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Euro Programme for the Issuance of ING DiBa

VIEWS: 24 PAGES: 303

									                                                                                            Base Prospectus
                                                                                               14 Mai 2012
This document constitutes a base prospectus in respect of non-equity securities in the form of Pfandbriefe
within the meaning of Art. 22 (6) No. 3 of the Commission Regulation (EC) no. 809/2004 of 29 April 2004
(the "Base Prospectus").




        ING-DiBa AG, Frankfurt am Main, Federal Republic of Germany

                                     Euro 10,000,000,000

                    Programme for the Issuance of Pfandbriefe

                                      (the "Programme")
Under this Programme, ING-DiBa AG (the "Issuer") may from time to time issue Mortgage Pfandbriefe
(Hypothekenpfandbriefe) in bearer form (the "Pfandbriefe") in an aggregate principal amount of up to
Euro 10,000,000,000. Pfandbriefe to be issued under this Programme must denominate in Euro. In the case
of any Pfandbriefe which are to be admitted to trading on a regulated market within the European
Economic Area or offered to the public in a Member State of the European Economic Area in
circumstances which require the publication of a prospectus under Directive 2003/71/EC of the European
Parliament and of the Council of 4 November 2003 (the "2003 Prospectus Directive") as amended by
Directive 2010/73/EU of the European Parliament and the Council of 24 November 2010 (the "2010 PD
Amending Directive" and together with the 2003 Prospectus Directive, the "Prospectus Directive") the
minimum specified denomination will be EUR 100,000.

The Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin") in its capacity as competent authority
within the meaning of § 21 of the German Securities Prospectus Act (Wertpapierprospektgesetz ("WpPG")
which implements the 2003 Prospectus Directive but not yet the 2010 PD Amending Directive into German
law has approved this Base Prospectus. Approval by BaFin means the positive act at the outcome of the
scrutiny of the completeness of this Base Prospectus including the consistency of the information given and
its comprehensibility.

Application has been made for the Pfandbriefe to be issued under the Programme to be admitted to trading
on the regulated market (regulierter Markt) of the Frankfurt Stock Exchange. The Pfandbriefe may,
however, be admitted to trading and listed on such other or further stock exchange(s), or not listed on any
stock exchange, as specified in the applicable Final Terms (as defined below).

The Issuer has requested BaFin to provide the competent authority in the Grand-Duchy of Luxembourg
with a certificate of approval attesting that the Base Prospectus has been drawn up in accordance with the
WpPG which implements the 2003 Prospectus Directive into German law.
                                                Arranger

                                             Commerzbank
                                                                              -2-


                                                             TABLE OF CONTENTS
Part A: Summary of the Base Prospectus ............................................................................................3
A.I. Summary of the Base Prospectus (English Language Version)........................................................3
   A. Summary of the Risk Factors .........................................................................................................3
   B. General Information about the Programme ..................................................................................11
   C. Summary of the Terms and Conditions of the Pfandbriefe and Related Information ..................11
   D. Summary of the Description of the Issuer....................................................................................14
A.II. Zusammenfassung des Basisprospekts (German Language Version) ............................................17
   A. Zusammenfassung der Risikofaktoren ..........................................................................................17
   B. Allgemeine Informationen über das Programm ...........................................................................26
   C. Zusammenfassung der Emissionsbedingungen der Pfandbriefe und ähnliche Informationen .....27
   D. Zusammenfassung der Beschreibung der Emittentin ...................................................................29
Part B: Risk Factors.............................................................................................................................33
B.I. Risks Relating to the Pfandbriefe ....................................................................................................33
B.II. Risks Relating to the Issuer............................................................................................................37
Part C: Responsibility Statement........................................................................................................41
Part D: Important Notice.....................................................................................................................42
Part E: Terms and Conditions of the Pfandbriefe and Related Information .................................44
E.I. General Information applicable to the Pfandbriefe .........................................................................45
E.II. Terms and Conditions of the Pfandbriefe - German and English Language Version-
Emissionsbedingungen für Pfandbriefe – Deutsche und englische Fassung - .......................................47
E.III. Terms and Conditions of the Jumbo Pfandbriefe - German and English Language Version -
Emissionsbedingungen für Jumbo Pfandbriefe – Deutsche und englische Fassung - ...........................65
E.IV Form of Final Terms (Muster-Endgültige Bedingungen) ..............................................................73
Part F: Information relating to Pfandbriefe ......................................................................................87
Part G: Taxation...................................................................................................................................91
Part H: Subscription and Sale.............................................................................................................95
Part I: Description of the Issuer........................................................................................................100
Part J: General Information .............................................................................................................108
General .................................................................................................................................................108
Use of Proceeds ....................................................................................................................................108
Authorisation........................................................................................................................................108
Listing and Trading ..............................................................................................................................108
Ratings..................................................................................................................................................108
Documents available for Inspection .....................................................................................................109
Documents incorporated by reference..................................................................................................109

Annex A: Consolidated Financial Information of the Issuer in accordance with IFRS for the
financial year ended 31 December 2011 (English Translation from the German language version)…                                                                  111

Annex B: Unconsolidated Financial Information of the Issuer in accordance with the German
Commercial Code (HGB) for the financial year ended 31 December 2011 (English Translation from
the German language version)…………………………………………………………………………….                                    112

Address List………………………………………………………………………………………………….                                                                                                             113

Signatories…………………………………………………………………………………............................ S-1
                                                       -3-



                                                                               Part A.I. of the Base Prospectus
                                                                              Summary of the Base Prospectus

                               SUMMARY OF THE BASE PROSPECTUS
                                 (ENGLISH LANGUAGE VERSION)

This is a summary (the "Summary") of the essential characteristics and risks associated with the Issuer and
the Pfandbriefe to be issued under the Programme. This Summary should be read as an introduction to this
Base Prospectus. Any decision by an investor to invest in the Pfandbriefe should be based on consideration
of this Base Prospectus as a whole, any supplements thereto and the relevant final terms (the "Final
Terms"). Where a claim relating to the information contained in this Base Prospectus, any supplement
thereto and the relevant Final Terms is brought before a court, the plaintiff investor might, under the
national legislation of such court, have to bear the costs of translating the Base Prospectus, any supplement
thereto and the relevant Final Terms before the legal proceedings are initiated. Civil liability attaches to the
Issuer who has tabled this Summary including any translation thereof, but only if the Summary is
misleading, inaccurate or inconsistent when read together with the other parts of this Base Prospectus.

A.    Summary of the "Risk Factors"

An investment in the Pfandbriefe involves certain risks relating to the Issuer and the relevant Series of
Pfandbriefe. Potential investors should be aware that the risks involved with investing in the Pfandbriefe
may (i) affect the ability of the Issuer to fulfill its obligations under Pfandbriefe issued under the
Programme and/or (ii) lead to a volatility and/or decrease in the market value of the relevant Series of
Pfandbriefe whereby the market value falls short of the expectations (financial or otherwise) of an investor
upon making an investment in such Pfandbriefe.

The assessment of risks associated with a particular Series of Pfandbriefe may be different depending on
various factors. In particular, the assessment of risk on a case-by-case basis may be different for investors.

Potential investors should consider two main categories of risks, I. "Risks Relating to the Pfandbriefe"
which include 1. "General Risks relating to the Pfandbriefe"; 2. "General Risks relating to Changes in
Market Conditions"; and 3. "Risks relating to specific Product Categories", and II. "Risks Relating to the
Issuer":

I. Risks relating to the Pfandbriefe

1. General Risks relating to the Pfandbriefe

General:                               An investment in the Pfandbriefe entails certain risks, which vary
                                       depending on the specification and type or structure of the
                                       Pfandbriefe. An investment in the Pfandbriefe is only suitable for
                                       potential investors who (i) have the requisite knowledge and
                                       experience in financial and business matters to evaluate the merits
                                       and risks of an investment in the Pfandbriefe and the information
                                       contained in this Base Prospectus or any applicable supplement
                                       thereto; (ii) have access to, and knowledge of, appropriate
                                       analytical tools to evaluate such merits and risks in the context of
                                       the potential investor's particular financial situation and to
                                       evaluate the impact the Pfandbriefe will have on their overall
                                       investment portfolio; (iii) understand thoroughly the terms of the
                                       relevant Pfandbriefe and are familiar with the behaviour of the
                                       financial markets; (iv) are capable of bearing the economic risk of
                                       an investment in the Pfandbriefe until the maturity of the
                                       Pfandbriefe; and (v) recognise that it may not be possible to
                                       dispose of the Pfandbriefe for a substantial period of time, if at all
                                             -4-


                             before maturity.

Interest Rate Risk:          The interest rate risk is one of the central risks of interest-bearing
                             Pfandbriefe. The interest rate level on the money and capital
                             markets may fluctuate on a daily basis and cause the value of the
                             Pfandbriefe to change on a daily basis. The interest rate risk is a
                             result of the uncertainty with respect to future changes of the
                             level of the current interest rate on the capital market (the
                             "Market Interest Rate"). In particular, holders of Fixed Rate
                             Pfandbriefe are exposed to an interest rate risk that could result in
                             a diminution in value if the level of the Market Interest Rate
                             increases. In general, the effects of this risk increase as the
                             Market Interest Rates increase.

