Good morning. This is Sarah [ph] welcoming you to ING’s Q4 2010 conference call. Before handing this conference call over to Jan Hommen, Chief Executive Officer of ING Group; Patrick Flynn, Chief Financial Officer; and Koos Timmermans, Chief Risk Officer, let me first say that any forward looking statements in today’s comments are subject to a number of current views, assumptions and variables including interest rates, foreign exchange rates, inflation rates, fluctuations in securities markets including equity markets and underlying economic conditions and changes. These are set out in greater detail in our public filing which we urge you to read. The realization of forward-looking statements can be materially altered by unexpected movement in, on any or all of these other variables. Good morning Jan, Patrick and Koos. Jan, over to you.

Thank you very much. Welcome everyone to the Q4 ING results conference call. I’m happy to report that ING is continuing to make good progress as we prepare the bank and the insurance companies for their future as standalone companies. The bank boasted another strong quarter and the insurance company is showing a solid improvement in operating profits. Although, on an underlying basis, results were impacted by the measures we announced last quarter to address the US insurance book and variable annuity block. The good news is that markets improved in Q4 and the total impact of the VA measures we announced last quarter was lower than we originally anticipated. I will talk you through the presentation now and afterwards Koos Timmermans, Patrick Flynn and also Matt Rider, our CFO of the insurance company are here with me and we are all able to answer your questions. Let me go to slide two. ING Group reported an underlying profit of EUR644 million, which was up from EUR90 million a year ago. The bank had another strong quarter with underlying profit of EUR1.5 billion before tax. Operating results in insurance increased to EUR438 million compared to EUR303 million in Q1 last year, underlying results impacted by the announcement we made already last quarter on the call that has an impact of EUR975 million before tax. Operational separation of the bank and the insurer was complete and the two companies are now operating individually as of January 1st 2011. The separation now enters phase number two. As we are now working through legal and operational separation within the insurance organization. The focus for 2011 will be to prepare the insurance company for two IPOs and then all at the same time that we want to work towards the repurchase of the remaining…

(Operator Instructions) Our first question comes from Spencer Hogan. Please go ahead with your question. Spencer Horgan – Deutsche Bank Securities: Yeah, good morning everyone. Two balance sheet questions please. The first one is if we look at the core tier-one ratio in the bank, obviously that’s improved quite nicely to 9.6 in the quarter. But have you sort of updated your views to what the right number for that is prospectively in terms of the target capital strength of the bank? And maybe you could just update us as to what the pro forma Basel III number might be on spot implementation. And then the second one is, in terms of the debt for equity swap in insurance, I mean obviously I understand that’s effectively just shuffling debt around the group but could you just sort of expand a bit on why you’ve done that? Thank you very much.

Okay, prospectively. Yeah I think if you look at the pro forma Basel III results, I mean that is something we will give later. Again, we will update at the end of the first quarter. It will be a little bit lower as it was as we indicated 70 basis points before but that all has to do with the reevaluation reserve. That is the biggest driving factor behind there because please note that reevaluation reserve, if negative, would be a deductible from your core tier one in the future. Somewhere that Basel, over time, I think will disappear if we move more to IFRS 9. But overall I would say it’s a slightly lower number than the 70 base point where you've seen before. And if you look at the core tier one ration then what we have given is, you know, internally we work at the moment we say like we want to be in line with (inaudible) and we feel comfortable if that number is above the 8% at the moment so that it is clearly what we are working on but we have not made that number definite and that will become more definite once the Basel III numbers are more clarified. Spencer Horgan – Deutsche Bank Securities: Okay, but it is fair to say, broadly, the Bank is somewhat better capitalized than it needs to be at the moment?

I think we do feel comfortable with the capital position.

Debt equity swap, Matt.

Yeah, maybe I’ll take the debt equity swap. I think a couple reasons for this. First of all it basically mitigates the impact of the DAC write off that we saw in Q4 together with the impact of moving to market value that we’ll see in Q1, that EUR700 million number. The other thing is that it basically reduces financial leverage in the insurance companies which is very important rating agencies and it reduces the fixed charge coverage ratio which is also important. And it also basically reduces the entanglements that we’re going to, that we have with the overall group. Spencer Horgan – Deutsche Bank Securities: Okay thanks.

Thank you. Our next question comes from Farooq Hanif. Please go ahead with your question. Farooq Hanif – Morgan Stanley: Good morning everybody. Two areas I’d like to explore. Firstly, I just want to understand your point about the run-rate in insurance earnings. You seem to be positive about that, given the cleanup. So, firstly, with the write-off of DAC NVAs, and with this reduced K-factor, can you explain the expense line going forward? And also the Investment margin has gone up. You’ve got a target of increasing it further. Can you explain how quickly you get there given the current yield curve? And the second question area is just on the risk-weighted assets. You had a pretty big reduction, which has been good for your core Tier 1 capital ratio generation. I was just wondering what further you have to do, because you seem to be talking about repaying the Dutch State this year. I was wondering what your plans were for the risk-weighted assets. Thanks.

Yeah, so maybe I’ll take the first one. On the insurance run-rate I think you’ve seen some very good improvement over the course of the year. if you recall from the investor day last April, on the investment margin in particular, I think at that point we were sitting at something like 83 basis points and now we’re up to 93 with a target of 105. So I think we’re making probably a little bit faster progress than we had anticipated on that line so that’s a good thing. With respect to the DAC write offs, obviously there’s going to be less DAC to amortize going forward. I think we’ll be able to give a little more description when we rework the financials to take into account all these changes. But I think you’ll see some modest positive operating results coming through the VA business. I think we leave it there.

