CHAPTER-II

INTRODUCTION
Mutual Fund is a trust that pools the savings, which are invested by investors in capital

market instruments such as shares, debentures and other securities . It works in different

manner as compared to other savings organizations such as banks , national savings , post

office, non-banking financial companies etc. At most , if not all capital market

instruments, have risk element, it is very essential that investors have a clear

understanding of how a mutual fund operates and what are its advantages and

disadvantages as well as limitations . They should be familiar with the different types of

risks evolved along with there effects. These understandings has to be created in investors

by distributors engaged in marketing of mutual fund products. The distributors should be

knowledgeable enough to answer fundamental and basic questions that will be raised by

investors . it is thus essential that those engaged in the marketing of mutual funds such as

agents , distributors companies, bank executives and other should have a comprehensive ,

clear and correct understanding of concept and working of mutual funds as well as

essential operational and technical details.

A bank is a financial institution licensed by a government. Its primary activities

include borrowing and lending money. Many other financial activities were allowed over

time. The major functions of banks regarding deposits. Advances, remittances, cheque

collections etc. are described briefly in the report. But how banks are involved in the

distribution of financial products with special reference to mutual funds is

described.Banks are the backbone of todays business. They provide total financial

solution to clients under one roof. They are coming aggressively into mutual funds
distribution.

A mutual funds is distributed through various distribution channels and banks are

involved as national distributors of mutual funds. The report tells how mutual funds are

distributed through banks and the role of banks in their distribution. In banks there are

specialized persons like relationship mangers (RMs) for this purpose. They provide

personalized services to high networth income (HNI) , generate upfront fee income of

banks through distribution of mutual funds.

Till now there was load fees charged by advisors in return of their advice to

investors but after 1st August SEBI announced for no entry load on mutual funds for the

benefits of investors. But the advisors are dissatisfied from the new regulation made by

SEBI. So, in order to conter these new rules made by banks are adopting new strategies

which are described in the report .

After introducing new strategies banks are finding problem to know whether the

investors are aware or not about their new adopted strategies. This is the problem

mentioned in the present report . So, thee was a survey conducted to know about

investors view regarding facilities in banks, their views about new regulations of SEBI.

The statistical data of the report tells about the views of clients & investors

regarding the problem. At last the findings are presented in a concise form that presently

most of the investors are unaware about the new strategies i.e. changing role in mutual

funds distributions. There are certain recommendations for banks presented in last

chapter, that may help in managerial purpose.

 COMPANYS PROFILE

In India, ING is present in all three fields of banking, insurance and asset management

in the form of ING, ING Vysya Life Insurance and ING Investment Management

respectively. The presence in all three fields signifies the importance that the group

attaches to the Indian markets and the group's Operations here, as well as its bullish

future outlook on the country.

ING and ING Vysya Life Insurance are headquartered at Bangalore, while the

corporate office of ING Investment Management is situated at Mumbai. The synergies

arising out of the three distinct but complimentary businesses are bound to be an asset to

the group in the changing market dynamics of the future. The first such signs are already

visible on the horizon with combined products being successfully launched by the

different entities of the group in conjunction with each other

THE ORIGIN OF ING GROUP

Originated in 1990 from the merger between National Nederland NV the largest Dutch

insurance Company and NMB Post Bank Groep NV. Combining roots and ambitions, the

newly formed company Called International Nederland Group. Market circles soon

abbreviated the name to I-N-G. The company followed suit by changing the statutory

name ING Group N.V..

THE NEW ENTITY:

The immediate benefit to the bank, ING Vysya Bank, has been the pride of

having become a Member of the global financial giant ING. As at the end of

the year December 2008, ING's total assets exceeded 1332 billion euros,
employed over 125000 people, served over 85 million Customers, across 50

countries. This global identity coupled with the back up of a financial power

house and the status of being the first Indian International Bank,would also

help to enhance productivity, profitability, to result in improved performance

of the bank, for the benefit of all the shareholders.

