S&P Affms Rtgs on ING GROEP and Related Entities.

Business Editors

LONDON--(BUSINESS WIRE)--Standard & Poor's

Dec. 13, 2001-- Standard & Poor's today affirmed its ratings on ING GROEP N.V., ING Verzekeringen N.V. (INGV), ING Bank N.V., and related entities, including its double-'A'-minus long-term and its 'A-1'-plus short-term counterparty credit ratings. The outlooks on ING GROEP N.V. and INGV have been revised to negative from stable. The outlook on ING Bank remains stable. For details of rating actions on the U.S. life insurance entities, please see separate press release.

Domiciled in The Netherlands, ING GROEP N.V. is the holding company for the ING Group, which is active in banking and/or insurance in 65 countries across the world, with EUR486 billion in funds under management at Sept. 30, 2001. ING Bank N.V. and its subsidiaries carry out all banking activities. All insurance operations are consolidated under INGV, which is an intermediate holding company. Both ING Bank and INGV are 100%-owned by ING GROEP N.V.

The narrow notching of the ING GROEP N.V. ratings are driven by the diversification benefit from owning a 'AA-' rated bank and somewhat stronger insurance operations. In addition, geographical diversification and scale, as one of the world's top 20 financial institutions, provides significant financial flexibility.

INGV is rated below the financial strength rating of the insurance sub-group to reflect the structural subordination of creditors to the security of policyholders at the operating company level. Nevertheless, the 'AA-' rating on INGV also benefits to some degree from the diversification and financial flexibility of the insurance sub-group in its own right.

The ratings on ING Bank and its subsidiaries reflect its strong position in the Benelux countries, satisfactory asset quality, and adequate capitalization. The bank's profits will be subdued in 2001 and asset quality is experiencing some pressure as a result of the deteriorating operating environment, however. Nevertheless, the sale of U.S. and closure of London-based global investment banking in early 2001, and the integration of remaining investment banking activities into wholesale operations signal both a welcome reduction in risk profile and a more customer-focused strategy centering on European retail and wholesale banking and wealth management. This is accompanied by evidently tighter and more cohesive management of the bank's main businesses and a clear determination to reduce costs and realize income synergies, both within the banking businesses, and between banking and insurance. These moves are positive for the bank and should help enhance future asset quality and earnings streams and counter the effects of depressed operating conditions.

The financial strength of the insurance operations is based on the sub-group's very strong business position in The Netherlands and the U.S., and very strong financial flexibility. Capitalization has weakened significantly after the goodwill write-off incurred when INGV acquired both ReliaStar Financial Corp. (AA-/Negative/--) for EUR6.7 billion and the insurance activities of the Aetna group for EUR8.3 billion in 2000. The acquisitions have given the insurance sub-group the potential to deliver significantly improved earnings, which will help to rebuild capital over the next two years. Standard & Poor's expects 2002 underlying pretax earnings from North American insurance to show impressive growth toward EUR1.2 billion. Earnings in its domestic market are extremely strong and are not matched elsewhere in the group.

OUTLOOK: NEGATIVE

The outlook on ING GROEP N.V. and INGV is driven by concerns that management may be challenged in translating its recently acquired impressive U.S. life business position into the expected improved earnings. Notwithstanding the recently announced plans to reduce headcount by 15%, the challenge of integration remains significant, culturally, operationally, and legally. In addition, the negative economic trends in the U.S. provide limited margin for error.

OUTLOOK: STABLE

The outlook on ING Bank N.V. assumes greater earnings stability in the medium term given the reduction in more volatile investment banking businesses and improved cost controls. To achieve this, the bank must now build on its revised position in wholesale banking, which will be challenging given the weakening global environment. The ratings are also underpinned by the prospects of continuing integration of banking, insurance, and asset management activities across the ING Group.

A complete list of ratings is available on RatingsDirect, Standard & Poor's Web-based credit analysis system, or by calling the Standard & Poor's Ratings Desk on London (44) 20-7847-7400.