Yeah, on the RWA Farooq, yes you’ve seen some declines. What you can see is that in effect we have now almost 90% covered with the Basel II internal model so that means that has an implication for the RWAs. Can we go much further there in declining it, I don’t think so. What you will see over the next year is the Basel II ½ implementation which will, so you expect a little bit of upwards effects rather than downwards effects on this. I mean we’re not talking about large numbers but in the end I don’t expect a lot of further decreases coming through this year and in fact you will see a slight upward effect. Farooq Hanif – Morgan Stanley: Just on that point, the other driver is obviously growth in your balances. You seem to be saying that there are areas where there’s some pretty good demand, particularly in the commercial Bank. Do you think underlying balances are going to grow by the 4% to 5% long-term rate?

If you look at the total amount, what you’ve seen is an indecent amount of increases in our mortgages, commercial banking relatively more than some segments like the structured finance have increased a lot and overall we expect that volume growth around 5% which is a bit in line with our long term guidance. Farooq Hanif – Morgan Stanley: Okay, thanks very much.

Thank you. Our next question comes from Andrew Coombs. Please proceed with your question. Andrew Coombs – Citigroup: Good morning. I have three questions please. Firstly, can you just elaborate on your aim to repay the majority of the remaining State capital aid this year? So what you’re thinking in terms of timeframe there; how will you go about it i.e., in one go, or multiple repayments. And also, your thoughts on the repayment premium of 50% and any ability to negotiate there. My second question is just on the net interest margin. It obviously has increased again to 147 basis points. Just your thoughts in terms of how sustainable you believe that could be, or whether it could revert back to 140 basis points, or even below during 2011. And finally with regards to costs. Can you just please give us some idea of how much of the cost increase in the Netherlands, and also in ING Direct, refers to seasonal marketing campaigns, and probably won’t recur in the first quarter of 2011? Thank you.

Okay, let me take the first one related to the repayment of the Dutch State. We had made a deal originally with the Dutch State that we could repay at a discount and once we had done that, we heard from the European commission or the state also heard from the European commission that they would not agree with that and that it would mean that we had additional restructuring requirements because it would count as state support again. That has given us some idea on what to do next with the repayment of the Dutch State. We are at this moment, if you repay at this moment, then I think the only thing we can do is repay with the 50% premium. On the other hand we still have a court case that is still open. We have not heard anything yet what it could do. A lot of the issues in the court case is specifically this topic and yeah, we need to wait what the answer will be before we can see whether we will either win or not win this case. I have no indications at this moment when the resolution of this case will be. They still need to have hearings; oral hearings which we thought were scheduled for sometime this year. This anticipation was that we would get an answer this year. But in the meantime we still would like to pay back the Dutch government and we are in discussions with them how can we do this and what amount can we afford to pay. Also looking at the requirements that we have of the Basel III upcoming requirements. So at the same time we'd like to do it in a smart way.

Perhaps I’ll give you a few minutes just to run through the drivers and interest margin so you can get a sense of where it might go to going forward. As Jan said it’s been robust at about 140 basis points throughout the year and the drivers behind that, the positive drivers have been we’ve seen some good mortgage growth in the Netherlands, approximately EUR1.5 billion of production in Q4. We’ve also seen an improvement to the margin as a number of our customers have retained mortgages and the duration has lengthened which has enabled us to fund at extended duration, lower rates which has been a positive. ING direct as well, we’ve seen good volume growth throughout. The margins there are stable. There was a one-time increase of approximately EUR21 million from the technical accounting change but eliminating that it’s pretty stable. A strong part in supporting margin is our structured finance business but we’ve seen good margins and good production both in trade and export finance. Financial markets, I think, as we mentioned before, it’s up in Q4 two basis points but it’s inherently a volatile number. And in fact the aggregate for financial markets both net interest income and other income was down, which you normally see as a seasonal effect. So I wouldn’t rely on the financial markets as an indicator of the future’s inherently volatile. SME’s volume of the unsaid is low, demand is low in this area and there’s some pressure on margins as a consequence. If you talk about the investment book, EUR144 billion, average duration is short and there could be some pressure in margins in this low interest rate as these are replaced. On the other hand, on the liability side, it’s been positive. In the Netherlands we reduced rates in September which it benefited the interest margin. However, we’re seeing some of our peers pushing rates up so there’s some emerging pressure there. Also in ING direct in Spain and in France there is stronger pressure around interest rates applied by competitors. That said, if you look in the round at those pressure points, we have still managed to increase the interest margin to 147 and that’s primarily driven by the two strong points which stand out which are mortgages and our structured finance business. Therefore the average we’ve seen for the full year of 140 is a solid number and we think we can continue at about this level in the coming quarters. In terms of the cost increase, the seasonal impact, we did invest in marketing just under EUR40 million in Q4, you can call it a discretionary increase. We also are investing in the business. We’ve invested in a variety of IT related investments to include the internet platform, call centers and ATMs which again are broadly about the same level of EUR40 million.

I think you will see us being very vigilant on costs in 2011. We have already taken a few steps but not all the IT activities can be done in one year. Despite the improvement that that could create so we’ll be very vigilant in making sure that our course stay in line and that we continue to work towards our objectives which are 50% gross income ratio for the bank long term and 35% for the insurance company. Andrew Coombs – Citigroup: Thank you very much.