Credit Risk:                 Any person who purchases the Pfandbriefe is relying upon the
                             creditworthiness of the Issuer and has no rights against any other
                             person. Holders of Pfandbriefe (each a "Holder" and, together,
                             the "Holders") are subject to the risk of a partial or total failure of
                             the Issuer to make interest and/or redemption payments that the
                             Issuer is obliged to make under the Pfandbriefe. The worse the
                             creditworthiness of the Issuer, the higher the risk of loss.

Spread Risk:                 Spread risk is defined as risk that quotations of financial
                             instruments deviate more or less from the general market. Hence,
                             spreads combine components that reflect creditworthiness as well
                             as liquidity aspects. The spread is the margin, which the Issuer
                             pays the investor for taking a risk. Spreads are added as margins
                             to the current interest rate (without risk).

                             Factors influencing the Spread include, among other things, the
                             creditworthiness and rating of the Issuer, the value of assets in the
                             cover pool, probability of default, recovery rate and the remaining
                             term to maturity of the Pfandbrief. The liquidity situation, the
                             general level of interest rates, overall economic developments,
                             and the currency, in which the relevant obligation is denominated
                             may also have a negative effect.

                             Holders are exposed to the risk that the Spread widens which
                             results in a decrease in the price of the Pfandbriefe.

Rating of the Pfandbriefe:   A rating of Pfandbriefe, if any, may not adequately reflect all
                             risks of the investment in such Pfandbriefe. Equally, ratings may
                             be suspended, downgraded or withdrawn. Such suspension,
                             downgrading or withdrawal may have an adverse effect on the
                             market value and trading price of the Pfandbriefe. A credit rating
                             is not a recommendation to buy, sell or hold securities and may
                             be revised or withdrawn by a rating agency at any time.

Reinvestment Risk:           Holders may be exposed to risks connected to the reinvestment of
                             cash resources freed from any Pfandbrief. The return the Holder
                             will receive from a Pfandbrief depends not only on the price and
                             the nominal interest rate of the Pfandbrief but also on whether or
                             not the interest received during the term of the Pfandbrief can be
                             reinvested at the same or a higher interest rate than the rate
                             provided for in the Pfandbrief. The risk that the general Market
                             Interest Rate falls below the interest rate of the Pfandbrief during
                                             -5-


                             its term is generally called reinvestment risk. The extent of the
                             reinvestment risk depends on the individual features of the
                             relevant Pfandbrief.

Inflation Risk:              The inflation risk is the risk of future money depreciation. The
                             real yield from an investment is reduced by inflation. The higher
                             the rate of inflation, the lower the real yield on a Pfandbrief. If the
                             inflation rate is equal to or higher than the nominal yield, the real
                             yield is zero or even negative.

Purchase on Credit – Debt    If a loan is used to finance the acquisition of the Pfandbriefe by a
Financing:                   Holder and the Pfandbriefe subsequently go into default, or if the
                             trading price diminishes significantly, the Holder may not only
                             have to face a potential loss on its investment, but it will also
                             have to repay the loan and pay interest thereon. A loan may
                             significantly increase the risk of a loss. Potential investors should
                             not assume that they will at all times be able to repay a loan or
                             pay interest thereon. Instead, potential investors should assess
                             their financial situation prior to an investment, as to whether they
                             are able to pay interest on the loan, repay the loan on demand,
                             and contemplate that they may suffer losses.

Transaction Costs/Charges:   When Pfandbriefe are purchased or sold, several types of
                             incidental costs (including transaction fees and commissions) are
                             incurred in addition to the purchase or sale price of the
                             Pfandbrief. These incidental costs may significantly reduce or
                             eliminate any profit from holding the Pfandbriefe. Credit
                             institutions as a rule charge commissions which are either fixed
                             minimum commissions or pro-rata commissions, depending on
                             the order value. To the extent that additional – domestic or
                             foreign – parties are involved in the execution of an order,
                             including but not limited to domestic dealers or brokers in foreign
                             markets, Holders may also be charged for the brokerage fees,
                             commissions and other fees and expenses of such parties (third
                             party costs).

Change of Law:               The Terms and Conditions of the Pfandbriefe will be governed by
                             German law. No assurance can be given as to the impact of any
                             possible judicial decision or change to German law (or law
                             applicable in Germany), or administrative practice after the date
                             of this Base Prospectus.

Taxation:                    Potential investors should be aware that they may be required to
                             pay taxes or other documentary charges or duties in accordance
                             with the laws and practices of the country where the Pfandbriefe
                             are transferred or other jurisdictions. In some jurisdictions, no
                             official statements of the tax authorities or court decisions may be
                             available for innovative financial instruments. Potential investors
                             are advised not to rely upon the tax summary contained in this
                             document and/or in the Final Terms but to ask for their own tax
                             adviser's advice on their individual taxation with respect to the
                             acquisition, sale and redemption of the Pfandbriefe. Only these
                             advisors are in a position to duly consider the specific situation of
                             the potential investor. The afore-mentioned individual tax
                             treatment of the Pfandbriefe with regard to any potential investor
                             may have an adverse impact on the return which any such
                                                  -6-


                                  potential investor may receive under the Pfandbriefe.

No gross-up of the Pfandbriefe:   All payments made by the Issuer in respect of the Pfandbriefe
                                  shall be made subject to any tax, duty, withholding or other
                                  payment which may be required to be made, paid, withheld or
                                  deducted. Holders will not be entitled to receive grossed-up
                                  amounts to compensate for any such tax, duty, withholding or
                                  other payment. Hence, any such deduction will decrease the
                                  return on the Pfandbriefe.

FATCA:                            With respect to Pfandbriefe issued after 31 December 2012 by the
                                  Issuer, the Issuer may, under certain circumstances, be required
                                  pursuant to Sections 1471 through 1474 of the U.S. Internal
                                  Revenue Code of 1986, as amended and the regulations
                                  promulgated thereunder ("FATCA") to withhold U.S. tax at a rate
                                  of 30.00 per cent. on all or a portion of payments of principal and
                                  interest which are treated as "passthru payments" made to foreign
                                  financial institutions unless the payee foreign financial institution
                                  agrees, among other things, to disclose the identity of certain U.S.
                                  account holders at the institution (or the institution’s affiliates)
                                  and to annually report certain information about such accounts.

                                  Guidance issued by the U.S. Internal Revenue Service indicates
                                  that with respect to bonds that are not outstanding on
                                  1 January 2013, FATCA withholding tax of 30.00 per cent. will
                                  apply to foreign passthru payments made after 31 December
                                  2016.

                                  If applicable, FATCA will be addressed in the relevant Final
                                  Terms with respect to Pfandbriefe issued after 31 December
                                  2012. If an amount in respect of U.S. withholding tax were to be
                                  deducted or withheld from interest, principal or other payments
                                  on the Pfandbriefe as a result of a holder’s failure to comply with
                                  FATCA, none of the Issuer, any paying agent or any other person
                                  would pursuant to the terms and conditions of the Pfandbriefe be
                                  required to pay additional amounts as a result of the deduction or
                                  withholding of such tax.

Independent Review and            Each potential investor must determine, based on its own
Advice:                           independent review and such professional advice as it deems
                                  appropriate under the circumstances, that its acquisition of the
                                  Pfandbriefe is fully consistent with its (or if it is acquiring the
                                  Pfandbriefe in a fiduciary capacity, the beneficiary's) financial
                                  needs, objectives and condition, complies and is fully consistent
                                  with all investment policies, guidelines and restrictions applicable
                                  to it (whether acquiring the Pfandbriefe as principal or in a
                                  fiduciary capacity) and is a fit, proper and suitable investment for
                                  it (or if it is acquiring the Pfandbriefe in a fiduciary capacity, for
                                  the beneficiary), notwithstanding the clear and substantial risks
                                  inherent in investing in or holding the Pfandbriefe. The Issuer
                                  disclaims any responsibility to advise potential investors of any
                                  matters arising under the law of the country in which they reside
                                  that may affect the purchase of, or holding of, or the receipt of
                                  payments or deliveries on the Pfandbriefe. If a potential investor
                                  does not inform itself in an appropriate manner with regard to an
                                  investment in the Pfandbriefe, the investor's risks disadvantages
                                                 -7-


                                 in the context of its investment.

Settlement via Clearstream       Pfandbriefe issued under the Programme may be represented by
Banking AG, Frankfurt am         one or more Global Note(s). Such Global Note(s) will be
Main:                            deposited with Clearstream Frankfurt. Holders will not be entitled
                                 to receive definitive Pfandbriefe. While the Pfandbriefe are
                                 represented by one or more Global Note(s), Holders will be able
                                 to trade their beneficial interests only through Clearstream
                                 Frankfurt.