ING Vysya Bank Ltd., is an entity formed with the coming together of
erstwhile, Vysya Bank Ltd, a premiere in the Indian Private Sector and a global
financial powerhouse, ING of Dutch origin,during Oct 2002. The origin of the
erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of
visionaries came together to found a bank that would extend a helping hand to
those who weren't privileged enough to enjoy banking services.It's been a
long journey since then and the Bank has grown in size and stature to encompass
every area of present-day banking activity and has carved a distinct identity of
being India's Premier Private Sector Bank. In 1980, the Bank completed fifty
years of service to the nation and post 1985; the Bank made rapid strides to reach
the coveted position of being the number one private sector bank. In 1990, the
bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations,
the then Finance Minister Prof. Madhu Dandavate, had termed the performance of
the bank Stupendous. The 75th anniversary, the Platinum Jubilee of the bank
was celebrated during 2005.
The long journey of seventy-five years has had several milestones
1930 Set up in Bangalore
1948 Scheduled Bank
1985 Largest Private Sector Bank
1987 The Vysya Bank Leasing Ltd. Commenced
1988 Pioneered the concept of Co branding of Credit Cards
1990 Promoted Vysya Bank Housing Finance Ltd.
1992 Deposits cross Rs.1000 crores
1993 Number of Branches crossed 300
Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem & Jewelle
1996
PromotionCouncil for excellent performance in Export Promotion
Cash Management Services, & commissioning of VSAT. Golden Peacock Award - for t
1998 Practices by Institute of Directors. Rated as Best Domestic Bank in India by Global Fin
(International Financial Journal - June 1998)
State -of - the -art Date Centre at ITPL, Bangalore.
2000
RBI clears setting up of ING Vysya Life Insurance Company
2001 ING-Vysya commenced life insurance business.
The Bank launched a range of products & services like the Vys Vyapar Plus, the range o
2002 personal assistant service, Save & Secure, an account that provides accident hospitaliza
and insurance cover, Sambandh, the International Debit Card and the mi-b@nk net ban
2002 ING takes over the Management of the Bank from October 7th , 2002
2002 RBI clears the new name of the Bank as ING Ltd, vide their letter of 17.12.02
Introduced customer friendly products like Orange Savings, Orange Current and Protec
2003
Loans
2004 Introduced Protected Home Loans - a housing loan product
2005 Introduced Solo - My Own Account for youth and Customer Service Line Phone Ban
Bank has networked all the branches to facilitate AAA transactions i.e. Anywhere, An
2006
Anyhow Banking
 ING BRAND

The ING logo dates from 1991 when Dutch insurer, Nationale- Nederlanden, and
bank, NMB Post bank Groep merged into Internationale Nederlanden Groep.
I-N-G is an abbreviation of Internationale Nederlanden Groep, and the lion in
the logo is derived from the various logos of predecessor companies.Today, ING
has become a truly global brand. We have rebranded over fifty labels to ING and
worldwide brand awareness continues to grow. In 2004, ING first entered the
Interbrand top-100 global brands list. Since then,has it climbed to 81st position
indicating a growing brand awareness. Across the world, more and more people
see that ING is delivering on its promise: a commitment to providing the financial
services solutions our customers value.
 HOME MARKET BRANDS

Most activities are ING branded but in our home markets we have several other

strong brands:

Nationale-Nederlanden
Insurer, The Netherlands

RVS
Insurer, The Netherlands

Record bank

Retail Bank, Belgium

 THE BRAND POSITIONING

In 2007, ING Vysya Life developed its unique brand positioning Mera farz. This

positioning means, ING Vysya Life helps its customers fulfil their responsibilities

towards themselves and their families.This powerful positioning has helped ING

Vysya Life create a distinct identity for itself. The latest brand campaign with a

very catchy jingle dwells on how a little planning and a helping hand from

ING Vysya life can help lighten the burden of responsibilities that

often come with happy moments and let you enjoy your life without any worries.

PROFILE

ING is a global financial institution of Dutch origin offering banking,

investments, life insurance and retirement services. We serve more than 85

million private, corporate and institutional customers in Europe, North and Latin

America, Asia and Australia. We draw on our experience and expertise, our

commitment to excellent service and our global scale to meet the needs of a

broad customer base,comprising individuals, families, small businesses,

large corporations, institutions and governments.

VISION
 MISSION
ING`s mission is to be a leading, global, client-focused, innovative and low-cost

provider of financial services through the distribution channels of the clients

preference in markets where ING can create value.

COMPANYS STRATEGY
INGs overall mission is to help customers manage their financial future.