Thank you. Our next question comes from Johnny Vo. Please go ahead with your question. Johnny Vo – Goldman Sachs & Co: Good morning. Just again on the cost side as well you’re targeting this cost income of 50%. Clearly, you’re saying that the net interest margin is probably higher than is sustainable at the moment. Just in terms of the costs then, are we going to see a step change in the costs? Obviously, the Belgian increase in costs there in terms of the deposit scheme is going to cost you more. So how are you going to get possibly to the 50% cost income ratio? That’s question number one. Number two is just on the risk costs of 51 bps. You’re saying that going forward, it’s going to be lower than that. Is that a function of the risk-weighted assets moving up, or actually the absolute level of risk costs going down? Thanks.

Yeah, I mean on costs if you look at there was an increase in Q4 but if you look at the cost income ratio for the full year excluding market effect it’s 54%. So, you know, it’s flat and the target is 2013. So we are maintaining our drive to get that 54% down to 50% in that time period. Johnny Vo – Goldman Sachs & Co: Okay.

And with regards to the risk cost, well mathematically you are right that you have both the effects. I think overall what we expect of it is that the risk cost level will, that the overall amount of risk cost will go down slightly. I think that if you look at the update which we had in Q4, a number of them were sort of one-off calculations of LGD adjustments and some other areas. But overall the trend is still a bit down and that is why we set our overall risk cost number in terms of monetary amounts, we expect that to be at around, or slightly below, the level of what we had last year and therefore if your RWAs will move up a little bit. I mean both effects contribute to a lower risk-cost number. Johnny Vo – Goldman Sachs & Co: Okay, great. Thank you.

Thank you. Our next question comes from Christopher Hitchings. Please go ahead with your question. Christopher Hitchings – Keefe Bruyette & Woods Limited: Good morning. So many questions, so little time. Can I focus on the interest rate hedges that you’ve got in place on the VA business and what impact they may have going forward given that interest rates are going up i.e., what did they have in the fourth quarter and what might they have – effect they have then? And I’m looking really at the sources of the- as it were, the ongoing profit in the Closed VA book. I’m also looking at these model improvements, model updates on your mortgage book. Can you give us some handle behind what is going on there? Are these ongoing, etc.? And also, should we be worried about the rise in non-performing loans in real estate, particularly given that your LLCs there seem to have gone down? Also just a technical thing; when you have sold REIM, will it be that component of profits that will disappear from your P&L account going forward or are there other impacts? Thanks.

Yeah, good morning Chris. On the interest rate hedges, just a recap of that. what we had announced last quarter was that we would move the VA or a part of the VA business, the Guaranteed Minimum Withdrawal benefits more into line with US peers and to put it more on a market value approach. So during basically the last several weeks of 2010 we put on a little bit, about EUR3.7 billion notional of interest rate hedges. Now we actually ended up doing this at a very good time because the interest rates had already increased so we actually made some small profit I think on the transactions; something like EUR20 million for Q4. So at this point for that block of business, we’ve locked out about 45% of the exposure to fluctuations and interest rates. So the idea is that as interest rates go up, if they do go up, then we will benefit for about 55% of the block. If they go down then we’re ahead about 45%. So all in all I think that worked out exceptionally well and we managed to catch the market at a very good time to put those hedges on the books. Christopher Hitchings – Keefe Bruyette & Woods Limited: Okay, thanks.

Chris, maybe on the model update, on the mortgages. What you see is past experience in recoveries in cases of defaults. You used them in updating your model so therefore you get an LGD or loss given default increase and that is the factors that could cause the risk cost in the Netherlands to go up. In fact you could argue, does it mean we have more default, the answer is no. In fact what you find is our total amount has gone down. The only thing, the effect is here, then you know, your costs are going up. So maybe a slightly confusing answer but in the end it’s more past experience driving through in multiples, nevertheless and PLs down there. If you then move to the real estate part, on the real estate side you see that we have a little bit more MPLs. I give you a bit of background on those non-performing loans and that is that all of them are related to government breeches. So we’re not talking about arrears or non-paying. I mean we have a relatively prudent approach in terms of putting loans in non-performing. And in respect to real estate and its impact in the bank, the profit that we will no longer have is approximately EUR45 million per quarter. Christopher Hitchings – Keefe Bruyette & Woods Limited: EUR45 million per quarter. Okay thank you. Thanks very much.

Thank you. Our next question comes from Francois Boissin. Please go ahead with your question. Francois Boissin – Exane BNP Paribas: Yes, good morning gentleman. Two or three questions, actually. The first one is on the total capital to be released through the sale of ING Real Estate Investment Management. You mentioned EUR500 million net capital gain. What is the amount of risk-weighted assets decrease here? And, therefore, what’s the overall amount of capital released thanks to the transaction? Second question on Westland Utrecht. I just wanted to know where you were on that, what you plan to do with it, can we expect something in 2011? And maybe just finally on ING Direct, the margin; you mentioned trends in Spain and France. What about Germany, the US and the UK, please?

Yeah, if you look at the capital relief, please note that the biggest gain comes from the fact that you sell the company at a higher than book value. That gives it a capital relief in terms of capital relief from lower assets, that is not so much the case because we are selling an investment management company and yes we have a little bit of lower achieved capital but it’s relatively small amount in terms of RWA releases.

On the Westland Utrecht we have completed the separation. That was right on time as we had agreed with the European commission. We are in a selling process now and cannot tell you much about that process. It’s not very active in making sure that we find the buyers and the interested people that could be purchasers of these assets. But nothing to report yet on where we stand on that.

