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              Why India ?

30 May 2006                 0

Table of content

• Executive Summary
• China – India
• India
• ING in India
• Conclusion

May 2006

                      Page 1

Executive Summary

• India has always held great promise. Soon after independence, in 1947, its foreign reserves
  were among the world’s largest, at $2.1 billion in 1950-51, and it accounted for 2.4% of global
  trade. Over the next 44 years, however, attempts to follow the Soviet model of self-sufficiency
  brought the country to the verge of bankruptcy. Domestic savings failed to keep pace with the
  investment needed to contain unemployment, especially as India’s working-age population
  expanded. The crisis begged for drastic reform, and in 1991 the government delivered.
• The reform program took its cue from China, which by 1991 had surpassed India on all major
  economic indicators. But in the shadow of the Chinese economic miracle, it is easy to overlook
  what India’s reforms have accomplished during the past 15 years. A solid foundation for
  growth is now in place: the program of renewal backed by successive governments, has
  increased the country’s foreign reserves to an enviable USD 140 billion and raised annual
  economic growth from an average of around 4% in the four decades before reform to 8%.
  Sustainable growth rates of 8% to 10% are within reach. The amount of FDI coming into the
  country, often cited as a failure of India’s policy, has grown from about $100 million in the early
  1990s to about $7 billion today. If China were not the yardstick used to measure India, this
  increase would be a matter of celebration, not censure.

May 2006

                                                 Page 2

Executive Summary

• India leads the market in off-shored back-office services, but as a manufacturing center it is
  perceived to lag behind China and other parts of Asia. The reasons are well documented:
  companies operating in India must overcome erratic electricity supplies, poor roads, and
  gridlocked seaports and airports while contending with government policies that discourage
  hiring. Such obstacles can be considerable, but they haven’t stopped the creation of a number
  of major global manufacturing entities as well as multinational manufacturing companies from
  setting up shop in India. The common characteristic is that they operate in skill-intensive
  industries (ex. auto components and assembly, fabricated metal products, pharmaceuticals
  and telecom equipment) requiring advanced technical expertise – areas in which India is likely
  to become a primary sourcing and manufacturing base. Research supports the view that the
  next wave of global outsourcing in manufacturing will take place in just these kind of industries.
• ING has a unique position in the Indian financial market with a presence in the banking,
  insurance as well as the mutual fund space, leveraging on a common branding
• ING Vysya Bank is unique in that it is a domestic bank (established in 1931) with ING control
  and: has a long history across multiple customer segments, does not have restrictions
  imposed on other foreign banks present in India, has a geographic reach which exceeds any
  of the foreign banks and offers a wide range of services to multiple customer segments (retail,
  agri, SME, mid-corporates, large corporates, multinationals etc…)

May 2006

                                                Page 3

China - India

• First it was China. The rest of the world looked on in disbelief, then awe, as the Chinese
  economy began to take off in the 1980s at what seemed like lightning speed and the country
  positioned itself as a global economic power. GDP growth, driven largely by manufacturing
  reached unseen levels. China used its vast reservoirs of domestic savings to build an
  impressive infrastructure and sucked in huge amounts of foreign money to build factories and
  to acquire the expertise it needed.
• India began its economic transformation almost a decade after China did but India has
  recently grabbed just as much attention, prompted largely by the number of jobs transferred to
  it from the West. At the same time, the country is rapidly creating world-class businesses in
  knowledge-based industries such as software, IT services, pharmaceuticals. These
  companies, which emerged with little government assistance, have propelled the economy.
  But India’s level of foreign direct investment is a fraction of China’s.
• China and India have followed radically different approaches to economic development.
  China’s resulted from a conscious decision; India more or less happened upon its course. Is
  one better than the other? There is no gainsaying the fact that China’s growth has rocketed
  ahead of India’s, but the conventional view that the Chinese model is unambiguously the
  better of the two is wrong in many ways; each has its advantages. And it is far from clear
  which will deliver the more sustainable growth.