Capitalising on changing customer preferences and building on our solid business

capabilities, INGs strategic focus is on banking, investments, life insurance and

retirement services. We want to provide retail customers with the products they

need during their lives to grow savings, manage investments and prepare for

retirement with confidence. With our wide range of products, innovative

distribution models and strong footprints in both mature and developing markets,

we have the long-run economic, technological and demographic trends on our

side. We align our business strategy around a universal customer ideal: saving and

investing for the future should be easier. while steering the business through

turbulent times, we will execute efforts across all our business lines to strengthen

customer confidence and meet their needs, preserve a strong capital position,

further mitigate risks and bring our costs in line with revenue expectations.

ING conducts business on the basis of clearly defined business principles. In

all our activities, we carefully weigh the interests of our various stakeholders: customers,

employees, communities and shareholders. ING strives to be a good corporate citizen.

COMPANYS CORPORATE RESPONSIBILITY
ING wants to pursue profit on the basis of sound business ethics and respect for its

stakeholders. Corporate responsibility is therefore a fundamental part of INGs

strategy:ethical, social and environmental factors play an integral role in our business

decisions..

Wholesale banking :
Conducts operations for corporations and other institutions. The primary focus of
INGs wholesale banking business is on the Netherlands, Belgium, Poland and
Romania,where it offers a full range of products, from cash management to
corporate finance. Elsewhere, it takes a more selective approach to clients and
products. Wholesale Banking also manages ING Real Estate, a real estate
investment manager.

Retail banking:
Offers retail banking services in the Netherlands, Belgium,Luxembourg,
Poland,Romania, Turkey, India, Thailand and China. Private Banking is offered
in the Netherlands, Belgium, Luxembourg, Switzerland and various countries in
Asia and Central Europe. Mid Corporate Clients in the home markets (the
Netherlands, Belgium,Poland and Romania), which were formerly part of
Wholesale Banking, are now also part of Retail Banking.

ING Direct:
Operates direct retail banking activities in Australia, Canada, France, Germany
and Austria, Italy, Spain, the United Kingdom and the United States. The main
products offered are savings accounts, mortgages, mutual funds and payment
accounts.
 MANAGEMENT STRUCTURE

Executive Board, Management Boards Banking and Insurance

ING has a two-tier board structure consisting of the Executive Board and the

Supervisory Board. In ING's view, a two- tier board is the best way to create the

proper checks and balances in the company. The Executive Board is responsible

for day- to-day management of the business and long- term strategy. The

Supervisory Board is responsible for controlling management performance and

advising the Executive Board. The Supervisory Board is made up exclusively of

outside directors.

Executive Board Terms of employment

The Dutch Corporate Governance Code requires that the main elements of the contract of

an Executive Board member shall be made public immediately after it is concluded.

Executive Board compensation consists of three basic components:

Fixed or base salary, which represents the total guaranteed annual income.
Short-term incentive in cash, which compensates for past performance measured
over one year.
Long-term incentive in stock options and/or performance shares, which
compensates for performance measured over multiple years and is forward-
looking.
Ownership ING shares by Executive Board members

Members of the Executive Board are permitted to hold ING shares and depositary
receipts for shares for long-term investment purposes. Transactions in these
shares are subject to INGs regulations for insiders. Movements in the holding of
ING shares may take place for various reasons, including as a result of dividend
payout or as part of the remuneration.

ING EMPLOYEES
We consider certain human rights fundamental and universal for our employees.

These rights include freedom of association, the right to collective bargaining and

freedom from discrimination based on race, colour, sex, religion, political

opinion, national or social origin.

Our Human Rights Statement is based on international laws and practices, such

as:

the Universal Declaration of Human Rights (1948, United Nations)

the core conventions of the International Labour Organisation and
the UN Global Compact Principles
SUPPLIERS:
ING deals with its business partners according to a set of high ethical standards and has
strict procurement policies on child labour, environmental issues, health and safety

regulations and supplier diversity.

PROCUREMENT:

Procurement staff has to comply with the ING Procurement Code of Conduct as well as
the Business Principles that all staff follow. This code prohibits the acceptance of
personal gifts or benefits in any form, requires confidentiality with respect to quotations
and proposals from suppliers and sets strict boundaries for contacts and relations with
suppliers. Procurement staff must sign the code every year to remind them of its
importance.
Furthermore, the code is an integral part of INGs General Terms & Conditions for
Procurement with which business partners are required to comply. The current version,
released in 2004, includes ethical clauses related to the environment, health and safety
and child labour and applies to all new contracts and contract renewals, while existing
contracts will be modified as soon as the first legal opportunity occurs.