On ING Direct we think margins should be roughly stable on mortgages as I referred to earlier. Francois Boissin – Exane BNP Paribas: And how about country specifics, i.e., Germany and US, and particularly where you have big exposures?

I’m sorry, could you repeat the question? I couldn’t hear you. Francois Boissin – Exane BNP Paribas: In terms of what’s happening in Germany and the US where you have big exposures, basically, do you see stable margins both on loans and deposits, or could you give maybe just a bit more color on that?

Yeah, in terms of the US, there was an uptake in Q4 in the margin the US will be as they stand up with an accounting one-off effect. So you know margins will be relatively stable from where they currently are. And broadly the same in Germany. Francois Boissin – Exane BNP Paribas: Great.

Thank you. Our next question comes from Farquhar Murray. Please go ahead with your question. Farquhar Murray – Autonomous Research: Good morning gentlemen. Two questions, if I may. Firstly, just on the interest margin, I wondered if you could give an update of the sensitivity of that to 100 basis point increase in the yield curve. I think previously, you’d guided to 7 basis points on that kind of metric. And additionally, what are your expectations for and positioning for ECB rate rises? And is any of that captured in the 140 basis points guidance you’ve given for the next coming quarters? And then secondly, just on the RWA development, I wondered if you could actually break down the EUR10 billion change q-on-q just between the model changes, underlying growth, and the exchange rate component which we know is EUR3 billion. Thanks.

Okay Farquhar, on the interest rate sensitivity, indeed we have given initially some guidance there on how interest sensitive are we and indeed you are talking about five to seven basis points of NIM margin per 100 basis point. Now if we look at a forward curve then we are expecting less than 100 basis point increase for this year. So yeah, this is all sort of part of our median term plan. And in terms of what our guidance which we are giving because in general what we are doing is we try to make sure that we invest our savings money where interest rates, our cost of money will go up but we make sure that our investments are short enough that we do get additional yield out of re-pricing as well. Farquhar Murray – Autonomous Research: Okay, so there is a little bit of ECB movement built into that 140 basis points?

Yeah. Farquhar Murray – Autonomous Research: And on the RWA?

If you look at the EUR10 billion in total what you have is volume growth that is one part EUR5 billion, foreign exchange EUR3 billion and then we have some model changes approximately a little over EUR10 billion so that’s the negative number. And then we have others and that is risk migration divestment minus six so that gives you sort of the complete mix. Farquhar Murray – Autonomous Research: Okay. And just on the model changes, how comfortable are you that those are captured within the 70 basis points transition to Basel III that you’ve got, or that you’ve just given?

If you talk about the 70 basis point Basel III so conversion from Basel II to Basel III we initially guided 70 basis points and again there the thing you have to realize as well is revaluation reserve. A negative revaluation reserve that will have an effect on that. So that makes that 70 basis point deduction a bit more than it was in the past. And again, that is a little bit the sort of the moving part and there’s a few other ones but this is the bigger moving part there which plays a role but that is not yet in the capital numbers under Basel II but under Basel III that will be the case. Farquhar Murray – Autonomous Research: Thanks very much indeed.

Thank you. Our next question comes from Thomas Nagtegaal. Please proceed with your question. Thomas Nagtegaal – RBS: Good morning gentlemen. I’ve got two questions. First of all, could you give a bit more details on your expense guidance for the bank? And when you say low single digit increase, is it over staff and other costs? Or is it over total expenses which included about EUR40 million in property development impairments in 2010? So if you take those out, the underlying guidance would be significantly higher than low single digit. And second, I’ve noticed there is a sharp up-tick in the DAC and trail commissions’ line on the insurance side. How much of that is recurring and how much of that is one-off? Thanks.

In respect to the cost increase, the low single digit is operating expenses. So it excludes, we’re not assuming there’s any marketing impacts in there. Thomas Nagtegaal – RBS: Okay. So the property development impairments are excluded from that?

Yep. Thomas Nagtegaal – RBS: Okay, clear.

Yeah, on the DAC and trail commissions, yeah this is a bit of a funny number but because the amortization patterns on DAC in particular vary between whether it’s an investment type of product versus whether it’s a traditional insurance type of product. But in broad terms what you’re seeing is that the DAC and the trail commissions are up, again, in broad terms, relative to the amount of operating income that we’re getting in. Yeah, I think we’ll be able to provide a bit more guidance on that one in future calls. Thomas Nagtegaal – RBS: Okay, thank you.

Thank you. Our next question comes from William Elderkin. Please go ahead with your question. William Elderkin – Societe Generale: Hey everybody. It’s William Elderkin from Societe Gen. I’ve got three questions, please. First of all, is the insurance company capital structure where you want it to be on a standalone basis, both in respect of the mix of debt and equity and also in terms of overall capital adequacy from a commercial perspective? Secondly, in terms of your comments on the Latin American insurance business, can I take it that you’ve had material expressions of interest from trade buyers and so on, and that could be a route that we see you going down? And then finally, in terms of the payment/repayment of the government capital, would it be fair to see that process as de-linked and separate from the sale and divestment of the Insurance operations?

Yeah, I think importantly on the insurance company capital structure, you know, as we go for two IPOs, remember the way that we portray the financial leverage is really held at a group level so we know that we will need to do some restructuring between a holding company and the United States for a US IPO and a holding company for Asia and an IPO. I think from a commercial standpoint, the most important companies where capital really matters with respect to rating agencies and so on were well capitalized and no problem on that extent. But I think there will be some certain capital restructuring in particularly this year.