                                 While the Pfandbriefe are represented by one or more Global
                                 Note(s), the Issuer will discharge its payment obligations under
                                 the Pfandbriefe by making payments to Clearstream Frankfurt for
                                 distribution to their account holders. A holder of a beneficial
                                 interest in a Global Note must rely on the procedures of
                                 Clearstream Frankfurt to receive payments under the relevant
                                 Pfandbriefe. The Issuer has no responsibility or liability for the
                                 records relating to, or payments made in respect of, beneficial
                                 interests in the Global Note(s).

Expansion of the spread          In special market situations, where the Issuer is completely
between bid and offer prices:    unable to conclude hedging transactions, or where such
                                 transactions are very difficult to conclude, the spread between the
                                 bid and offer prices which may be quoted by the Issuer may be
                                 temporarily expanded, in order to limit the economic risks to the
                                 Issuer. Thus, Holders selling their Pfandbriefe on a stock
                                 exchange or on the over-the-counter market may be doing so at a
                                 price that is substantially lower than the actual value of the
                                 Pfandbriefe at the time of sale.

No Holder’s right to demand      The Terms and Conditions of the Pfandbriefe do not provide for
early redemption:                any right of early redemption. Hence, Holders have no right to
                                 demand early redemption of the Pfandbriefe during the term of
                                 the Pfandbriefe. The realisation of any economic value in the
                                 Pfandbriefe (or portion thereof) is only possible by way of their
                                 sale.

                                 Sale of the Pfandbriefe is contingent on the availability of market
                                 participants willing to purchase the Pfandbriefe at a
                                 commensurate price. If no such willing purchasers are available,
                                 the value of the Pfandbriefe cannot be realised. The issue of the
                                 Pfandbriefe entails no obligation on the part of the Issuer vis-à-vis
                                 the Holders to ensure market equilibrium or to repurchase the
                                 Pfandbriefe.

2. General Risks relating to Changes in Market Conditions

Market Illiquidity:              There can be no assurance as to how the Pfandbriefe will trade in
                                 the secondary market or whether such market will be liquid or
                                 illiquid or that there will be a market at all. If the Pfandbriefe are
                                 not traded on any securities exchange, pricing information for the
                                 Pfandbriefe may be more difficult to obtain and the liquidity and
                                 market prices of the Pfandbriefe may be adversely affected. The
                                 liquidity of the Pfandbriefe may also be affected by restrictions
                                 on offers and sales of the securities in some jurisdictions. The
                                 more limited the secondary market is, the more difficult it may be
                                                   -8-


                                   for the Holders to realise value for the Pfandbriefe prior to the
                                   exercise, expiration or maturity date.

Market Value of Pfandbriefe:       The market value of Pfandbriefe may be negatively affected by a
                                   number of factors including, but not limited to, market interest
                                   and yield rates, market liquidity, the quality of the cover pool and
                                   the time remaining to the maturity date.

                                   The value of Pfandbriefe also depends on a number of interrelated
                                   factors, including economic, financial and political events in
                                   Germany or elsewhere, including factors affecting capital markets
                                   generally.

Market price risk – Historic       The historic price of a Pfandbrief should not be taken as an
performance:                       indicator of future performance of such Pfandbrief. It is not
                                   foreseeable whether the market price of a Pfandbrief will rise or
                                   fall. The Issuer gives no guarantee that the spread between
                                   purchase and selling prices is within a certain range or remains
                                   constant.

3. Risks relating to specific Product Categories

Fixed Rate Pfandbriefe:            A holder of a Fixed Rate Pfandbrief is exposed to the risk that the
                                   price of such Pfandbrief falls as a result of changes in the Market
                                   Interest Rate. While the nominal interest rate of a Fixed Rate
                                   Pfandbrief is fixed during the life of such Pfandbrief, the Market
                                   Interest Rate typically changes on a daily basis. As the Market
                                   Interest Rate changes, the price of a Fixed Rate Pfandbrief also
                                   changes. If the Market Interest Rate increases, the price of a
                                   Fixed Rate Pfandbrief typically falls, until the yield of such
                                   Pfandbrief is approximately equal to the Market Interest Rate. If
                                   the Market Interest Rate falls, the price of a Fixed Rate Pfandbrief
                                   typically increases, until the yield of such Pfandbrief is
                                   approximately equal to the Market Interest Rate. Changes in the
                                   Market Interest Rate are in particular relevant for Holders who
                                   wish to sell the Pfandbriefe prior to the maturity date of the
                                   Pfandbriefe.

Floating Rate Pfandbriefe:         A holder of a Floating Rate Pfandbrief is exposed to the risk of
                                   fluctuating interest rate levels and uncertain interest income.
                                   Fluctuating interest rate levels make it impossible to determine
                                   the yield of Floating Rate Pfandbriefe in advance.

Zero Coupon Pfandbriefe:           Zero Coupon Pfandbriefe do not pay current interest but are
                                   typically issued at a discount from their nominal value. Instead of
                                   periodical interest payments, the difference between the
                                   redemption price and the Issue Price constitutes interest income
                                   until maturity and reflects the Market Interest Rate. A holder of a
                                   Zero Coupon Pfandbrief is exposed to the risk that the price of
                                   such Pfandbrief falls as a result of changes in the Market Interest
                                   Rate. Prices of Zero Coupon Pfandbriefe are more volatile than
                                   prices of Fixed Rate Pfandbriefe and are likely to respond to a
                                   greater degree to Market Interest Rate changes than interest
                                   bearing Pfandbriefe with a similar maturity.
                                                  -9-


II. Risks relating to the Issuer

Market Risk:                       Market risk is the risk of potential loss due to adverse changes
                                   of market prices, or of underlying market parameters affecting
                                   market prices.

                                   Interest rate risk in the banking book (Bankbuch) constitutes
                                   the major source of market risk for the Issuer. Investors should
                                   be aware of the fact that Market Interest Rates may change at
                                   any time and are not predictable.

                                   Changes of market parameters may negatively influence the
                                   periodical results as well as the net present value of the Issuer's
                                   portfolio.

Liquidity Risk:                    Liquidity risk is the risk of financial loss or decrease in
                                   earnings as a consequence of not meeting, at all or in full,
                                   present and future payment obligations when they become due,
                                   in a timely manner and at reasonable cost. The liquidity risk
                                   may also materialise as a result of a limited possibility of
                                   refinancing in the market, of increased costs of refinancing or
                                   of only being able to wind up existing positions to the own
                                   disadvantage.

                                   The Issuer’s principal financing source consists of client
                                   deposits which may be withdrawn on short call. As a
                                   consequence, its principal source of liquidity risk consists in
                                   the unexpected high outflow of customer deposits. Liquidity
                                   risk may result in the financial condition of the Issuer to be
                                   negatively affected, if (i) the Issuer is not able to meet its
                                   liabilities due to its assets not being able to be liquidated or
                                   adequate funding not being generated (funding liquidity risk);
                                   or (ii) due to insufficient market depth or other market
                                   disruptions, existing positions may not be liquidated without
                                   having significant impact on the market price (market liquidity
                                   risk).

Credit Risk:                       Credit risk is the risk of potential loss resulting from the
                                   deterioration of the creditworthiness or threat of default and/ or
                                   insolvency of debtors (including bond issuers) or
                                   counterparties and includes settlement risk.

                                   Credit risk substantiates as follows: Credit / migration risk and
                                   the risk of default refers to the risk of loss due to negative
                                   changes in the creditworthiness or the default of a debtor
                                   (including bond issuers) or of business counterparties.

                                   Credit risk refers to the risk in connection with negative
                                   changes in the creditworthiness of debtors and default, notably
                                   in the event of non-repayment of obligations towards the
                                   Issuer.

                                   Country risk means the risk of loss by the Issuer attributable to
                                   events in a specific country (or group of countries), such as
                                   political or social unrest, nationalisation and non-recognition
                                   of foreign debt by governments. The country risk also consists
                                    - 10 -


                      of transfer, conversion, devaluation or invalidation risk as well
                      as the risk of loss by the Issuer due to currency exchange
                      restrictions.

Operational Risks:    Operational Risks are defined as the risks of losses resulting
                      from insufficient or failing internal procedures, people or
                      systems (e.g. failure of data processing systems, fraud, human
                      error, failed processes, structural weaknesses, insufficient
                      monitoring) or which may be caused by external influences
                      (criminal acts, natural disasters etc.). In case of the Issuer, the
                      definition of operational risks includes legal risk, which results
                      from contractual agreements or the general legal environment.

Other Risks:          Within its business activities the Issuer is also exposed to
                      reputational risk and model risk. Reputational risk can be
                      described as the risk of being exposed to losses in case of
                      decreasing faith of clients and counterparts. Model risks
                      represent a theoretical risk which can occur in case of
                      substantially deviating observed figures compared to predicted
                      values.

Risk Concentration:   Due to the business strategy with a focus on retail business the
                      Issuer has deliberately decided to take certain concentrations
                      on product level in the retail segment.

                      The Issuer has defined specific product features and setting of
                      maximum amounts for limits, exposures and maturities aiming
                      at managing concentrations within the retail portfolio.