RECIPROCITY POLICY
Many of INGs suppliers are also clients of ING. Our reciprocity policy states that when

a customer or potential customer wants to become a supplier, this company will be

assessed only on the basis of price and quality and not on its customer status.
CORPORATE GOVERNACE AT ING
ING believes good corporate governance entails a careful balance between the

short-term and long-term interests of the company. INGs aim is to have a

governance structure that is transparent and does justice to the interests of all its

stakeholders: customers, shareholders, employees and society as a whole.

FINANCIAL EDUCATION:
Today many people lack a basic understanding of financial products and services.

At the same time, responsibility for financial decisions is now widely in the hands

of individuals and the range of products has become wider. We believe that

financial education is a key element in empowering customers with the

confidence and capacity to take more informed financial decisions. Helping

individuals understand their finances and giving them a sense of control are

essential first steps towards managing their financial future.

 COMPANYS PHILOSOPHY

Adjusting to a new reality:

Financial institutions like ING have an important role to play in creating the conditions

for social and economic progress, by taking and spreading the financial risks of

individuals and companies. Yet, the credit crisis underscores that we can only do this if

we are trusted by our customers.Earning and maintaining customer trust is therefore an

absolute prerequisite for any financial institution to operate. As the increased complexity

of the financial services industry has been a major cause of the crisis, going back to the

basics of finance is inevitable.ING has a clear eye for what lies at the heart of our

business: collecting customer balance and redeploying these in the economy, by means of

a self-originated loan book consisting of mortgages and corporate, private and other types

of loans.

.Going forward we will take steps to strengthen our financial position and adjust to the

reality of the global recession while keeping focus on our long-term priorities. In the

short to medium term, we will step up efforts to steer the business through these turbulent

times, to stabilise our company and reinforce our credibility.Our efforts will be focused

on disciplined execution of these plans in 2009, specifically by:

putting customers first;

preserving a strong capital position, including divestments that free up
capital;
further mitigating risks; and

bringing our costs in line with the operating environment.

Putting customers first:
The credit crisis has had a clear impact on customer needs, both in terms of product

offering, as well as servicing models. These turbulent times prove once more that

delivering an easier customer experience and going back to basics should be an essential

part of our strategy. Hence, we will continue along the path chosen in 2007, when we

launched our Easier programme, which emphasises the attributes that build customer trust

and competitive advantage over the long term:customers expect us to be available when

they need us, to provide them with a clear overview of their financial situation, to

respond to their queries in a fast and efficient manner, to be open and transparent about

our products and services and to provide them with objective and professional advice.

Apart from the need to reinforce our efforts to deliver an easier customer experience, the

crisis has created a shift in customer demand towards products that offer wealth-

protection and risk reduction.

Preserving a strong capital position:

Position that is sustainable for the long term. We aim to avoid asset growth in pressurised

sectors and continue our efforts to deleverage our balance sheet and to reduce the

volatility and complexity of our portfolio. We will make a number of selective

divestments outside the core of our franchise to free up capital and simplify the

organisation. We will do so in a disciplined manner. In February 2009, we sold our

interest in ING Canada, the largest provider of property & casualty insurance products

and services in Canada

Mitigating risk:
ING has been reducing risk across the balance sheet over the course of 2008. We aim to

further reduce our risk exposure in the coming period. In 2008, we have started to reduce

our real estate,private equity, corporate bond and interest rate exposure. We sold several

equity stakes and implemented hedges. Moreover, we have begun to cap balance sheet

growth for the bank and reduced market risk for insurance operations.ING aims to close

this transaction in the first quarter of 2009, but the closing is dependant on the

completion of final documentation and approval of various regulators.

Bringing costs in line with the operating environment

With pressure on margins and investment returns, it is vital to contain costs. In 2009 we

announced to cut operating expenses by EUR 1 billion in 2009. The structural expense

reduction is expected to lead to annual savings of approximately EUR 1.1 billion from

2010 onwards. Of the cutback, 35% will come from a reduction of the workforce by

approximately 7,000 full-time positions in 2009. The remainder of the expense reduction

comes from decreasing costs for our head office, marketing, the Formula 1 programme,

consultancy, third-party staff and the renegotiating of certain contracts with IT-vendors.