What we have said in the past is that we are pursuing other strategic options. That means that in addition to looking at does it fit the IPO in the US or in Asia, that we’re also looking at other options as well. And you are correct, we have had numerous expressions of interest for this type of business. With respect to the repayment of the government, we are looking at that separate from the insurance IPO. We would like to repay this year a significant amount if we could, if we can make an agreement with the Dutch government. And then I believe that the IPO, the work that needs to be done and the preparation that we need. Plus the timing will be much better to look for an IPO or either two of them, sometime next year more so than this year. William Elderkin – Societe Generale: Okay, thank you.

Thank you. Our next question comes from Nick Holmes. Please proceed with your question. Nick Holmes – Nomura International Plc: Hello there. A couple of questions, please, on the US Variable Annuity book. The first one is, can you tell us what the confidence level above 50% is? You say that it’s significant, but just wondered what it is. And then also, why don’t you take it to the 90% confidence level, which is, I think, the level that you apply for the rest of your reserves? And then also, if you were to do that, what would it cost? And then the second question is just a general question. What sort of appetite are you seeing for the low cost variable annuities that you’re starting to sell? Is it a product basically that you think is going to be successful? Thanks.

Yeah so in respect to the reserve adequacy level, let’s think about it in terms of where we will be as of January 1, right. So we have a number as of December 31st but we also make our equity adjustments as of the 1st of January. So as of the 1st of January it would put us about EUR1.1 billion over the 50th percentile level and I think it works out to be about 73%. Something like that on a confidence level basis. Now why don’t we go to 90%, because I think as we disclosed last time, we really want to run the US business as the US business and that 90 percentile just simply does not exist in a US GAAP or a US competitor situation. So we don’t disclose the number and we don’t intend to. Nick Holmes – Nomura International Plc: Okay, fair enough.

Oh and then the appetite for low cost VA, I would say right now it’s very limited. Nick Holmes – Nomura International Plc: Do you see that changing? Do you see consumer demand for these lower cost variable annuities becoming greater and your product approach actually starting to work?

Potentially but I think right now other competitors in the US have continued with the more traditional rich featured high commission products and those sort of overtake the low cost versions that we’re attempting to sell. Nick Holmes – Nomura International Plc: Okay, and that doesn’t bother you; your strategy isn’t predicated upon VA expansion?

No, not material at all because we would intend to grow the US business really largely based on a retirement services basis where we have a terrific franchise and also the life insurance business is fantastic. So those would be the two cores where we would expect to grow there. Nick Holmes – Nomura International Plc: Okay. Thank you very much.

Thank you. Our next question comes from Michael Van Wegen. Please go ahead with your question. Michael Van Wegen – Bank of America Merrill Lynch Intl.: Yes, good morning. Mike Van Wegen for Bank of America Merrill Lynch. Three questions please. First of all on the capital position within the insurance business, can you update us on your AFR over EC ratio for the end of 2010? And secondly could you just confirm whether there has been any capital been injected in the US business. And finally going back to the cost management within the bank, could you indicate to us what has been the impact from, let’s say, restructuring within the bank PNL, so without the special items and how much of the cost savings that you have been targeted are realized today and how much is still to come? Thank you.

Let me take the AFREC information. So what we will do, we didn’t have it in any of the disclosure that we’ve done for this earnings release but we will publish AFR and EC figures in our annual accounts. But just to give a bit of a preview of those figures. We will give the numbers separately for the Eurasia businesses including Latin America and the US. So the AFREC numbers I’m about to give are for the total insurance businesses excluding the US. Going forward we will run the US as a US insurance company and more focus on RBC ratios which is traditional for the US. So for AFREC for non-US businesses, we have a total AFR of EUR19.7 billion and an EC of EUR10.4 billion. But what we will intend to do is we will increase the EC by about EUR1.5 billion in order to bring us more in to line with where we think the solvency two is going. Similarly, on the UC number, we changed that from a 99.95 percentile confidence level to a 99.5% confidence level. Again, this is more to align ourselves with solvency two. When you work the math out for those businesses excluding the US, you come to an AFREC number of 166%. But there will be more disclosure on that in the annual accounts. For the US businesses, again, we tend to manage that on an RBC basis. We’ve seen on a preliminary basis some increases in the RBC ration up to about 432% and if there were any capital movements, they were de minimus in Q4.

Could you repeat the question? Michael Van Wegen – Bank of America Merrill Lynch Intl.: Yeah on the cost basis for the bank, could you update us, or help clarify to what extent the operating expenses in 2010 will be impacted by restructuring charges in that line rather than in special items? And secondly, how much of your targeted cost savings have already been achieved and, therefore, in the 2010 numbers, and how much can we see going forward?

In respect of restructuring charges or special license, yeah we will have special license coming forward in 2011 and the biggest components there are likely to include the separation cost that Jan eluded to earlier. Michael Van Wegen – Bank of America Merrill Lynch Intl.: They’re outside the Bank P&L, they’re in the special item. I mean outside the special items, are there any restructuring charges booked within the Bank for 2010 which will disappear? And how much of the cost savings that you target have already been achieved today, and how much do you expect going forward?

There’s a number of one-off special restructuring charges in special license in 2010 which will not necessarily recur.