                      With respect to the institutional business which includes the
                      Issuer’s fixed income investments, mainly government and
                      government-related bonds, Pfandbriefe and other covered
                      bonds, securitisations such as Asset Backed Securities ("ABS")
                      and Mortgage Backed Securities ("MBS") as well as its short-
                      term liquidity management operations,         investments in
                      Germany play the most important role.

                      Engagements with governments and government related
                      entities in Greece, Spain, Italy and Hungary have been
                      decreased during 2011 by 62% based on nominal values to less
                      than nominal Euro 0.6 billion as at 31 December 2011. The
                      Issuer does not hold any corresponding investments with
                      Portugal and Ireland.

                      Concentration risks exist also due to the concentration of
                      transactions with certain counterparties, in particular within
                      ING Group.

                      The commercial banking activities mainly focus on Germany
                      followed by exposures in non-EU countries. The latter relates
                      mainly to structured export finance activities which are
                      covered by governmental Export Credit Agencies (e.g. Hermes
                      Cover).
                                                - 11 -


Risks relating to increased       As a response to the crisis in the financial markets most
Regulation in the Financial       jurisdictions have imposed increased regulations and
Markets:                          implemented measures to prevent a future financial crisis or
                                  diminish its effects; such implemented or planned regulations
                                  and measures may lead to additional costs.

                                  Furthermore, the issued Basel III rules set out higher and
                                  better-quality capital requirements and also introduce two
                                  global minimum standards for funding liquidity: The Liquidity
                                  Coverage Ratio and the Net Stable Funding Ratio. These rules
                                  may result in an increasing demand in equity and liquidity
                                  and/or additional costs and may affect the Issuer’s profitability.

B.    General Information about the Programme

Issuer:                           ING-DiBa AG

Arranger:                         Commerzbank Aktiengesellschaft

Dealers:                          The Issuer may appoint dealers in respect of one or more
                                  Tranches from time to time. References in this Base Prospectus to
                                  "Dealers" are to all dealers appointed in respect of one or more
                                  Tranches.

Fiscal Agent:                     ING-DiBa AG

Paying Agents:                    ING-DiBa AG and other institutions, all as indicated in the
                                  applicable Final Terms

Programme Amount:                 Euro 10,000,000,000

Distribution:                     Pfandbriefe may be distributed by way of public or private
                                  placements and, in each case, on a syndicated or non-syndicated
                                  basis.


C.    Summary of the "Terms and Conditions of the Pfandbriefe and Related Information"

1. General Information

Method of Issue:                  Pfandbriefe will be issued on a continuous basis in Series (each a
                                  "Series"), and each Series may be issued in one or more
                                  tranche(s) (each a "Tranche") consisting of Pfandbriefe which
                                  are identical in all respects, but having different issue dates,
                                  interest commencement dates, issue prices and dates for first
                                  interest payments. The specific terms of each Tranche will be set
                                  forth in the applicable Final Terms.

Currencies:                       Pfandbriefe will be issued in Euro only.

Specified Denominations           Pfandbriefe will be issued in such denominations as may be
of Pfandbriefe:                   determined by the Issuer and the relevant Dealer(s) and as
                                  specified in the applicable Final Terms, save that Pfandbriefe
                                  which are to be admitted to trading on a regulated market within
                                  the European Economic Area or offered to the public in a
                                  Member State of the European Economic Area in circumstances
                                - 12 -


                  which require the publication of a prospectus under the
                  Prospectus Directive must have a Specified Denomination of at
                  least Euro 100,000.

Maturities:       Such maturities as may be agreed between the Issuer and the
                  relevant Dealer(s) and as specified in the applicable Final Terms,
                  subject to such minimum or maximum maturities as may be
                  allowed or required from time to time by the relevant central bank
                  (or equivalent body) or any laws or regulations applicable to the
                  Issuer or the Pfandbriefe.

Issue Price:      Pfandbriefe may be issued at an issue price which is at par or at a
                  discount to, or premium over, par.

Form and type     Pfandbriefe may be issued in bearer form and in classical global
of Pfandbriefe:   note form ("CGN") only. No definitive notes will be issued.

                  Pfandbriefe to which U.S. Treasury Regulation §1.163-5(c) (2) (i)
                  (C) (the "TEFRA C Rules") applies ("TEFRA C Pfandbriefe")
                  will be represented by a permanent global note in bearer form,
                  without coupons ("Permanent Global Note").

                  Pfandbriefe to which U.S. Treasury Regulation §1.163-5 (c) (2)
                  (i) (D) (the "TEFRA D Rules") applies ("TEFRA D
                  Pfandbriefe") will always be represented initially by a temporary
                  global note ("Temporary Global Note") which will be
                  exchanged for Pfandbriefe represented by one or more Permanent
                  Global Note(s) not earlier than 40 days after the completion of
                  distribution of the Pfandbriefe comprising the relevant Tranche
                  upon certification of non U.S.-beneficial ownership in the form
                  available from time to time at the specified office of ING-DiBa
                  AG (when acting in such capacity) as Fiscal Agent.

                  Pfandbriefe to which neither the TEFRA C Rules nor the TEFRA
                  D Rules apply will be represented by a Permanent Global Note.

                  Global Notes will be deposited on or prior to the issue date with
                  Clearstream Frankfurt.

                  The Pfandbriefe will be issued as Mortgage Pfandbriefe
                  (Hypothekenpfandbriefe) only.

                  Mortgage Pfandbriefe are secured or "covered" by separate pools
                  of mortgage loans. The Pfandbrief operations of the Issuer are
                  subject to the German Pfandbrief Act (Pfandbriefgesetz) of
                  22 May 2005, which has come into force on 19 July 2005 and was
                  lastly amended on 9 December 2010.

Redemption:       Pfandbriefe cannot be redeemed prior to their stated maturity.

Taxation:         All amounts payable in respect of the Pfandbriefe will be made
                  without withholding or deduction for or on account of any present
                  or future taxes or duties of whatever nature imposed or levied by
                  way of withholding or deduction at source by or on behalf of the
                  Federal Republic of Germany, or the United States of America or
                  any political subdivision or any authority thereof or therein
                                                - 13 -


                                  having power to tax unless such withholding or deduction is
                                  required by law or pursuant to any agreement between the Issuer
                                  and the United States of America or any authority thereof.

Status of the Pfandbriefe:        The obligations under the Pfandbriefe constitute unsubordinated
                                  obligations of the Issuer ranking pari passu among themselves.
                                  The Pfandbriefe are covered in accordance with the German
                                  Pfandbrief Act (Pfandbriefgesetz) and rank at least pari passu
                                  with all other unsecured and unsubordinated present and future
                                  obligations of the Issuer under Mortgage Pfandbriefe.

No Early Redemption:              Neither the Issuer nor any Holder shall be entitled to an early
                                  redemption of the Pfandbriefe..

Listing:                          Application has been made to admit the Pfandbriefe to be issued
                                  under the Programme on the regulated market (regulierter Markt)
                                  of the Frankfurt Stock Exchange. Pfandbriefe may, however, be
                                  admitted to trading and listed on such other or further stock
                                  exchange(s), or not be listed on any stock exchange, as specified
                                  in the applicable Final Terms.

Governing Law:                    German law.

Selling Restrictions:             There will be specific restrictions on the offer and sale of
                                  Pfandbriefe and the distribution of offering materials in the
                                  United States of America, United Kingdom and such jurisdictions
                                  in which Directive 2003/71/EC, as amended from time to time,
                                  (the "Prospectus Directive") has been implemented to become
                                  national law and such other restrictions as may be required under
                                  applicable law in connection with the offering and sale of a
                                  particular Series of Pfandbriefe.

Place of Performance and          Place of performance for the obligations under the Pfandbriefe is
Jurisdiction:                     Frankfurt am Main.

                                  Exclusive place of jurisdiction for any legal proceedings arising
                                  under the Pfandbriefe is Frankfurt am Main.

Language of the Conditions:       The Final Terms will indicate whether the Conditions of the
                                  relevant Series of Pfandbriefe will be in German only, English
                                  only, English and German (English prevailing) or German and
                                  English (German prevailing).

II. Specific Product Categories

Fixed Rate Pfandbriefe:           Fixed Rate Pfandbriefe will bear interest at a fixed rate payable
                                  on such basis as may be agreed between the Issuer and the
                                  relevant Dealer(s).

Floating Rate Pfandbriefe:        Floating Rate Pfandbriefe will bear interest on such basis as may
                                  be agreed between the Issuer and the relevant Dealer(s). The
                                  Margin, if any, relating to such variable rate will be agreed
                                  between the Issuer and the relevant Dealer(s) for each Series of
                                  Floating Rate Pfandbriefe.

                                  Interest periods for Floating Rate Pfandbriefe will be one, two,
                                                  - 14 -


                                  three, six or twelve months or such other period(s) as may be
                                  agreed between the Issuer and the relevant Dealer(s).

Zero Coupon Pfandbriefe:          Zero Coupon Pfandbriefe will be offered and sold at a discount to
                                  their nominal value and will not bear interest other than in the
                                  case of late payment.