May 2006

                                               Page 4
China – India

• The approaches differ on two dimensions:
    - The Chinese government nurtures and directs economic activity more than the Indian
        government does. It invests heavily in physical infrastructure and often decides which
        companies – not necessarily the best – receive government resources and listing on local
        stock markets. By contrast, since the early 90s the Indian government has become less and
        less interventionist
    - FDI: China has embraced it, India remains cautious
• The differences have an impact on the type of companies that succeed and on
    - China trumps India when it comes to industries that rely on “hard” infrastructure (roads,
        ports, power) and will do so for the foreseeable future.
    - But, when it comes to “soft” infrastructure business – those in which intangible assets matter
        more – India tends to come out ahead, be it in software, biotechnology or creative industries.
        Soft assets underpin even the Indian car industry. Where in China the car industry has
        expanded as a result of big capital investments from multinational companies, India’s has
        succeeded on the back of clever designs that make it possible to produce cheap indigenous
        models. India actually sends China high-value-added mechanized and electronic
        components whose production depends more on know-how than on infrastructure.
    - Many hard asset companies in China exist because the government funnels money to them.
        The government can do this because it intervenes in the domestic capital markets. In India
        there is no such government intervention. Hence successful companies tend to cluster in
        industries where capital constraints are less of an issue. You do not need a deep reservoir
May 2006
        of capital to start a software company; you do for a big steel plant.
                                                 Page 5
China – India

    - The Indian government’s lower level of intervention in capital markets and its decision not to
      regulate industries that lack tangible assets have created room for entrepreneurs.
      Entrepreneurial activity is fueled both by incumbent enterprises and new entrants. The first
      use cash flows from diverse existing businesses to invest in new ventures. However many
      new “soft” companies with no links to the government have emerged from pure
      entrepreneurial effort.
    - Good hard infrastructure and the Chinese government’s decision to welcome FDI make it
      reasonably easy for multinationals to do business in China, and since they bring their own
      capital and senior talent, they do not have to rely heavily on local institutions. China has no
      shortage of homegrown entrepreneurial talent, however indigenous companies have a much
      tougher time, hindered as they are by inefficient capital markets, a banking system heavily
      influenced by government policy and the fact that local officials rather than the market forces
      largely decide on who receives funding
    - India’s stock and bond markets are hardly perfect, however they do on the whole support
      private enterprise. Both the BSE and NSE are today highly efficient and successful.
    - Conclusion: China and India both have the ability to keep growing in their own different ways
      for a decade or so. While the strong economic performance has been primarily driven by the
      service sector over the past decade, India has also strong capabilities in manufacturing. This
      is slowly gaining in prominence. It is believed that the next wave of growth in India will be
      powered by the manufacturing sector. Indian manufactured products are gaining increasing
      acceptance in world markets. India already exports about USD 50 billion in manufactured
      goods and this is increasing at a rate of 20% p.a. By 2015 expected to reach USD 300 billion
      and a third of this will be captured by apparel, auto components, specialty chemicals and
      electrical and electronic products.
May 2006

                                                  Page 6
Positive macro economic picture with extremely favourable demographics

LT Foreign currency rating:
                                                                                                                          India is the only country with increasing proportion of
                                                                                                                                       earning population out to 2025
           -   Moody’s: Baa3
           -   S&P: BB+
                                                                                                                                         Working Age Population Projected to Decline
           -   Fitch: BB+
                                                                                                                     68                                                                          Brazil
           -   FX reserves in excess of USD 140 billion
           -   There is great confidence in India’s potential to sustain a period                                    66

               of high growth.                                                                                       64                                                                          Russia

                                                                                             % of total population
           -   India ranks  4th
                            in terms of Purchasing Power Parity, next only to                                        62
               the USA, China and Japan                                                                                                                                                          India
           -   Modest and declining external debt burden (32% of current
               external receipts)
                                                                                                                     56                                                                          China
           -   Unblemished debt service record
           -   Relatively robust democratic and private sector institutions
                                                                                                                     52                                                                          G6
           -   High savings rate (+25%)
           -   Availability of highly qualified/inexpensive talent pool                                                   2000   2005   2010   2015   2020   2025    2030   2035   2040   2045
           -   Persistently high fiscal deficit (10.1% of GDP)                                                        India is home to the youngest population in the world, where
           -   Increasing government debt burden (80% of GDP), which is                                                50% are under the age of 25, and 85% below that of 50. The
               primarily financed through the domestic markets)
                                                                                                                          median age of the population is 24 years. This growing
           -   Coalition politics deter effective policy formulation
                                                                                                                     working population is providing “fire-power” to the demand for
Challenges                                                                                                             lifestyle products and services. Discretionary spending has
           -   Improving physical infrastructure                                                                         increased by 16% for the upper and middle class Indians.
           -   Maintaining pace of reform
           -   Expansion of industry base to create employment opportunities
                                                                                                                     Increasing urbanisation (population classified as middle-class:
      As per BRICs report of Goldman Sachs, India’s GDP currently
                                                                                                                       300 million), increased nuclearisation of families, change in
       surpasses Mexico, Brazil and Russia, by 2010 will surpass
                                                                                                                                traditional debt averse nature of consumers
      Korea and by 2025 will surpass Italy, France, UK and Germany