I think the question is what did we realize already? Is that your question? Michael Van Wegen – Bank of America Merrill Lynch Intl.: Yes. How much of your cost savings that you target have you achieved so far? And how much do you expect going forward?

I think we have realized about 2% of what we, 2% reduction in our cost numbers relate to reduction of cost that we have included in 2010. And we still have plans for further cost reductions. I don’t think we have ever disclosed exactly what these plans are but they still are significant opportunities in IT and purchasing and still in a number of other areas where we can significantly reduce our costs. So our plans are there but I don’t think we have officially mentioned them so far, but they are. But you can be assured we are still working on a number of them. Michael Van Wegen – Bank of America Merrill Lynch Intl: Thank you.

Thank you. Our next question comes from Jan Willem Weidema. Please go ahead with your question. Jan Willem Weidema – ABN AMRO: Good morning. Jan Willem Weidema AMRO. I have a question on the comment you just made on economic capital. The increase of EUR1.5 billion at the insurer. How are you going to realize that? That’s related to the remaining hybrids in ING Insurance, and do you expect more conversion there? That is the first question? Secondly, can you say anything about the longevity impact on the Dutch insurance operations? And finally, how comfortable are you with the 5% CAGR for the Bank’s underlying income, given that you guide for similar 5% volume growth but lower interest margins?

So I think that the transaction has already been done in December so it’s accomplished and reflected in the balance sheet that you see. Jan Willem Weidema – ABN AMRO: Okay, and do you expect more to come there?

No. Sorry, I apologize. I missed your question on longevity. Jan Willem Weidema – ABN AMRO: Yes, could you comment on what the impact of the impact of the life expectancy has been on your Insurance results?

Yeah, so there’s no P&L impact. It does have an impact on the test of reserve adequacy but that was baked into our capital planning for the year so it has no P&L impact. Jan Willem Weidema – ABN AMRO: And what has been the impact on shareholders’ equity then?

No impact on shareholders equity either.

Yeah if you talk about it, the 5% CAGR showed that it’s the underlying volume growth. I mean you know given the fact that we guided our margin will stay approximately where they are right now. I mean then the question is, by definition, then you expect a bit, a positive number on your underlying income. Jan Willem Weidema – ABN AMRO: Sorry, let me just look at the slides, because on slide 5 you said you still targeted a CAGR of 5% in your underlying income. But if you expect volumes to be up and you expect some pressure on your net interest margin, can you guide us for how you expect to still come to the 5% CAGR in underlying income?

Yeah, I think there’s another element there that you need to take into consideration that your commission income as well. And I think overall what we have given with that, it’s the long term guidance there where we said like we have that volume increase and please note that when we, two years ago, gave that long term guidance within our net interest margin was even lower then it was right now because we are still at this level of 140 basis points and I think what we just mentioned as well is that our total interest margin is still something which we feel like, you know, it can stay at these levels where it is right now approximately. We have some further balance sheet optimization what we can still do so that is to try to compress that further with lower income type of business and we have our fee business so we feel comfortable with it. Jan Willem Weidema – ABN AMRO: Okay, thank you very much.

Thank you. Our next question comes from Hans Pluijgers. Please go ahead with your question. Hans Pluijgers – CA Cheuvreux: Yes, good morning gentlemen. Two questions, if I may. You already gave some update or indication on the US business respect to Solvency II to bring it in line. That’s why you take some measures. Could you give some indication what do you expect to the impact of Solvency II on the capital base for the other insurance operation, so the Eurasia, Lat-Am operations? And secondly, a more detailed question; there were some model changes in the loan loss provisions and that had an impact. You gave some number of the EUR21 million for the US. Could you give an indication what the impact on the model change in the Dutch and German mortgage book on the loan loss provisions?

So maybe on the first one. On the, if I understand your question well. Its alignment of US with solvency two but we’re not doing that, we’re actually trying to align it more with US based principals so lets a bit take that one off the table and that will be in line with our risk disclosure and so on in the annual accounts. So we don’t really consider the US to be a part of Solvency II going forward. With respect to Solvency II impact on Eurasian businesses, we’re satisfied with our ongoing results but we’re not disclosing any specific information on it.

Yeah and I think if you look at the loan losses, there were a few elements in deed. If you look at the US it is more the interest accrual on modified loans which are part of the interest rate line rather than a deduction from you loan losses and they you are talking about, you know, it’s somewhere, it’s a run-off correction of something like EUR50 million and if you talk about the German and in the Dutch portfolio where we updated our loss given default with some of the experiences then you’re also talking about low teens types of numbers or EUR20 million so it is, you know, net I think it is a bit more illustration that you have to update your model from time to time but if you correct for these then you still see an underlying trend which is actually slightly moving down. Hans Pluijgers – CA Cheuvreux: Thanks.

Thank you. Your next question comes from Marcus Malvalidi. Please proceed with your question.

Good morning everybody. A couple of questions, please. It’s relating more to slide 28 of the presentation. You were talking about reducing debt leverage, or debt within the insurance business going forward for rating agency purposes, and yet I see the core debt figure at January 1st is up to EUR7 billion versus I think it was around EUR3 billion on the same slide you posted last year. Secondly, could you explain, or give a bit a color, please, about the book value increases for Asia Pacific and Benelux over the same period? And then finally, just on legal restructuring, your group structure maybe at a very high level seems to be well set up for the two IPO and separate maybe Lat-Am disposal already, so could you just give some flavor about what legal restructuring needs to be done, and when you’d give the full detail of that as well, please?

I think the core debt at the group level is unchanged from the last time we disclosed.

