			54				75
Total expenditure			2,389				2,048
Profit before tax			842				1,022
Special items			252
Underlying profit before tax			1,094				1,022

Income

Total income increased by EUR 161 million, or 5.2%, to EUR 3,231 million, reflecting the growth of business volumes. The interest result stabilized as volume growth in almost all products offset the impact of lower interest margins and lower income from prepayment penalties on mortgages. Commission income increased EUR 72 million, or 11.1%, mainly due to higher management fees, securities broking commission and payment fees. The growth of investment and other income is among others due to the higher dividend income from Kookmin Bank.

Expenses

Operating expenses increased by EUR 363 million, or 18.4%, from EUR 1,973 million to EUR 2,336 million. The increase reflects a 2007 provision of EUR 252 million related to the Retail Netherlands Strategy. Excluding this item, operating expenses rose EUR 110 million, or 5.6%. Expenses in the Netherlands increased 5.6%, in part due to outsourcing expenses. Outside the Netherlands and Belgium expenses were up 10.4%, driven by investments to grow the businesses in Poland, India, Romania and the Private Banking activities in Asia. The cost/income ratio deteriorated to 72.3% from 64.3% in the first six months of 2006. Excluding the provision regarding the Retail Netherlands Strategy the underlying cost/income ratio nearly stabilized at 64.5%.

Profit before tax and underlying profit before tax

Profit before tax decreased by EUR 181 million, or 17.7%, mainly due to the aforementioned provision in 2007 related to the Retail Netherlands Strategy. Excluding this item, underlying profit before tax increased by EUR 72 million, or 7.0%. Higher results from Poland, Kookmin Bank, Private Banking

Asia and Vysya Bank were partly offset by a lower result from Belgium, while results in the Netherlands were slightly up by 0.4%.

ING Direct

		Six months ended
		June 30,
		2007				2006
		(EUR millions)
Interest result			963				1,085
Commission income			49				47
Investment and Other income			119				41
Total income			1,131				1,173
Operating expenses			769				794
Addition to the provision for loan losses			26				24
Total expenditure			795				818
Profit before tax			336				355
Gains/losses on divestments/Profit from divested units							(10	)
Underlying profit before tax			336				345

Income

Total income decreased by EUR 42 million, or 3.6%, to EUR 1,131 million, as the EUR 122 million lower interest result was largely offset by higher realized gains on bonds and loans. The interest margin decreased from 0.92% to 0.76%, mainly due to the flat or inverted yield curves in most currency zones, combined with rising interest rates. The decrease in total income from 2006 to 2007 reflects the impact of the divestment of Degussa Bank at the end of 2006. Excluding this effect, underlying income decreased by EUR 4 million (0.4%).

Expenses

Operating expenses decreased by EUR 25 million, or 3.1%, to EUR 769 million, mainly attributable to the divestment of Degussa Bank (effect EUR 26 million). Higher staff and other expenses to support the growth of the business were offset by lower marketing costs. The cost/income ratio of ING Direct slightly deteriorated to 68.0% from 67.7% in the first half year of 2006.

Profit before tax and underlying profit before tax

Profit before tax decreased by EUR 19 million, or 5.4%, to EUR 336 million from EUR 355 million in the first half of 2006. Higher results were posted in all euro-zone countries (Germany, Italy, France, Austria and Spain) as well as in Australia. Profit in the USA declined by EUR 48 million, due to increases in the rates paid to clients, an inverse yield curve and investments to expand the geographical footprint and grow the mortgage portfolio. Profit from Canada declined by EUR 17 million as a result of higher client rates and lower capital gains. ING Direct UK reported a loss of EUR 7 million in the first six months of 2007 compared with a profit of EUR 11 million in the first six months of 2006, due to margin pressure and investments in mortgage growth.

2. ING GROUP CONDENSED CONSOLIDATED INTERIM ACCOUNTS

2.1 Condensed consolidated balance sheet of ING Group as at

		June 30,				December 31,
(in EUR million)		2007*				2006
Assets
Cash and balances with central banks			12,718				14,326
Amounts due from banks			56,675				39,868
Financial assets at fair value through profit or loss			354,101				317,470
Investments			304,611				311,581
Loans and advances to customers			516,860				474,437
Reinsurance contracts			6,399				6,529
Property and equipment			6,225				6,031
Other assets			61,843				56,065
Total assets			1,319,432				1,226,307
Shareholders’ equity (parent)			38,166				38,266
Minority interests			2,110				2,949
Total equity			40,276				41,215
Liabilities
Preference shares			215				215
Subordinated loans			6,673				6,014
Debt securities in issue/other borrowed funds			112,524				107,772
Insurance and investment contracts			277,764				268,683
Amounts due to banks			136,718				120,839
Customer deposits and other funds on deposit			526,941				496,680
Financial liabilities at fair value through profit or loss			176,342				146,611
Other liabilities			41,980				38,278
Total liabilities			1,279,157				1,185,092
Total equity and liabilities			1,319,432				1,226,307