May 2006

                                                                                    Page 7
India – Some facts

• India is the largest three wheeler market and the second largest two wheeler market
  in the world
• India is the second largest jewelry market and largest diamond cutting and polishing
  centre in the world
• India stands 19th in production and 16th in consumption of machine tools in the world
• India’s textile industry is the second largest in the world in cotton trade
• The Indian chemical industry ranks 12th by volume in the world for production of
• India is the 3rd largest leather producer in the world after China and Italy
• India is the world’s largest producer of milk, tea and pulses and the world’s second
  largest fruit and vegetable producer
• India has the world’s largest livestock population
• India has the largest irrigated land area in the world
• India ranks 6th in the world in iron ore deposits and 5th in terms of bauxite deposits
May 2006

                                            Page 8

10 key sectors that comprise the bulk of Indian
• Engineering
• Electronics
• Automotive
• Textiles
• Chemicals
• Leather
• Metals
• Machine tools
• Food processing
• Gems and Jewelry

May 2006

                         Page 9

Competitive advantage of Indian manufacturing

• Availability of skilled labor
• Availability of raw materials
• Engineering and managerial capabilities
• Quality focus
• Large domestic market
    - Large target consumer base and rising income levels
    - Increasing consumerism
    - Changing age profile of Indian population
    - Changing lifestyles
• Location and infrastructure
• Government support and regulation

May 2006

                                           Page 10

    ING Vysya : at present in top 10 among private and foreign banks
                      Overall Market Size - Deposits (%)                                                             Overall Market Size - Advances (%)

                                                                                                            8                 7.2
            5                   4.3                                                                         7
            3                                                                                               4
                    1.9                                                                                     3        2.1
            2                                                                                                                                     1.8                    1.9
                                                         1.3                   1.3                          2                                                 1.1
                                                                     1.0                                                                 0.8                                       0.8
            1                                                                            0.7                1
            0                                                                                                    HDFC      ICICI B ank   ABN     Citibank    HSB C     Stanchart   IVB
                    HDFC     ICICI B ank     ABN        Citibank     HSB C   Stanchart    IVB                    B ank                   A mro
                    B ank                    A mro

                Overall Market Size - Profits in Mio Euro                                                       IVB Position (Private + Foreign Banks)
                                                                                                                     Deposits                                       Advances
                                                                                                          Position    Bank          Share                   Position    Bank         Share
            350                                                                                              1        ICICI Bank      4.3%                      1       ICICI Bank    7.2%
                                297.7                                                                        2        HDFC Bank       1.9%                      2       HDFC Bank     2.1%
                                                                                                             3        UTI Bank        1.3%                      3       Stanchart     1.9%
            250                                                                                              4        Citibank        1.3%                      4       Citibank      1.8%
            200                                                                                              5        Stanchart       1.3%                      5       HSBC          1.1%
                                                                                                             6        J&K Bank        1.2%                      6       UTI Bank      1.1%
            150                                          103.9                108.4                          7        HSBC            1.0%                      7       J&K Bank      1.1%
            100                                                      71.6                                    8        Federal Bank    0.9%                      8       IndusInd Bank 0.9%
                                              35.4                                                           9        IndusInd Bank   0.7%                      9       Federal Bank  0.9%
            50                                                                           10.7               10        ING Vysya       0.7%                     10       IDBI Bank     0.9%
                0                                                                                           11        IDBI Bank       0.6%                     11       ING Vysya     0.8%
                     HDFC        ICICI        ABN       Citibank     HSB C   Stanchart    IVB               12        Karnataka Bank 0.6%                      12       ABN Amro      0.8%
                     B ank       B ank        A mro
                                                                                                            17        ABN Amro           0.4%
                                                                                                                                                               20       Bank of Punjab   0.3%
                                                                                                            21        Bank of Punjab     0.3%
                                                                                                            33        BNP Paribas        0.1%                  30       BNP Paribas      0.2%
       Private Sector                      Foreign             IVB
Source: Business Standard, Banking Annual          Data as of March, 2004