I’m just looking at the insurance, ING Insurance section of that presentation. The debt is at EUR7 billion versus EUR3 billion on the disclosure at December 31st 2009.

Maybe I’ll take this one. Going forward we look at the total amount of financial leverage in the insurance companies and we see that our definition of core debt had some shortcomings. So what we do is we more align with the way that rating agencies are looking at our total financial leverage. So this is information that you can get right off the balance sheet basically. The core debt involved quite a lot of calculations so this was I think a better figure to use. Going forward on the capital structure I think the increases that you saw in the Benelux in particular for IFRS equity largely related to declines and interest rates over the period and I think you can say about the same thing for Asia Pacific.

Thanks.

Thank you. Our next question comes from Lemer Salah. Please go ahead with your question. Lemer Salah – SNS Securities: Good morning gentlemen. Lemer Salah from SNS Securities. I have two questions left. My first question is regards to IPO. You have mentioned previously that you need like eight months for conducting an IPO. Why are you still planning to conduct your IPO in 2012? That’s my first question. My question is regards the Eastern Europe issues. As you have noticed, there are a lot of stuff going on like bank imposing bank taxes and centralization of pension asset management towards the government. What are your success ratio or chances of ING in Eastern Europe? Thank you very much. Lemer Salah – SNS Securities: My second question regards the Eastern Europe issues. As you have noticed there is a lot of stuff going on, like bank imposing bank taxes and centralization of pension asset management’s towards the government. What is the success ratio or chances of ING in Eastern Europe? Thank you very much.

Okay. With respect to the IPO, if the markets would be very attractive in 2011 and if we can accelerate our program we would certainly take a look at doing it in 2011. But I’ve given you a more likely scenario. With all the things that we have to do it is more likely that it will happen in 2012, and that’s why I think by doing the Dutch government first, or ideally to do most of that first, we also create additional flexibility in the way that we can execute the IPOs. With respect to Eastern Europe, Matt, is that?

I apologize, I missed the question. Lemer Salah – SNS Securities: Well, I can repeat the question for you. What are the chances of ING in Eastern Europe taking into account that bank taxes are imposed in Eastern Europe, for example Hungary, Poland; and going forward that other countries will conduct similar actions? And also the centralization of pension wealth.

Yeah, I think it may be a tale of two cities here. I think clearly we’re facing challenges in the regulatory environment in Hungary and Poland, but by the same token the question is to what extent will normal people want more access to more private pension funds? So a bit we lose out on the mandatory side, but there is at least a glimmer of hope that we could capitalize on the opportunity for more funds.

Yeah, maybe to add on the bank side if you follow our Eastern European activities there, in essence what we are doing is collecting savings, supplying mortgages and supplying money to the economy. We’re not into a very speculative or financial markets type of business over there so somewhere we feel that despite the fact that you get a locational bank tax that it does not change your structural plans to move forward in these markets. So no, we are still quite, quite positive about that. Lemer Salah – SNS Securities: Thanks.

Thank you. Our next question comes from Frederico Salina. Please go ahead with your question.

Yes, good morning. Two things on the insurance side. A), I was wondering if you plan to carry out re-risking of the insurance market in the coming months. And number two, can you give us the sensitivity of the buyable annuity book to (inaudible) markets like you used to previously? Thanks.

So on the first one I think what you’ve seen in the overall insurance book is the increase in the investment margin that we have is partly in due to some moderate re-risking. We really want to take this slowly. You saw that we made some good progress from the overall investment margin, moving from 83 basis points to 93. Our overall target by 2013 is 105. So in this one I think we want to do this in very much of a moderated approach. With respect to earnings sensitivities on the BA business, I think what you’re going to see is basically not a lot of impact relative to equity market movements within a band of about plus or minus 5%. What you will see, though, is as you get into more extremes, and let’s say plus or minus 10%, you’ll see probably like a negative EUR50 million sort of sensitivity around that number. The reason, when equity markets go up we still have some hedge asymmetry; when equity markets go down we lose out on fees. So what you’ll see is within a 5% range, not a lot of impact; once you get out into the extremes, let’s say about EUR50 million.

Thank you. Our next question comes from Tony Silverman. Please go ahead with your question. Tony Silverman – Standard & Poor’s Equity Research: Thank you, good morning. It’s Tony Silverman from Standard & Poor’s Equity Research. Just had a couple of questions left, please. In general terms, the IPOs that you’re contemplating, do you contemplate for the insurance IPOs that they in effect will be a complete sale? Or do you contemplate being left with some stake? I’m hoping perhaps you can elaborate on that. And in connection with that, in an answer to an earlier question you mentioned that there may be some further capital restructuring for the insurance companies in Asia and the US. Can you sort of tell us if that would involve less than EUR5 billion going into them or would it be an immaterial amount anyway? And the second question was around the closed lock again. The markets and other impacts, the narrative – I think it’s on page 34 of the report – refers to EUR150 million charge to do with interest rates going up in Q4. I wonder if you could talk a bit about that. You’ve mentioned a sensitivity to acquisitions in the previous question but the charge for interest rates going up for in respective guarantees seems to be slightly counterintuitive to me. I’d be interested to hear more, thank you.

Okay, let me do the first one, the question related to the IPO. Well, let’s first take a look at what the markets are at the time that we do the IPO and then we can decide what exactly our strategy will be. At the end, I think we want to have 100% sale but most of the time you don’t do that in an IPO. You have a more moderate position that you sell first, let’s say 25% to 40%, and then later you come back and purchase additional tranches. But let’s wait until we know exactly what it is, where we are and what markets we are in before we make any predictions here. The second question will be answered by Matt, eh?