By taking these measures we are bringing expenses in line with the operating

environment.

Long-term priorities:
We are convinced that it is in the long-term interest of all our stakeholders

(customers,employees, communities, and shareholders) to do whatever is

necessary to maximise business opportunities whilst maintaining the financial

health and growth prospects of our company. Our focus on banking, investments,
life insurance, and retirement services, enables us to provide retail customers with

the products they need during their lives to grow savings, manage investments

and prepare for retirement with confidence. With our wide range of products,

innovative distribution models and strong footprints in both mature and

developing markets, we have the economic, technological and demographic

trends on our side.

We will continue to invest in our bank distribution platforms. We are able to serve

our 85 million customers through different distribution channels our direct

banking channels and branches and also through tied agents, and via distribution

agreements with other parties. Banks can fill many customer needs across a wide

range of products from liquidity to lending and investing. Banking is also

structurally well-positioned with many chances for customer interaction and long

customer retention. But even with the right mindset and structure in place,

shielding customers from market risks while managing earnings volatility remains

a challenge, especially in the uncertain market environment of today. Therefore,

we also want to make sure that we continue to be able to generate a good portion

of our own assets as well. Our wholesale banking activities will thus continue to

play a fundamentally important role, as our expertise in this field helps us

generate the high-quality assets in which we can invest our retail deposits. Our

wholesale banking business also provides us with relevant skills in risk

management, and gives us access to financial markets around the world. Lastly,

our asset management will also remain key to our strategy. In order to optimise

our asset management

 skills we will further strengthen our capabilities and investment

expertise to deliver first-class investment performance for our clients.

High-growth markets continue to play an important role for ING. Yet, given the

new economic and regulatory realities and the necessity to preserve ING's capital

position, new investments will be tempered .Moreover, further strengthening of

our brand around a universal ideal of delivering an easier customer experience

remains a main objective, as awareness and appreciation of the ING brand is

essential in building trust, a key driver for long-term business growth.Last, but

certainly not least, continued investment in our people is essential. ING is proud

to have highly skilled and motivated staff. Hence, we will continue to promote

people-oriented leadership, and to drive for excellence.

Update on strategy: Taking ING back to basics

9 April 2009

Announced measures to reduce cost, risk and leverage are on track

Reducing complexity by operating Bank and Insurer separately under one

Group umbrella

Creating a predominantly European bank with one integrated

balance sheet

Further narrowing focus of Insurance to Life and Retirement services

Fundamental shift in risk profile of US Insurance business
 Forming one Global Investment Manager including Real Estate
Investment Management
Over time divest EUR 6 to 8 billion in non-core activities as market conditions

permit

Reducing complexity:

To reduce complexity, ING will operate the Bank and Insurer separately under one Group

umbrella. INGs banking activities will be based on its proven strengths: gathering

savings, distribution leadership ,simple propositions and strong marketing. The bank will

be predominantly focused on Europe with selective growth options elsewhere. It will

have one integrated balance sheet and one management team.Key building blocks include

the current Retail activities in the Benelux where ING is a leading internet- first bank

focused on further capturing scale and efficiency gains. Retail Banking in Central Europe

will aim to further strengthen activities in Poland, Romania and Turkey. The greenfield

retail operation in the Ukraine will be unwound. ING Direct will continue to build

on its strong position as the leading direct bank. The Commercial Bank will accelerate its

current transformation process, focusing mainly on the Benelux and Central Europe while

maintaining positions in European payment and cash management, specialised finance

and financial markets.

The Insurance business will focus on its long-term structural leadership positions in life

and retirement services. The business will be managed regionally with an aggregated

balance sheet. Key building blocks will include the operations in the Benelux, US,

Central Europe, Latin America and Asia/Pacific.In the US a fundamental shift in the risk

profile will be achieved by focusing on individual life and retirement services and a

transition of the variable and fixed annuities business to low-risk roll over products. For
the non-core businesses, including Employee Benefits, Group Reinsurance and the

existing Annuity books, strategic options will be reviewed. The US Financial Products

division will be reduced as markets in Central Europe, Latin America and key markets in

Asia/Pacific. The life insurance activities in China and Japan are under review.