 May 2006

                                                                                                Page 11

Key milestones

                                                                                                           Vysya Bank renamed
                                                                                                           as ING Vysya Bank

                                                                                                           ING Vysya Bank
                                                                                                           acquired 26% stake in
                                                      Barings Private                                      ING Investment
                                 ING Group            Equity established in                                Management (India)
                                 acquired Barings     India                                                Private Limited
                                                                            ING set up joint venture
                                                                            with                           (this is the Asset
                                  globally thereby   ING Investment Trust Vysya Bank                       Management
              Barings started     acquiring the      (Asset Management      and GMR group                  Company which
              Investment Banking business of Barings business) incorporated for the foray into             manages the ING
              operations in India in India as well   in India               Insurance Sector in India      Vysya Mutual Fund)

       1990    1991      1994     1995 1996          1997        1998          2000        2001         2002        2003        2005

     ING Bank N.V.     ING Bank N.V.      Bank Brussels      ING Group                ING Vysya Life     ING became          ING Vysya
     set up a          representative     Lambert            sets up                  Insurance          the single          Bank sold its
     representative    office             acquired a         representative           Company            largest             entire 14.87%
     office in India   converted into     strategic stake    office for               begins             shareholder in      shareholding
                       full-service       in Vysya Bank      Insurance in             operations         Vysya Bank          in ING Vysya
                       branch                                India MoU                                   by increasing       Life Insurance
                                                             signed with                                 its stake to        to Gujarat
                                                             Vysya Bank                                  44%                 Ambuja

May 2006

                                                                          Page 12

Broad Based Financial Services Provider

A broad based                                                                    •       JV ING, Exide Industries
presence across all                                                                      and Gujarat Ambuja
segments of
                                                                                 •       Over US$90m invested
financial markets
                                                                                 •       Operates through 43
unmatched by any                                                                         branches in 25 cities and
other international    Retail & SME Banking                                              distributes products
                                                                                         through 400+ bank
bank in India                                                                            branch network                  •    Over US$700m
                                                                                                                              of assets
                                         •       Unmatched SME
Entire spectrum of                               capabilities                                                            •    Nineteen funds
corporate, SME                           •       1.8 million
                                                                                                                              targeting different
                                                                                                                              sectors with varied
and individual                                   customers
                                                                                                                              growth profile
clients addressed                                                                        Life Insurance

                                             •    Combination
                                                  of ING’s global
                                                  network with ING
                                                  Vysya Bank’s                                                       •       Rupee & Forex
                                                                                         Private Banking                     Products
                                                  domestic reach and
                                                  balance sheet                                                      •       Hedging and
                                             •    Relationships with                                                         Structured
                                                  global clients and                                                         Products
                                                  large domestic
                                                                                     •     Focus on high net
                                                                                           worth individuals
                      Corporate & Investment
                                                                                                                                             Financial Markets

May 2006

                                                                       Page 13

ING Vysya Bank Structure

           Wholesale Bank                     Retail Bank

 • Corporate & Investment             • Branch Banking
                                      • Small & Medium
 • Emerging Corporates                  Enterprises (turnover of
 • Banks & Financial                    less than 750 million rs)
   Institutions                       • Agri & Social Banking
 • Financial Markets                  • Private Banking
                                      • Distribution & Marketing