D.   Summary of the "Description of the Issuer"

General Information:              ING-DiBa AG (the "Issuer" and, together with its consolidated
                                  subsidiaries, "ING-DiBa Group") acts under its legal and
                                  commercial name "ING-DiBa AG". The Issuer's predecessor,
                                  the "Bankhaus Lunk und Co. GmbH" was incorporated on 22
                                  April 1955 and was granted the permission to commence its
                                  business activities under the laws of the Federal Republic of
                                  Germany in April 1955.

                                  On 31 August 1956, its legal name changed to "Kreditbank
                                  Hagen GmbH". After the place of business was transfered from
                                  Hagen to Frankfurt, its corporate form was changed to a stock
                                  corporation with the legal name "Bank für Sparanlagen und
                                  Vermögensbildung Aktiengesellschaft" on 11 October 1965. It
                                  was registered in the commercial register (Handelsregister) of
                                  the Frankfurt am Main local court on 21 October 1965 under
                                  No. HRB 7727. It began as a specialist financial institution to
                                  invest employer contributions to employees' tax-deductible
                                  savings schemes. Four years later, it began offering mortgage
                                  financing.

                                  On 20 September 1976, Bank für Sparanlagen und
                                  Vermögensbildung Aktiengesellschaft changed its legal name
                                  to "BSV Bank für Sparanlagen und Vermögensbildung".

                                  On 14 May 1993, the legal name was changed to "Deutsche
                                  Direktbank Aktiengesellschaft" and thereafter to "Allgemeine
                                  Deutsche Direktbank Aktiengesellschaft". Until 1998, the
                                  share capital was fully owned by a union-owned company
                                  called BGAG Beteiligungsgesellschaft der Gewerkschaften AG
                                  (Frankfurt). In the same year, the ING Group bought a 49 per
                                  cent. stake in the Issuer; it acquired full ownership in 2003.
                                  Since 1 July 2005, the Issuer has been operating in the market
                                  under the name "ING-DiBa AG".

                                  On 31 August 2011, the Issuer took over the German
                                  commercial banking business of ING Bank N.V. by legally
                                  integrating the German branch of ING Bank N.V. (ING Bank
                                  N.V., Frankfurt Branch) into ING-DiBa AG.

                                  The Issuer is incorporated as a stock corporation
                                  (Aktiengesellschaft) under the laws of the Federal Republic of
                                  Germany.

                                  The head office is located at Theodor-Heuss-Allee 106, 60486
                                  Frankfurt am Main, Germany. Its telephone number is +49 69
                                  27 222 0.
                                      - 15 -


Overview on principal   The Issuer is a universal bank with a direct bank model for its
business activities:    retail bank part. It offers private customers a wide range of
                        products and services of a retail bank. Commercial customers
                        are offered bespoken financing solutions (including export
                        financing) as well as payment and cash management solutions.
                        The Issuer does not have physical branches. The products are
                        distributed to customers primarily through direct channels, i.e.
                        through online or telephone services or by mail, including
                        electronic mail, or fax. Exceptions are residential mortgage
                        lending, for which the Issuer cooperates with carefully chosen
                        mortgage brokers and commercial banking where relationship
                        managers individually attend to the Issuer’s commercial
                        customers’ needs.
                        The Issuer divides its business activity into the three segments
                        retail customer assets (Retail-Kundenvermögen), retail
                        customer loans (Retail-Kundenkredite) and commercial
                        banking subdivided into the core products as described below:
                        a.      Retail customer assets (Retail-Kundenvermögen)
                        Savings deposits (Spargelder): The Issuer offers standard
                        savings products and special savings products with built-in
                        tiered interest rates (Zinswachstums-Konto) as well as savings
                        bonds and savings schemes within the scope of capital
                        contribution benefits (vermögenswirksame Leistungen). It also
                        offers fixed-term deposits with various terms.
                        Current accounts (Girokonten): The Issuer offers current
                        accounts with the possibility to withdraw cash at no cost from
                        any automated teller machine (ATM) within the Eurozone with
                        a Visa debit card.
                        Securities business (Wertpapiergeschäft): The Issuer offers
                        customers securities accounts with low transaction costs. The
                        assets deposited with the securities accounts include securities,
                        shares in investment funds and exchange traded funds (ETF).
                        b.      Retail customer loans (Retail-Kundenkredite)
                        Mortgage loans (Baufinanzierung): The Issuer offers first-
                        time financing and follow-up financing for retail property
                        owners with five to fifteen years terms as well as financing
                        models in connection with loans granted by KfW
                        (Kreditanstalt für Wiederaufbau). In addition to this, it offers
                        forward loans with a lead time of up to three years by means of
                        which a present interest level may be used for a later follow-up
                        financing. The Issuer finances predominantly owner-occupied
                        properties. Loans for properties that are intended as a capital
                        investment are only granted in exceptional cases and under
                        very specific conditions. The residential mortgage loan
                        business takes place through direct channels; in addition, the
                        Issuer works with carefully chosen brokers.
                        Consumer loans (Verbraucherkredite): The Issuer offers
                        tailor-made consumer loans. In addition to the traditional loans
                        based on regular instalments, it offers flexible lines of loans
                        that can be drawn daily based on a pre-approved limit. Special
                                              - 16 -


                                consumer loan offers for the acquisition of automobiles and the
                                acquisition or modification of privately owned homes round
                                off the product range.
                                c.     Commercial banking
                                The segment commercial banking combines the Issuer’s
                                banking business with commercial clients. Clients comprise
                                medium-to-large/large      corporations      and    commercial
                                enterprises as well as other international customers of the ING
                                Group that have a branch in Germany.
                                Apart from core banking services such as lending, the Issuer
                                also offers inter alia short to long term export financing.
                                Furthermore, in the area of financial markets, the Issuer offers
                                financial products for hedging currency and interest rate risks
                                as well as payment and cash management solutions.
Organisational Structure:       The subscribed capital of the Issuer is fully owned by ING
                                Deutschland GmbH (Frankfurt am Main). The Issuer is part of
                                ING Direct N.V., the international direct banking group of the
                                Netherlands-based ING Groep N.V. (together with its
                                consolidated subsidiaries, "ING Group"), and a wholly owned
                                subsidiary of ING Bank N.V.

Trend Information:              There has been no material adverse change in the prospects of
                                the Issuer since the date of its last published audited
                                consolidated financial statements as at 31 December 2011.
Statutory Auditors:             For the financial years ended 31 December 2010 and
                                31 December 2011, the statutory auditor of the Issuer was
                                Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
                                Stuttgart,    office    Eschborn/Frankfurt      am       Main,
                                Mergenthalerallee 3-5, 65760 Eschborn, Germany ("Ernst &
                                Young"). Ernst & Young is a member of the German chamber
                                of public accountants (Wirtschaftsprüferkammer), Berlin.
Major Shareholders:             As of the date of this Base Prospectus, the subscribed capital
                                of the Issuer is EUR 100,000,000 divided into 100,000,000
                                shares. The share capital of the Issuer is fully owned by ING
                                Deutschland GmbH (Frankfurt am Main).
Historical Financial            According to the consolidated financial statements in
Information:                    accordance with IFRS, as of 31 December 2011, the total
                                assets of ING-DiBa Group amount to EUR 109.5 billion and
                                the profit before tax is at EUR 660 million for the financial
                                year ended 31 December 2011.
Significant Change in the       There has been no significant change in ING-DiBa Group’s
Issuer’s Financial or Trading   financial or trading position since the record date of the last
Position:                       audited consolidated financial statements of ING-DiBa Group
                                as at 31 December 2011.
                                                  - 17 -


                                                                           Teil A.II. des Basisprospekts
                                                                   Zusammenfassung des Basisprospekts
                                                                          (German Language Version)

                          ZUSAMMENFASSUNG DES BASISPROSPEKTS
                              (GERMAN LANGUAGE VERSION)

Dies ist eine Zusammenfassung (die "Zusammenfassung") der wesentlichen mit der Emittentin und den
unter dem Programm zu begebenden Pfandbriefen verbundenen Merkmale und Risiken. Die
Zusammenfassung ist als Einleitung zum Basisprospekt zu verstehen. Der Anleger sollte jede Entscheidung
zur Anlage in die Pfandbriefe auf die Prüfung des gesamten Basisprospekts einschließlich etwaiger
Nachträge hierzu und der maßgeblichen Endgültigen Bedingungen stützen. Wenn vor einem Gericht
Ansprüche aufgrund der in diesem Basisprospekt, etwaigen Nachträgen oder den Endgültigen Bedingungen
enthaltenen Informationen geltend gemacht werden, könnte der als Kläger auftretende Anleger in
Anwendung der einzelstaatlichen Rechtsvorschriften des jeweiligen Gerichts die Kosten für die
Übersetzung des Basisprospekts, etwaiger Nachträge und der maßgeblichen Endgültigen Bestimmungen
vor Prozessbeginn zu tragen haben. Die Emittentin, die die Zusammenfassung einschließlich einer
Übersetzung davon vorgelegt hat, kann haftbar gemacht werden, jedoch nur in dem Fall, dass die
Zusammenfassung irreführend, unrichtig oder widersprüchlich ist, wenn sie zusammen mit anderen Teilen
dieses Basisprospekts gelesen wird.