ING Business Principles

As a global financial services provider, INGs mission is to set the standard in helping
Our customers manage their financial future. High ethical standards are part of that

mission and the ING Business Principles guide us in making the right business decisions.

Our business, our principles

We are committed to our integrity

We aim for an above average return
We promote sustainable development and respect human rights
We respect each other
We are involved in the communities we operate in

Accessibility and transparency:

Access to basic financial services is essential for citizens to be economically as well

as socially integrated into society. We also believe that tailoring our products and
services to specific customer needs will help us improve our service level and at the
same time increase our overall accessibility .
An important factor in increasing the access level of financial services is through
providing microfinance for small businesses and individuals in developing countries.

Transparency:
 Simple and clear customer communication is another key element in increasing

access to financial products and services. Within the bounds of commercial

confidentiality, we attach great importance to open and straight forward communications

with all our stakeholders. For our customers we endeavour to provide clarity in prices and

conditions of our products and services.

In addition to clear information, we strive to provide our customers with guidance in

making financial decisions. Many of our businesses have developed practical tools to

simplify decision-making.

COMPANYS FINANCIAL ANALYSIS

 PERFORMANCE SHEET OF ING SINCE 1940 TILL NOW

Rs. in millions:
 Year Networth Deposits Advances Profits Outlets
1940 0.001 0.400 0.400 0.001 4
1950 1.40 5.30 3.80 0.09 16
1960 1.60 20.10 13.50 0.13 19
1970 3.00 91.50 62.80 0.74 39
1980 11.50 1414.30 813.70 1.13 228
1990 162.10 8509.40 4584.80 50.35 319
2000 5900.00 74240.00 39380.00 443.10 481
2001 6527.00 81411.10 43163.10 371.90 484
2002 6863.24 80680.00 44180.00 687.50 483
2003 7067.90 91870.00 56120.00 863.50 456
*
2004 7473.20 104780.00 69367.30 590.01 523
Out lets
2005 7094.00 125693.10 90805.90 (381.80) 536
2006 10196.70 133352.50 102315.20 90.6 562
2007 11101.90 154185.70 119761.70 889.0 626
2008 14260.00 204980.00 146500.00 1569.00 677
2009 15940.00 248900.00 167510.00 1888.00 857*
comprises of 441 branches, 37 ECs, 28 Satellite Offices and

ATMs as of March 31st 2009. Additionally bank also has Internet

Banking, mi-b@nk and Customer Service Line for Phone Banking

Service.
Key figures

FY 2008 FY2007 FY2006 FY2005 FY2004

Income (in EUR milion)

Insurance operations 54,851 62,208 59,642 57,403 55,614

Banking operations 11,731 14,602 14,195 13,848 12,678
Total Income1 66,291 76,587 73,621 71,120 68,171
Operating Expenses

Insurance operations 5,422 5,515 5,275 5,195 4,746

Banking operations 10,303 9,967 9,087 8,844 8,795
Total operating expenses 15,725 15,481 14,362 14,039 13,541
Addition to loan loss 1,280 125 103 88 465
provision Banking
operations
Insurance result before -1,635 6,533 4,935 3,978 4,322
tax
Banking result before tax 148 4,510 5,005 4,916 3,418
Total result before tax -1,487 11,043 9,940 8,894 7,740
Taxation -721 1,534 1,907 1,379 1,709
Minority interests -38 267 341 305 276
Net result -729 9,241 7,692 7,210 5,755

Figures per ordinary

share (EUR)
Net result -0.36 4.32 3.57 3.32 2.71
Earnings 2) -0.56 4.32 3.57 3.32 2.71
Dividend 0.74 1.48 1.32 1.18 1.07
Shareholders equity 8.55 17.73 17.78 16.96 12.95
Balance Sheet (in EUR
billion)
Total assets 1,332 1.312 1,226 1,159 964
Total equity 29 40 41 38 28
Shareholders equity 17 37 38 37 28

Capital Ratios (%)

ING Group debt/equity 13.8% 9.5% 9.0% 9.4% 10.2%

ratio
Insurance capital 256% 244% 274% 255% 204%
coverage ratio
Insurance debt/equity 8.5% 13.6% 14.2% 13.4% 14.3%
ratio
Bank Tier-1 ratio 9.32% 7.39% 7.63% 7.32% 6.92%
Market capitalisation (in 15 60 74 65 49
EUR billion)