May 2006

                            Page 14

Wholesale Bank Product Matrix

                                                          Wholesale Products

                                                                                    Trade &
                                      Investment                 Cash                                       Financial
           Credit Products                                                         Commodity
                                        Banking               Management                                    Markets
   • Working Capital               • Financial Advisory     • Collection and    • ECA financing        • Forex Products
          - Cash credit                 - Mergers &           Payment Service   • Commodity finance         - Spot
          - Export credit                 Acquisitions                                                      - Forward
                                                                - Rapid         • L/Cs, guarantees
          - LCs                         - Private capital         collection                                  covers
                                          raising                 service       • Bid / performance         - Swaps
          - Guarantees                                                            bonds
                                        - Debt                                                         • Hedging &
          - Banker’s Acceptances          restructuring         - Upcountry
                                                                  collection    • Trade syndications     Structured
          - Commercial paper            - Project finance                                                Products
          - Bill discounting              / Structured          - Pay-out
                                                                                                            - O/n indexed
                                          finance                 services                                    swaps
   •   Term lending                       advisory
                                                                - Electronic                                - MIFOR swaps
          - Corporate lending      • Local debt                                                               / Coupon
          - Project finance          distribution                                                             swaps
                                        - Loan              • Concentration
          - Bridge financing                                                                                - Quontos /
                                          syndication         Accounts
   •   Structured finance                                                                                     Corridor swaps
                                        - Local currency    • Payable at par                                - G - 7 options /
   •   Channel financing                  bond                cheques                                         FRAs / FX IRS
   •   Cross border loan                  distribution
                                                            • Escrow accounts
       syndications                • Securitisation
May 2006

                                                                Page 15

ING Vysya Bank Overview

                              Key statistics                                            Key financials – FYE March, 2005
    Branches: 454                                                               Shareholders Equity             € 189 mn
    Employees: 4,871                            North & East Region
    ATMs: 79 (access to more than               # of Branches- 33               Deposits                        € 2.3 bn
    9,000 shared ATMs)
                                                                                Advances                        € 1.7 bn
     West Region                                                                Investments                     € 764 mn
     # of Branches- 30
                                                                                Total Assets                    € 2.9 bn

                                                                                Interest Income                 € 185 mn
    South (ex AP)
    # of Branches- 193                                                          Interest Expense                € 118 mn
                                               AP Region                        NII                             € 67 mn
                                               # of Branches-196
       Regional Offices: 11
                                                                                Non Interest Income             € 35 mn

                                                                                CAR (as on Dec 31, 2005)        + 10.4%
                Credit ratings: AA+ from Fitch                                  Net NPA                         2.13%
                and Crisil (S&P affiliate) and
                                                                                Credit Deposit Ratio            79%
                P1+ from Crisil
                                                                                 INR / Euro – 53.5

May 2006

                                                                      Page 16
Summarising the India Opportunity                                                  Jan-12

                                     Sound Economic

            Favourable                                         Positive Business
           Demographics                                          Environment


             Huge Untapped Retail                        Opportunity for long
                 Opportunity                             term value creation

                                    Unique position of

May 2006

                                            Page 17

  Key Contacts

                  Name                          Designation      Location          Tel No.           Mobile               Email id

      Vaughn Richtor     MD & CEO - ING Vysya Bank Limited       Bangalore         91 80 2500 5602       

     Ravindra Kumar      Country Head - Wholesale Bank           Mumbai            91 22 5666 6411   98210 25192

     S. Vishwanathan     Head - Emerging Corporates              Bangalore         91 80 2500 5633   98440 77843

     Atul Joshi          Head - Banks & Financial Institutions   Mumbai            91 22 5666 6421   98213 34211

     Sunil Varma         Head Client Coverage - C&IB*- West & East Mumbai          91 22 5666 6414   98203 21007

     Devang Rawal        Head Client Coverage - C&IB - West      Mumbai            91 22 5666 6419   98203 31757

     Sanjeev Mittal      Head Client Coverage - C&IB - North     Delhi             91 11 5551 0107   98715 55445

      Satish Menon       Head Client Coverage - C&IB - South     Bangalore         91 80 2500 5201   98454 52255

*C&IB – Corporate & Investment Banking
 May 2006

                                                                         Page 18

 Thank You

Any questions?