A.    Zusammenfassung der "Risikofaktoren"

Ein Kauf der Pfandbriefe birgt gewisse Risiken betreffend die Emittentin und die maßgebliche Serie der
Pfandbriefe in sich. Potentielle Investoren sollten sich der Tatsache bewusst sein, dass die mit dem Kauf
der Pfandbriefe verbundenen Risiken möglicherweise (i) einen Einfluss auf die Fähigkeit der Emittentin zur
Erfüllung ihrer Pflichten gemäß den im Rahmen des Programms ausgegebenen Pfandbriefen haben
und/oder (ii) zu einer Volatilität und/oder Minderung des Marktwertes der maßgeblichen Serie der
Pfandbriefe führen dergestalt, dass der Marktwert hinter den Erwartungen (finanzieller oder sonstiger Art)
der Investoren nach dem Kauf der Pfandbriefe zurückbleibt.

Die Einschätzung der mit einer bestimmten Serie von Pfandbriefen verbundenen Risiken kann aufgrund
verschiedener Faktoren unterschiedlich ausfallen. Insbesondere kann sich im Einzelfall eine
unterschiedliche Risikoeinschätzung für Investoren ergeben.

Potentielle Investoren sollten zwei Hauptrisikokategorien, welche nachfolgend zusammengefasst sind,
berücksichtigen:     I.   "Risiken   im     Zusammenhang        mit  den    Pfandbriefen",     welche
1. "Allgemeine Risiken im Zusammenhang mit den Pfandbriefen", 2. "Allgemeine Risiken im
Zusammenhang mit Veränderungen der Marktumstände" und 3. "Risiken im Zusammenhang mit
spezifischen Produktkategorien" umfassen und II. "Risiken im Zusammenhang mit der Emittentin":

I. Risiken im Zusammenhang mit den Pfandbriefen

1. Allgemeine Risiken im Zusammenhang mit den Pfandbriefen

Allgemein:                          Eine Anlage in die Pfandbriefe birgt Risiken, die je nach
                                    Ausführung und Art oder Struktur der Pfandbriefe variieren. Eine
                                    Anlage in Pfandbriefe ist nur für potentielle Investoren geeignet,
                                    die (i) über die erforderlichen Kenntnisse und Erfahrungen im
                                    Finanz- und Geschäftswesen verfügen, um die Vorteile und
                                    Risiken einer Anlage in die Pfandbriefe und die Informationen,
                                    die im Basisprospekt oder etwaigen Nachträgen dazu enthalten
                                    sind, einschätzen zu können, (ii) über Zugang zu und Kenntnis
                                    von angemessenen Analyseinstrumenten zur Bewertung dieser
                                    Vorteile und Risiken vor dem Hintergrund der individuellen
                                    Finanzlage des Anlegers sowie zur Einschätzung der
                                        - 18 -


                          Auswirkungen einer Anlage in die Pfandbriefe auf das
                          Gesamtportfolio des potentiellen Investors verfügen, (iii) die
                          Bedingungen der jeweiligen Pfandbriefe gänzlich verstanden
                          haben und mit dem Verhalten der Finanzmärkte vertraut sind, (iv)
                          das wirtschaftliche Risiko einer Anlage in die Pfandbriefe bis zu
                          deren Fälligkeit tragen können und (v) zur Kenntnis nehmen, dass
                          eine Veräußerung der Pfandbriefe über einen erheblichen
                          Zeitraum, sogar bis zur Fälligkeit, eventuell nicht möglich ist.

Zinsrisiko:               Das Zinsrisiko ist eines der zentralen Risiken verzinslicher
                          Pfandbriefe. Das Zinsniveau an den Geld- und Kapitalmärkten
                          kann täglichen Schwankungen unterliegen, wodurch sich der
                          Wert der Pfandbriefe täglich verändern kann. Das Zinsrisiko
                          resultiert aus der Unsicherheit im Hinblick auf die künftige
                          Entwicklung des Niveaus des aktuellen Zinssatzes des
                          Kapitalmarktes (der "Marktzinssatz"). Insbesondere Gläubiger
                          Festverzinslicher Pfandbriefe sind einem Zinsrisiko ausgesetzt,
                          das im Falle eines Anstiegs des Niveaus des Marktzinssatzes
                          einen Kursrückgang der Pfandbriefe zur Folge haben kann. Im
                          Allgemeinen verstärken sich die Auswirkungen dieses Risikos
                          mit steigendem Marktzinssatz.

Kreditrisiko:             Jede Person, die Pfandbriefe kauft, verlässt sich auf die
                          Kreditwürdigkeit der Emittentin und hat keine Rechte gegen eine
                          andere Person. Gläubiger von Pfandbriefen (jeweils ein
                          "Gläubiger" und zusammen die "Gläubiger") sind dem Risiko
                          ausgesetzt,      dass    die     Emittentin     Zins-     und/oder
                          Tilgungszahlungen, zu denen sie im Zusammenhang mit dem
                          Pfandbrief verpflichtet ist, teilweise oder vollumfänglich nicht
                          leisten kann. Je schlechter die Bonität der Emittentin, desto höher
                          ist das Verlustrisiko.

Spreadrisiko:             Das Spreadrisiko stellt das Risiko dar, dass sich der Kurs eines
                          Finanzinstruments mehr oder weniger stark ändert als der
                          allgemeine Markt. Somit umfasst der Spread (Spanne) sowohl
                          bonitäts- als auch liquiditätsinduzierte Komponenten. Der Spread
                          ist die Marge, die die Emittentin dem Gläubiger als Aufschlag für
                          das übernommene Risiko zahlt. Spreads werden als Aufschläge
                          auf den gegenwärtigen (risikolosen) Zinssatz dargestellt.

                          Zu den Faktoren, die einen Spread beeinflussen, zählen unter
                          anderem die Bonität und das Rating der Emittentin, der Wert der
                          im    Deckungsstock      befindlichen   Vermögenswerte,      die
                          Ausfallwahrscheinlichkeit, die Beitreibungsquote (recovery rate)
                          und die Restlaufzeit des Pfandbriefs. Die Liquiditätslage, das
                          allgemeine Zinsniveau, konjunkturelle Entwicklungen und die
                          Währung, auf die der jeweilige Schuldtitel lautet, können sich
                          ebenfalls negativ auswirken.

                          Für Gläubiger besteht das Risiko einer Ausweitung des Spreads,
                          die einen Kursrückgang der Pfandbriefe zur Folge hat.

Rating der Pfandbriefe:   Ein Rating der Pfandbriefe, falls dieses vorhanden ist, spiegelt
                          möglicherweise nicht sämtliche Risiken einer Anlage in die
                          Pfandbriefe wider. Ebenso können Ratings ausgesetzt,
                          herabgestuft oder zurückgezogen werden. Das Aussetzen,
                                             - 19 -


                               Herabstufen oder die Rücknahme eines Ratings können den
                               Marktwert und den Kurs der Pfandbriefe beeinträchtigen. Ein
                               Rating stellt keine Empfehlung zum Kauf, Verkauf oder Halten
                               von Wertpapieren dar und kann von der Rating-Agentur jederzeit
                               korrigiert oder zurückgezogen werden.

Wiederanlagerisiko:            Für die Gläubiger bestehen Risiken in Zusammenhang mit der
                               Wiederanlage liquider Mittel, die aus einem Pfandbrief freigesetzt
                               werden. Der Ertrag, den der Gläubiger aus einem Pfandbrief
                               erhält, hängt nicht nur von dem Kurs und der Nominalverzinsung
                               des Pfandbriefs ab, sondern auch davon, ob die während der
                               Laufzeit des Pfandbriefs generierten Zinsen zu einem gleich
                               hohen oder höheren Zinssatz als dem des Pfandbriefs
                               wiederangelegt werden können. Das Risiko, dass der allgemeine
                               Marktzinssatzes während der Laufzeit des Pfandbriefs unter den
                               Zinssatz des Pfandbriefs fällt, wird als Wiederanlagerisiko
                               bezeichnet. Das Ausmaß des Wiederanlagerisikos hängt von den
                               besonderen Merkmalen des jeweiligen Pfandbriefs ab.

Inflationsrisiko:              Das Inflationsrisiko besteht in dem Risiko einer künftigen
                               Verringerung des Geldwertes. Die reale Rendite einer Anlage
                               wird durch Inflation geschmälert. Je höher die Inflationsrate,
                               desto niedriger die reale Rendite eines Pfandbriefs. Entspricht die
                               Inflationsrate der Nominalrendite oder übersteigt sie diese, ist die
                               reale Rendite null oder gar negativ.