Shares (in millions):

Outstanding 2,063 2,226 2,205 2,205 2,205

Preference shares - 16 63 87 87
outstanding

Key Performance
Indicators
- Net return on equity -2.1% 24.2% 23.5% 26.6% 25.4%
(ROE)
- Net result growth -108% 20% 7% 25% n.a.
Insurance

- Value of new life 1,023 1,113 807 805 632

business
- Internal rate of return 13.9% 14.3% 13.3% 13.2% 12.1%
- Combined ratio (non- 97% 97% 91% 95% 94%
life)
Banking

- Cost/income ratio 87.8% 68.3% 64.0% 63.9% 69.4%

- RAROC after tax 1.2% 19.9% 19.7% 22.6% 14.5%

Assets under management 551 643 600 547 492

(in EUR billion)

Staff (FTEs end of period) 124,661 124,634 119,801 116,614 112,195

1. including inter-company eliminations

2. including impact coupon to Dutch State (EUR 425 million with regard to

EUR 10 billion)
Ratings

S&P Moodys Fitch

ING Groep N.V. A+ A1 A+

(updated 31 (updated 28 Jan (updated 28 Jan
Mar 2009) 2009) 2009)

ING Bank N.V. AA- Aa3 AA-

(updated 31 (updated 28 Jan (updated 28 Jan
Mar 2009) 2009) 2009)

ING Verzekeringen N.V. A+ A2 A+

(updated 31 (updated 28 Jan (updated 28 Jan
Mar 2009) 2009) 2009)

Summary financial results First Half 2005*:

 1. Net profit rises 25% to EUR 3,492 million
EPS up 20% to EUR 1.61
2. Profit before tax excluding impact divestments
Group + 9%; Insurance + 2%; Banking + 16%
3. Strong value creation
After-tax RAROC (excl. divestments) up to 18.0% (17.5%)
Value of new Business up 33%
IRR increases to 12.6% (11.4%)
4. Interim dividend up 10.2% to EUR 0.54 per share in cash

PRODUCTS & SERVICES

 INVESTMENT PRODUCTS

1)Mutual Funds
As a distributor of Mutual Funds, we are tied up with almost all the Asset

Management Companies thereby assisting our clients to invest in mutual fund

schemes, which meet with their investment requirements.

2) Life Insurance
ING is actively engaged in selling ING Life Insurance products. ING Life

Insurance provides a range of products including endowment, pension &

unit linked plans. More details on ING Life Insurance products are

available at the link www.ingvysyalife.com.

ING Vysya Mutual Fund

ING Vysya Mutual Fund was setup on February 11, 1999 with the same

named Trustee Company. It is a joint venture of Vysya and ING. The

AMC, ING Investment Management (India) Pvt. Ltd. was incorporated on

April 6, 1998.

ING Group is known for its philosophy of 'keeping it simple' covering

some 60 million private, corporate and institutional clients in 50 countries.

It is the world's fourth largest financial services group.

ING Vysya Mutual Fund aims to provide investors with the most practical

and secure investment opportunities to invest their valuable savings. This

is combined with a range of innovative options to deliver healthy returns

combined with a high degree of security. Currently, the fund offers four

equity, five debt and two hybrid schemes to its investors.

INVESTMENT ADVICE
We use two core methods to manage your finances and
investments: Discretionary Management and Advisory
Mandates.

Both options offer regular reports on the value of your investments, and all

the expertise of ING's global economic and market research.Your unique

personal and professional situation is your private banker's main

consideration. Together, you'll decide what is best for you. Clients who

choose Discretionary Management have a long term point-of-view, and

prefer our experts to manage their investment portfolios.

When you choose this option, you first decide with your private banker

what sort of investment portfolio you are comfortable with. ING Private

Banking has a well-developed range of choices thanks to our long

experience in investment management and our professional approach to

portfolio construction.

As soon as the details are finalised, ING Private Banking's investment

professionals start managing your account for you. Your private banker

will meet with the investment teams each month, and you'll have regular

updates on the evolution of your portfolio.

Clients who select an Advisory Mandate like making their own confident

investment decisions based on their private banker's expert advice and

experience.First you create or modify your investment strategy, together

with your private banker. Then our investment specialists go to work.