2.2 Condensed consolidated profit and loss account* of ING Group for the six month period ended

		3 months ended								6 months ended
		June 30,				June 30,				June 30,				June 30,
(in EUR million)		2007				2006				2007				2006
Interest income banking operations			18,028				14,993				35,463				28,735
Interest expense banking operations			15,724				12,798				31,017				24,173
Interest result from banking operations			2,304				2,195				4,446				4,562
Gross premium income			11,573				12,052				23,207				24,577
Investment income			3,559				2,799				6,456				5,444
Commission income			1,219				1,055				2,428				2,176
Other income			505				796				1,139				1,448
Total income			19,160				18,897				37,676				38,207
Underwriting expenditure			11,843				12,355				23,894				25,160
Addition to loan loss provision (release)			25				(7	)			25				(32	)
Other impairments (reversals)			(13	)							(22	)			(2	)
Staff expenses			2,079				2,015				4,179				4,008
Other interest expenses			298				296				559				589
Other operating expenses			1,880				1,575				3,533				3,094
Total expenditure			16,112				16,234				32,168				32,817
Profit before tax			3,048				2,663				5,508				5,390
Taxation			412				562				914				1,191
Net profit (before minority interests)			2,636				2,101				4,594				4,199
Attributable to:
Shareholders of the parent			2,559				2,014				4,452				4,020
Minority interests			76				88				142				180
			2,636				2,102				4,594				4,200

		June 30,				June 30,				June 30,				June 30,
(in EUR)		2007				2006				2007				2006
Earnings per ordinary share (attributable to shareholders of the parent)			1.18				0.93				2.06				1.86
Diluted earnings per ordinary share			1.17				0.92				2.04				1.84

2.3 Condensed consolidated statement of cash flows* of ING Group for the six month periods ended

		June 30,				June 30,
(in EUR million)		2007				2006
Net cash flow from operating activities			129				12,707
Investments and advances:
- group companies			(276	)
- associates			(452	)			(185	)
- available-for-sale-investments			(144,543	)			(154,824	)
- investment properties			(298	)			(287	)
- property and equipment			(456	)			(231	)
- assets subject to operating lease			(746	)			(596	)
- investments for the risk of policyholders			(25,453	)			(22,135	)
- other investments			(112	)			(84	)
Disposals and redemptions:
- group companies			70
- associates			360				214
- available-for-sale investments			142,755				135,858
- held-to-maturity investments			322				557
- investment properties			138				196
- property and equipment			102				47
- assets subject to operating lease			200				224
- investments for the risk of policyholders			23,444				19,566
- other investments			9				25
Net cash flow from investment activities			(4,936	)			(21,655	)
Proceeds from issuance of subordinated loans			719				865
Proceeds from borrowed funds and debt securities			165,555				128,428
Repayments of borrowed funds and debt securities			(162,078	)			(121,109	)
Issuance of ordinary shares			350				2
Payments to acquire treasury shares			(990	)			(737	)
Sales of treasury shares			291				209
Dividends paid			(1,600	)			(1,396	)
Net cash flow from financing activities			2,247				6,262
Net cash flow			(2,560	)			(2,686	)
Cash and equivalents at beginning of period			(1,795	)			3,335
Effect of exchange-rate changes on cash and equivalents			140				(504	)
Cash and equivalents at end of period			(4,215	)			145
Cash and cash equivalents comprises the following items:
Treasury bills and other eligible bills			6,898				7,432
Amounts due from/to banks			(23,831	)			(22,869	)
Cash and balances with central banks			12,718				15,582
Cash and equivalents at end of period			(4,215	)			145

2.4 Condensed consolidated statement of changes in equity* of ING Group for the six month periods ended

		June 30, 2007												June 30, 2006
		Total												Total
		share-												share-
		holders’												holders’
		equity				Minority								equity				Minority
(in EUR million)		(parent)				interests				Total				(parent)				Interests				Total
Balance at beginning of period			38,266				2,949				41,215				36,736				1,689				38,425
Unrealized revaluations after taxation			(1,885	)			(34	)			(1,919	)			(5,257	)			(35	)			(5,292	)
Realized gains/losses transferred to profit and loss			(1,226	)							(1,226	)			(362	)							(362	)
Change in cash flow hedge reserve			(1,033	)							(1,033	)			(776	)							(776	)
Transfer to insurance liabilities/DAC			1,259				4				1,263				1,794				(2	)			1,792
Employee stock options and share plans			45								45				47								47
Exchange rate differences			69				1				70				(1,138	)			(1	)			(1,139	)
Total amount recognized directly in equity			(2,771	)			(29	)			(2,800	)			(5,692	)			(38	)			(5,730	)
Net profit			4,452				142				4,594				4,020				180				4,200
Change in composition of the Group							(952	)			(952	)							(22	)			(22	)
Dividend			(1,585	)							(1,585	)			(1,396	)							(1,396	)
Purchase/sale of treasury shares			(546	)							(546	)			(456	)							(456	)
Exercise of warrants and options			350								350				2								2
Balance at end of period			38,166				2,110				40,276				33,214				1,809				35,023