Kauf auf Kredit –              Finanziert ein Gläubiger den Erwerb von Pfandbriefen über ein
Fremdfinanzierung:             Darlehen und kommt es in Bezug auf die Pfandbriefe zu einem
                               Zahlungsausfall oder sinkt der Kurs stark, so muss der Gläubiger
                               nicht nur den möglichen Verlust seines Anlagebetrages tragen,
                               sondern auch das Darlehen und die darauf anfallenden Zinsen
                               zurückzahlen. Durch ein Darlehen steigt das Verlustrisiko
                               erheblich. Potentielle Investoren sollten nicht davon ausgehen,
                               dass sie jederzeit die Tilgung des Darlehens oder die Zahlung der
                               darauf anfallenden Zinsen bestreiten können. Vielmehr sollten
                               potentielle Investoren, bevor sie eine Anlage tätigen, ihre
                               Finanzlage dahingehend prüfen, ob sie zur Zahlung der
                               Darlehenszinsen und zur Tilgung des Darlehens in der Lage sind,
                               und sich bewusst machen, dass sie möglicherweise Verluste
                               erleiden.

Transaktionskosten/Gebühren:   Beim Kauf oder Verkauf von Pfandbriefen fallen neben dem
                               Kauf- oder Verkaufspreis des Pfandbriefs unterschiedliche
                               Nebenkosten (u.a. Transaktionsgebühren und Provisionen) an.
                               Diese Nebenkosten können die Erträge aus Pfandbriefen
                               erheblich mindern oder gar aufzehren. Im Allgemeinen berechnen
                               Kreditinstitute Provisionen, die in Abhängigkeit von dem Wert
                               der Order entweder als feste Mindestprovision oder als eine
                               anteilige Provision erhoben werden. Sofern weitere – inländische
                               oder ausländische – Parteien an der Ausführung der Order
                               beteiligt sind, wie etwa inländische Händler oder Broker an
                               ausländischen Märkten, können Gläubigern darüber hinaus
                               Courtagen, Provisionen und sonstige Gebühren dieser Parteien
                               (Fremdkosten) belastet werden.

Gesetzesänderungen:            Die    Emissionsbedingungen       der    Pfandbriefe    unterliegen
                                         - 20 -


                           deutschem Recht. Es kann keine Aussage über die Auswirkungen
                           eventueller Gerichtsentscheidungen oder Änderungen eines
                           Gesetzes (oder des anwendbaren Rechtes in Deutschland) oder
                           der Verwaltungspraxis nach dem Datum dieses Basisprospekts
                           getroffen werden.

Besteuerung:               Potentielle Investoren sollten sich vergegenwärtigen, dass sie
                           gegebenenfalls verpflichtet sind, Steuern oder andere Gebühren
                           oder Abgaben nach Maßgabe der Rechtsordnung und Praktiken
                           desjenigen Landes zu zahlen, in das die Pfandbriefe übertragen
                           werden oder möglicherweise auch nach Maßgabe anderer
                           Rechtsordnungen. In einigen Rechtsordnungen kann es zudem an
                           offiziellen   Stellungnahmen      der     Finanzbehörden      oder
                           Gerichtsentscheidungen       in     Bezug       auf      innovative
                           Finanzinstrumente fehlen. Potentiellen Investoren wird daher
                           geraten, sich nicht auf die in diesem Basisprospekt und/oder in
                           den Endgültigen Bedingungen enthaltene summarische
                           Darstellung der Steuersituation zu verlassen, sondern sich in
                           Bezug auf ihre individuelle Steuersituation hinsichtlich des Kaufs,
                           des Verkaufs und der Rückzahlung der Pfandbriefe von ihrem
                           eigenen Steuerberater beraten zu lassen. Nur diese Berater sind in
                           der Lage, die individuelle Situation des potentiellen Investors
                           angemessen einzuschätzen. Die zuvor beschriebene individuelle
                           steuerliche Behandlung der Pfandbriefe hinsichtlich eines
                           potentiellen Investors kann einen negativen Einfluss auf die
                           Erträge, die ein potentieller Investor bezüglich der Pfandbriefe
                           erhalten kann, haben.

Kein Steuerausgleich der   Alle Zahlungen unter den Pfandbriefen durch die Emittentin
Pfandbriefe:               erfolgen vorbehaltlich eines Abzugs von Steuern, Gebühren,
                           Einbehalten oder anderen Zahlungen, die zwingend gemacht,
                           gezahlt, an der Quelle einbehalten oder abgezogen werden
                           müssen. Gläubiger haben kein Anrecht auf Beträge, um solche
                           Steuern, Gebühren, Einbehalte oder andere Zahlungen
                           auszugleichen. Insofern verringert ein solcher Abzug den Ertrag
                           aus den Pfandbriefen.

FATCA:                     In     Bezug     auf    Pfandbriefe,      welche    nach       dem
                           31. Dezember 2012 von der Emittentin begeben werden, kann die
                           Emittentin unter bestimmten Umständen gemäß Abschnitten 1471
                           bis 1474 des U.S. Internal Revenue Code von 1986 in der
                           geänderten Fassung sowie den darunter erlassenen Verordnungen
                           ("FATCA") dazu verpflichtet sein, eine U.S. Quellensteuer von
                           30,00% auf alle oder einen Teil der Zahlungen auf Kapital und
                           Zinsen zu leisten, welche als passthru payments ("Durchgeleitete
                           Zahlungen") an ausländische Finanzinstitute behandelt werden,
                           es    sei   denn,     das     ausländische    Finanzinstitut     als
                           Zahlungsempfänger erklärt sich unter anderem damit
                           einverstanden, die Identität bestimmter U.S. Kontoinhaber bei
                           dem     ausländischen     Finanzinstitut   (oder    bei      seinen
                           Tochtergesellschaften) offenzulegen and jährlich bestimmte
                           Informationen über solche Konten zu melden.

                           Eine vom U.S. Internal Revenue Service erlassene Richtlinie
                           weist darauf hin, dass in Bezug auf Anleihen, die am 1. Januar
                           2013 noch nicht begeben waren, die FATCA Quellensteuer von
                                             - 21 -


                               30,00% auf ausländische Durchgeleitete Zahlungen, welche nach
                               dem 31. Dezember 2016 gemacht werden, anwendbar ist.

                               Sofern anwendbar, werden die maßgeblichen Endgültigen
                               Bedingungen      der    Pfandbriefe,    welche     nach   dem
                               31. Dezember 2012 begeben werden, auf FATCA eingehen.
                               Sollte ein Betrag im Rahmen der U.S. Quellensteuer von den
                               Zinsen, dem Kapital oder anderen Zahlungen auf die Pfandbriefe
                               abgezogen oder einbehalten werden, weil der Gläubiger gegen
                               FATCA verstoßen hat, ist weder die Emittentin noch irgendeine
                               Zahlstelle   oder    eine     andere    Person     unter   den
                               Emissionsbedingungen dazu verpflichtet, aufgrund eines solchen
                               Abzugs oder Einbehalts zusätzliche Zahlungen zu leisten.

Unabhängige Einschätzung und   Jeder potentielle Erwerber der Pfandbriefe muss auf der
Beratung:                      Grundlage seiner eigenen unabhängigen Einschätzung und der
                               entsprechenden unabhängigen den Umständen entsprechenden
                               professionellen Beratung entscheiden, ob der Kauf der
                               Pfandbriefe in jeder Hinsicht seinen eigenen finanziellen
                               Möglichkeiten, Zielen und Umständen (oder, für den Fall dass die
                               Pfandbriefe treuhänderisch erworben werden, derjenigen des
                               Begünstigten) entspricht, mit allen geltenden Anlagerichtlinien,
                               Richtlinien und Einschränkungen (je nachdem ob die Pfandbriefe
                               im eigenen Namen oder treuhänderisch erworben werden)
                               übereinstimmt und sich als geeignete angemessene und zulässige
                               Investition darstellt (für sich selbst oder, für den Fall dass die
                               Pfandbriefe treuhänderisch erworben werden, für den
                               Begünstigten). Dies gilt unabhängig von den offensichtlichen und
                               erheblichen Risiken, die mit einer Investition oder der
                               Inhaberschaft an den Pfandbriefen verbunden sind. Die Emittentin
                               lehnt jede Verantwortung für eine Beratung potentieller
                               Investoren bezüglich Angelegenheiten, die im Zusammenhang
                               mit den Gesetzen des Landes, in dem diese potentiellen
                               Investoren ansässig sind, entstehen und die den Kauf, das Halten
                               oder das Empfangen von Zahlungen im Zusammenhang mit den
                               Pfandbriefen oder die Lieferung von Pfandbriefen beeinflussen,
                               ab. Informiert sich ein potentieller Investor nicht ausreichend
                               hinsichtlich einer Anlage in die Pfandbriefe, besteht das Risiko,
                               dass dies zu Nachteilen für den Investor führt.

Abwicklung über Clearstream    Pfandbriefe, die unter diesem Programm begeben werden, können
Banking AG, Frankfurt am       durch eine oder mehrere Globalurkunde(n) verbrieft werden.
Main:                          Diese Globalurkunde(n) werden bei Clearstream Frankfurt
                               hinterlegt. Gläubiger sind nicht berechtigt, die Ausstellung
                               effektiver Stücke zu verlangen. Da die Pfandbriefe in einer oder
                               mehreren Globalurkunde(n) verbrieft sind, können Gläubiger ihr
                               wirtschaftliches Eigentum nur durch Clearstream Frankfurt
                               übertragen.