You'll have teams of professionals all over the world studying the markets

for you, monitoring your portfolio, and letting you know when we think

you should buy, sell or, hold.Your private banker will contact you with

our recommendation by phone or email - or would you prefer an SMS?

We're as flexible as you need us to be.With an advisory mandate, you

make the final decision whether or not to buy and sell, meaning you

effectively have all the power of a global financial institution, and all the

control of a free individual.

WEALTH MANAGEMENT SEVICES

In todays economy, the questions about your financial future are

becoming more complex.
How often do you ask yourself ?

What can I do today to plan for a comfortable retirement?

How will we finance our childs college expenses?

How will we finance our childs marriage?

Do I have enough insurance to protect my family?

The answers to these questions are easy. Through ING Wealth

Management Services we offer an extensive range of Wealth Management
solutions designed specifically to meet your financial needs and
aspirations, letting you jiyo easy!

At ING Vysya Bank, we understand your needs and seek to find solutions
for them. The approach to designing your Wealth Management solution is
based on understanding your need horizon and risk preferences which we
integrate with the right product.

SWOT ANALYSIS OF THE COMPANY

STRENGTH:

Strong and well established position in insurance markets: through the

acquisitions of Reliastar and Aetna Financial Services in 2000, ING

became one of the top 10 life insurers in the United States. ING is

currently also number one in life insurance in the Netherlands and number

two in property and casualty insurance and its brand is well known across

Europe.

Wide diversification of locations, products and distribution channels: the

operations of ING are strongly diversified in terms of activities (life, non-

life insurance, investment and retail banking), geographic exposure

(developed countries as well as high-growth emerging markets),

distribution channels and segments targeted. The fact that the company is

so diversified in terms of its product offering means that it faces lower

risks than others.

Strong distribution channels: distribution is one of the strongest features of

ING. It operates a 'clickcallface' type of distribution; meaning a flexible

mix of Internet, call centres, intermediaries and branches. This enables

ING to deliver and reach their customers quickly and effectively.

WEAKNESSESS:

Low profitability in some markets: the company's worst performing

market is the United States, which ING entered in the second half of the

1990s via three large acquisitions. The problems that ING faces in the

United States, since the completion of the acquisitions of Aetna and

ReliaStar, have been getting worse since the September 11 events. The

main reason behind low profitability of ING in the U.S. markets is the

weak performance of equity markets, which had an impact on most of the

global insurers. Other reasons include the low interest rates, which again

are causing problems for many insurers operating in the United States.

High leverage: this is one of the main weaknesses ING is facing at the

moment. According to the industry, the double usage of capital on banking

and on insurance should not be above 25%, while the level that ING faces

at the moment is 30%. Compared with other companies, for example,

Fortis, ING is potentially under more strain in case the economic

circumstances change negatively.

Worsening position in home market, Belgium: ING's market position in

Belgium has deteriorated and ING, once the largest in the Belgian market,

now had to give up to BBLs leadership in the Belgian market.

OPPORTUNITIES:

Growth of ING Direct: the export of the company's direct marketing

concept (ING Direct), which has been very successful and profitable in the

Netherlands for several years under the name Postbank, has enabled the

company to enter new markets, such as Canada, Spain, Australia, France,

United States and Italy, at a relatively low cost.Reduced exposure to

equity markets: at June 30, 2003, equity investments had returned to their

cost value, up from March 31, 2003 when unrealised capital losses

amounted to 735 million. Entering emerging markets: in India, ING last

year increased its stake to 44% in ING Vysya Bank, the number five

private bank. One of the recent examples of new market entry is the

announcement by ING Group and Beijing Capital Group that their joint

venture, ING Capital Life Insurance Company, has received approval

from the China Insurance Regulatory Committee to establish a branch

office in Beijing. China at the moment is the land of opportunities for the

troubled global insurers needing to recover their losses.

However, there are also substantial legal and political risks associated with

entry into these emerging markets. Further, there is also risk of failure to

replicate the current successful business strategy in these markets.

THREATS:

Abolition of tax relief in the Netherlands and declining earnings: the

Dutch life market was one of the most depressed in Europe in 2002 and

2003, with premium income falling by 7%, largely because of the phased

abolition of tax advantages on life insurance products.

Diminishing capital: from the beginning of 2000 to December 2003,

shareholders' funds decreased from 34.6 billion to 21.3 billion.