So first on the capital structure, we’re not really anticipating any injection of capital into these companies; it’s more a restructuring of debt and hybrids, and that’ll begin to take place over the first half of the year. But it mainly has to do with rejiggering a bit debt and hybrids in a US holding company versus a Eurasian holding company, so that’s really what we intend to do. With respect to the EUR150 million number that you see on page 34 of our quarterly report, it doesn’t relate to the BA close book – it relates to a certain business. It’s basically a separate account pension business within the Netherlands where we have an imperfect hedge on. And what you see with this thing is when there are- The hedge works within a reasonably narrow band of interest rates and equity movements, but when you have particularly big increases in interest rates then you start to see this volatility come through. You’ve actually seen it in prior quarters and it’s described a bit better when you get into the Beneluk [ph] section, so if you- We know that this number is quite volatile but if you look at that figure over the course of the year it ended up being I think positive EUR25 million. But there is some volatility in that number. Tony Silverman – Standard & Poor’s Equity Research: Great, can we just come back on the restructuring of debt and hybrids that you mentioned? Is that basically substituting equity for those debt and hybrids or something else?

No. It’s just, again we’re holding certain instruments within the US holding company. We’re holding certain instruments within ING (inaudible), which is the holding company for overall insurance. And there probably needs to be some movement between the two but we’re not talking about additional capital or anything of that nature.

And I think we need to be a little careful here because we have not done a complete evaluation analysis yet. I think we will be extremely cautious and careful in how that will be accomplished. So there is still work to be done and still work to come. We can report better I think when we get closer to that than we can at this moment. Tony Silverman – Standard & Poor’s Equity Research: Thanks very much.

Thank you. Our next question comes from Manish Bakhda. Please go ahead with your question. Manish Bakhda – Citigroup: Good morning, Manish Bakhda from Citigroup. My question’s just on CoCo’s, and I noticed back in December there were some comments from ING suggesting that you were looking at developments in the CoCo markets. Just wondering if you had any developments on that, please.

Manish, we’re always looking but we are certainly very carefully looking at, you know, I recognize CoCo’s, I recognize high coupons of 9.5% which you see in the market as well. But you do want to be sure like what is it that you get from this? So it’s a market which we are following but at the same time there are no concrete plans yet that we start to issue something like it. I mean you want some more clarification on regulation, you want some more clarification on where does it help you in terms of buffers; and at the same time we still have the old grandfathering and the old hybrids. We are not in a hurry to do something there, but of course if there’s a new market there’s new opportunities, so from that angle we will certainly look at this. Manish Bakhda – Citigroup: Okay, well thank you very much for that.

Thank you. Our next question comes from Marcus Malvaldi. Please go ahead with your question.

Sorry, I’ve just come back because I think my last question wasn’t- I was cut off before you could answer it. It was about the legal restructuring you’re talking about. Again, your group structure seems to be pretty well set up already for the disposals that you’ve been talking about. Can you just give some color on what you’re actually going to be doing there in terms of restructuring it and when we’ll get the concrete decisions around that?

I think it’s very simple. What we plan to do is we need to make sure that if we take the US operations and want to go public with them, that we have properly structured that in our legal structure. And that is the main thing that I think we need to be doing at this moment as part of our redesign of doing two IPOs. That is the main let’s say legal issue that is there. For the Latin American business, whatever we do, we can put it with the US or we can put it with Europe, or we can let’s say have other options – it’s already positioned to do that so there will not be too much work on that side.

Thank you.

Thank you. Our next question comes from Farooq Hanif. Please go ahead with your question. Farooq Hanif – Morgan Stanley: Hi there, thanks for taking a follow-up question. I just wanted to ask about your capacity to repay the Dutch government this year from internal resources, leaving aside the question of the amount of penalty you may or may not need to pay. Can you comment on that?

Not really that much. I can only say that we have an intention to repay at least a significant amount. We also need to be mindful of the higher requirements of Basel III. We need to be mindful that there are other things happening in the world, and of course we are generating income. And all that together I think will determine at some point how much we have available from internally-generated activities; plus we are maybe still planning to do some transactions in the meantime as well, some sales, divestments that can also generate capital funds. So all that together will determine to what extent we have the ability to pay back and the amount we can pay back, but everything is taken into account. The one thing that we are not counting on and that we are not excluding is that we will go back to the market for more capital. We don’t want to do that. We want to do it with internally-generated funds. Farooq Hanif – Morgan Stanley: Okay, that’s very clear. Thank you.

Thank you. (Operator Instructions). Our next question comes from Jan Willem Weidema. Please go ahead with your question. Jan Willem Weidema – ABN AMRO: Yes, everyone, a follow-up question following also what Farooq just asked, what kind of (inaudible) level will be looking at in the bank after you’ve repaid the state the 7.5, which is sort of the old guidance and I think we’ll be looking more towards 8 or higher with a view to B-3?

I think we have already answered that earlier. I gave the answer that we would not like to see it go down below the 8% level, and we need to be comfortable as well. So this is a moving number. Over time it might even go higher than that – we don’t know yet. There’s still too many issues we need to determine, but it’s higher than the 7.5%. It’s certainly higher than 8%. Jan Willem Weidema – ABN AMRO: Okay, thank you.

Thank you.

Thank you.