May 2006

            Page 20
  India Map             Jan-12

May 2006

              Page 21

Client Relationships: A Wide Cross Section

May 2006

                        Page 22

Wholesale Bank: Select milestone transactions

                         November 2004                             August 2004                                   February 2005                            March 2005                                 March 2005

 United Phosphorus Limited                Jindal Vijayanagar Steel               Tata Teleservices Limited                       Reliance Industries Limited            Indian Oil Corporation Limited
 USD 35.75 mn                             USD 75 mn                              INR 500 mn                                      USD 350 mn                             USD 50 mn
 Acquisition of Agvalue, US               Structured Commodity Finance           Term Financing                                  Offshore Loan Syndication              Structured Oil Import Financing

 Financial Adviser                        Mandated Lead Arranger                 Structured Bilateral Facility                   Mandated Lead Arranger                 Bilateral Financing

                             April 2005                            August 2005                                       May 2005                              June 2005                                  June 2005

 DLF Universal                            ING Group                              ICICI Bank Limited                              ICICI Bank Limited                     National Housing Bank
 INR 1,600 mn                             INR 609 mn                             USD 60 mn                                       INR 5,250 mn                           INR 5,000 mn
 Local Debt Syndication                   Sale of 14.87% stake in                Offshore Term Loan Facility                     Private Placement of                   Private Placement of Bonds
                                          ING Vysya Life Insurance to                                                            Subordinated Bonds
                                          Gujarat Ambuja Cement

 Lead Arranger                            Financial Advisor                      Mandated Lead Arranger                          Lead Arranger                          Lead Arranger

                           August 2005                             August 2005                                     August 2005                            August 2005                            September 2005

 National Bank for Agriculture            Indian Oil Corporation Limited         Gujarat Ambuja Cements Ltd                      Corporation Bank                       Reliance Industries Limited
 And Rural Development                    USD 200 mn                             USD 100 mn                                      USD 50 mn                              USD 348 mn
 INR 7,850 mn                             Offshore Loan Syndication              Offshore Loan Syndication                       Term Loan Facility                                 -
                                                                                                                                                                        Offshore Loan Syndication
 Non-Priority Sector Bonds

 Coordinating Arranger                    Mandated Lead Arranger                 Mandated Lead Arranger                          Mandated Lead Arranger                 Mandated Lead Arranger

May 2006

                                                                                                   Page 23

Wholesale Bank: Select milestone transactions

                                  September 2005                            September 2005                             September 2005                          September 2005                            September 2005

 State Bank of Patiala                             ICICI Bank Limited                        Bank of India                               Bank of Baroda                         Canara Bank
 INR 10,000 mn                                     INR 5,000 mn                              INR 7,500 mn                                INR 7,700 mn                           INR 5,000 mn
 Certificate of Deposit Placement                  Private Placement of                      Private Placement of                        Private Placement of                   Private Placement of
                                                   Subordinated Bonds                        Subordinated Bonds                          Subordinated Bonds                     Subordinated Bonds

 Advisor & Sole Placement Agent                    Lead Arranger                             Lead Arranger                              Lead Arranger                           Lead Arranger

                                   October 2005                             November 2005                                October 2005                          December 2005                                  June 2005

 HDFC Bank                                         Randstad Holding NV                       GMR Industries Limited                     Syndicate Bank                          The Catholic Syrian Bank Ltd
 INR 2,030 mn                                                                                INR 2,032 mn                               INR 5,000 mn                            INR 400 mn
 Private Placement of                              Acquisition of major stake in             Sale of 49.13% stake in                    Private Placement of                    Private Placement of
 Subordinated Bonds                                EmmayHR Service Private Ltd               ING Vysya Life Insurance to                Subordinated Bonds                      Subordinated Bonds
                                                                                             Exide Industries Limited

 Lead Arranger                                     Advisor                                   Financial Advisor                          Lead Arranger                           Lead Arranger

                                  December 2005                             December 2005                                January 2006                            January 2006                             February 2006

 ICICI Bank Limited                                Indian Oil Corporation Limited            IDBI Bank                                  Housing and Urban                       Hindustan Petroleum
 INR 2,920 mn                                      USD 300 mn                                INR 6,850 mn                               Development Corporation Ltd             Corporation Limited
 Private Placement of                              Offshore Loan Syndication                 Private Placement of Bonds                 INR 6,414 mn                            USD 348 mn
 Subordinated Bonds                                                                                                                     Private Placement of Bonds              Offshore Loan Syndication

 Lead Arranger                                     Mandated Lead Arranger                    Lead Arranger                              Lead Arranger                           Mandated Lead Arranger

May 2006

                                                                                                             Page 24

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