The accompanying notes referenced from 2.5.1 to 2.5.7 are an integral part of these condensed consolidated interim accounts

2.5 Notes to the condensed consolidated interim accounts

2.5.1 Basis of preparation

These condensed consolidated interim accounts have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”. The accounting principles used to prepare these condensed consolidated interim accounts comply with International Financial Reporting Standards as adopted by the European Union and are consistent with those set out in the notes to the 2006 Consolidated Annual Accounts of ING Group except that as of January 1, 2007, the level at which the adequacy test of the provision for insurance contracts is evaluated has been aligned to the business lines, which is the level at which performance is evaluated and segments are reported.

Previously, if it was determined using a best estimate (50%) confidence level that a shortfall existed in a business unit, then this shortfall was immediately recorded in the profit and loss account. Under the new policy, if it is determined using a best estimate (50%) confidence level that a shortfall exists in a business unit, and there are no offsetting amounts within other business units in the Business Line, then this shortfall is immediately recorded in the profit and loss account. This change in accounting policy has no effect on the financial information presented in these condensed consolidated interim accounts.

IFRS 7 “Financial Instruments: Disclosure” became effective as of January 1, 2007. Also in the first quarter of the year, IFRIC 11 Group and treasury share transactions became effective. None of these recent standards and interpretations have had a material effect on equity or profit for the period. No other new standards became effective in the first six months of 2007 and recently issued standards that become effective after June 30, 2007 are not expected to have a material effect on equity or profit for the period. ING Group has not early adopted any new International Financial Reporting Standards in this quarter.

International Financial Reporting Standards as adopted by the EU provide several options in accounting principles. ING Group’s accounting principles under International Financial Reporting Standards as adopted by the EU and its decision on the options available are set out in the section “Principles of valuation and determination of results” in the 2006 Consolidated Annual Accounts of ING Group.

These condensed consolidated interim accounts should be read in conjunction with the 2006 Consolidated Annual Accounts of ING Group.

Certain amounts recorded in the condensed consolidated interim accounts reflect estimates and assumptions made by management. Actual results may differ from the estimates made. Interim results are not necessarily indicative of full-year results.

The presentation of, and certain terms used in, these condensed consolidated interim accounts have been changed from the 2006 Consolidated annual accounts of ING Group to provide more relevant information. Certain comparative amounts have been reclassified to conform with the current period presentation. None of the changes are significant in nature.

2.5.2 Loans and advances to customers by insurance and banking operations

		June 30,				December 31,
(in EUR million)		2007*				2006
Insurance operations			31,292				37,606
Banking operations			489,989				440,375
			521,281				477,981
Eliminations			4,421				3,544
Total			516,860				474,437

2.5.3 (a) Loans and advances to customers by type — banking operations

		June 30,				December 31,
(in EUR million)		2007*				2006
Loans to or guaranteed by public authorities			26,853				25,953
Loans secured by mortgages			238,502				208,211
Loans guaranteed by credit institutions			2,737				2,408
Other personal lending			23,762				22,906
Other corporate loans			200,609				183,535
			492,463				443,013
Provision for loan losses			(2,474	)			(2,638	)
Total			489,989				440,375

2.5.3 (b) Movements in Provision for loan losses — banking operations

		June 30,				December 31,
(in EUR million)		2007*				2006
Opening balance as at January 1			2,642				3,313
Changes in the composition of the group			2				(101	)
Write-offs			(225	)			(691	)
Recoveries			30				86
(Decrease)/increase in loan loss provision			25				103
Exchange differences			(1	)			(67	)
Other movements			14				(1	)
Closing balance			2,487				2,642
The closing balance is included in:
- amounts due to banks			13				4
- loans and advances to customers			2,474				2,638
			2,487				2,642

2.5.4 Investment income*

		Insurance								Banking
		operations								operations								Total
3 months ended		June 30,								June 30,								June 30,
(in EUR million)		2007				2006				2007				2006				2007				2006
Income from real estate investments			17				47				57				34				74				81
Dividend income			318				251				14				66				332				317
Income from investments in debt securities			1,683				1,728												1,683				1,728
Income from loans			508				442												508				442
Realized gains/losses on disposal debt securities			(75	)			(93	)			59				16				(16	)			(77	)
Impairments of available-for-sale debt securities							(1	)															(1	)
Realized gains/losses on disposal of equity securities			845				255				93				32				938				287
Reversals/impairments of available-for-sale equity securities			(2	)			(7	)			(8	)			(6	)			(10	)			(13	)
Change in fair value of real estate investments			24				22				26				13				50				35
Total			3,318				2,644				241				155				3,559				2,799