                               Solange die Pfandbriefe in einer oder mehreren Globalurkunde(n)
                               verbrieft sind, wird die Emittentin durch Zahlung an Clearstream
                               Frankfurt zur Weiterleitung an die Kontoinhaber von ihrer
                               Zahlungsverpflichtung befreit. Wirtschaftliche Eigentümer der
                               Globalurkunde sind hinsichtlich des Empfangs von Zahlungen
                               unter den entsprechenden Pfandbriefen auf die Verfahren von
                               Clearstream Frankfurt angewiesen. Die Emittentin übernimmt
                                             - 22 -


                               keine Verantwortung und Haftung für die Richtigkeit des
                               Nachweises des wirtschaftlichen Eigentums der Globalurkunde(n)
                               oder die ordnungsgemäße Zahlung an die wirtschaftlichen
                               Eigentümer.

Ausweitung der Spanne          Im      Falle    besonderer    Marktsituationen,    in    denen
zwischen Kauf- und             Sicherungsgeschäfte durch die Emittentin nicht oder nur unter
Verkaufskursen und –preisen:   erschwerten Bedingungen möglich sind, kann es zu zeitweisen
                               Ausweitungen der Spanne zwischen Kauf- und Verkaufskursen
                               bzw. zwischen Kauf- und Verkaufspreisen, die von der Emittentin
                               gestellt werden können, kommen, um die wirtschaftlichen Risiken
                               der Emittentin einzugrenzen. Daher veräußern Gläubiger, die ihre
                               Pfandbriefe an einer Wertpapierbörse oder im "Over-the-Counter-
                               Markt" (d.h. dem Handel außerhalb der Börse) veräußern
                               möchten, gegebenenfalls zu einem Preis, der erheblich unter dem
                               tatsächlichen Wert der Pfandbriefe zum Zeitpunkt ihres Verkaufs
                               liegt.

Keine Kündigungsmöglichkeit    Die Emissionsbedingungen der Pfandbriefe räumen kein Recht
der Gläubiger:                 einer vorzeitigen Rückzahlung ein. Insofern haben die Gläubiger
                               während der Laufzeit der Pfandbriefe kein Recht, eine vorzeitige
                               Rückzahlung der Pfandbriefe zu verlangen. Eine Realisierung des
                               durch die Pfandbriefe gegebenenfalls verbrieften wirtschaftlichen
                               Wertes (bzw. eines Teils davon) ist nur durch Veräußerung der
                               Pfandbriefe möglich.

                               Eine Veräußerung der Pfandbriefe setzt voraus, dass sich
                               Marktteilnehmer finden, die zum Ankauf der Pfandbriefe zu
                               einem entsprechenden Preis bereit sind. Finden sich keine solchen
                               kaufbereiten Marktteilnehmer, kann der Wert der Pfandbriefe
                               nicht realisiert werden. Aus der Begebung der Pfandbriefe ergibt
                               sich für die Emittentin gegenüber den Gläubigern keine
                               Verpflichtung, einen Marktausgleich für die Pfandbriefe
                               vorzunehmen bzw. die Wertpapiere zurückzukaufen.

2. Allgemeine Risiken im Zusammenhang mit Veränderungen der Marktumstände

Fehlende Marktliquidität:      Es kann nicht vorausgesagt werden, ob es für die Pfandbriefe
                               einen Sekundärmarkt gibt, ob ein solcher Markt liquide oder
                               illiquide sein wird und wie sich die Pfandbriefe in einem solchen
                               Sekundärmarkt handeln lassen. Wenn die Pfandbriefe nicht an
                               einer Börse gehandelt werden, kann es schwierig sein,
                               Informationen zur Preisbestimmung der Pfandbriefe zu erhalten
                               und Liquidität und Marktpreis der Pfandbriefe können dadurch
                               nachteilig beeinflusst werden. Die Liquidität der Pfandbriefe kann
                               auch durch Wertpapieran- und -verkaufsbeschränkungen
                               verschiedener Rechtsordnungen beeinträchtigt werden. Je
                               eingeschränkter der Sekundärmarkt ist, desto schwieriger kann es
                               für Gläubiger sein, den Marktwert der Pfandbriefe vor Ablauf des
                               Ausübungs-, des Ablauf- oder des Fälligkeitstermins zu
                               realisieren.

Marktwert von Pfandbriefen:    Der Marktwert von Pfandbriefen kann durch eine Vielzahl von
                               Faktoren, wie z.B. den Marktzins, Renditen und die
                               Marktliquidität, die Qualität des Deckungsstocks sowie durch die
                               noch verbleibende Zeit bis zum Fälligkeitstag negativ beeinflusst
                                              - 23 -


                                werden. Der Wert von Pfandbriefen hängt des Weiteren von einer
                                Anzahl an zusammenhängenden Faktoren, einschließlich
                                wirtschaftlicher, finanzieller und politischer Ereignisse in
                                Deutschland und anderen Ländern ab, einschließlich von
                                Umständen, die den Kapitalmarkt im Allgemeinen beeinflussen.

Marktpreisrisiko – Bisherige    Der historische Kurs eines Pfandbriefs ist kein Indikator für seine
Wertentwicklung:                künftige Entwicklung. Es lässt sich nicht vorhersagen, ob der
                                Marktpreis eines Pfandbriefs steigen oder fallen wird.

                                Die Emittentin übernimmt keine Gewähr dafür, dass die Differenz
                                zwischen Ankaufs- und Verkaufskurs innerhalb einer bestimmten
                                Spanne liegt oder konstant bleibt.

3. Risiken im Zusammenhang mit spezifischen Produktkategorien

Festverzinsliche Pfandbriefe:   Der Gläubiger eines Festverzinslichen Pfandbriefs ist dem Risiko
                                ausgesetzt, dass der Kurs eines solchen Pfandbriefs infolge von
                                Veränderungen des aktuellen Marktzinssatzes fällt. Während der
                                Nominalzinssatz eines Festverzinslichen Pfandbriefs während der
                                Laufzeit des Pfandbriefs fest ist, verändert sich der Marktzinssatz
                                typischerweise täglich. Da der Marktzinssatz sich verändert,
                                verändern sich die Kurse eines Festverzinslichen Pfandbriefs
                                ebenfalls. Wenn der Marktzinssatz steigt, fällt typischerweise der
                                Kurs des Festverzinslichen Pfandbriefs, bis die Rendite eines
                                solchen Pfandbriefs etwa dem Marktzinssatz entspricht. Wenn der
                                Marktzinssatz fällt, steigt typischerweise der Kurs des
                                Festverzinslichen Pfandbriefs, bis die Rendite eines solchen
                                Pfandbriefs etwa dem Marktzinssatz entspricht. Veränderungen
                                im Marktzinssatz sind insbesondere für solche Gläubiger relevant,
                                die die Pfandbriefe vor ihrer Fälligkeit verkaufen möchten.

Variabel Verzinsliche           Der Gläubiger eines Variabel Verzinslichen Pfandbriefs ist dem
Pfandbriefe:                    Risiko eines schwankenden Zinsniveaus und ungewisser
                                Zinserträge ausgesetzt. Ein schwankendes Zinsniveau macht es
                                unmöglich, die Rendite von Variabel Verzinslichen Pfandbriefen
                                im Voraus zu bestimmen.

Nullkupon-Pfandbriefe:          Auf Nullkupon-Pfandbriefe werden keine Zinsen gezahlt, jedoch
                                werden Nullkupon-Pfandbriefe gewöhnlicherweise mit einem
                                Abschlag auf ihren Nennbetrag begeben. Anstelle von
                                periodischen Zinszahlungen, begründet die Differenz zwischen
                                dem Rückzahlungskurs und dem Emissionspreis Zinsertrag bis
                                zur Fälligkeit und reflektiert den Marktzinssatz. Ein Gläubiger
                                eines Nullkupon-Pfandbriefs ist dem Risiko ausgesetzt, dass der
                                Kurs eines solchen Pfandbriefs infolge von Veränderungen des
                                Marktzinssatzes fällt. Kurse von Nullkupon-Pfandbriefen sind
                                volatiler als Kurse von Festverzinslichen Pfandbriefen und
                                reagieren in höherem Maße auf Veränderungen des
                                Marktzinssatzes als verzinsliche Pfandbriefe mit einer ähnlichen
                                Fälligkeit.
                                                 - 24 -


II. Risiken im Zusammenhang mit der Emittentin

Marktrisiko:                      Das Marktrisiko ist das Risiko potenzieller Verluste aufgrund
                                  nachteiliger Veränderungen der Marktpreise oder der zugrunde
                                  liegenden     Marktparameter,   welche      die   Marktpreise
                                  beeinflussen.

                                  Das Zinsänderungsrisiko im Bankbuch stellt die größte Quelle
                                  für das Marktrisiko für die Emittentin dar. Anleger sollten
                                  beachten, dass sich die Marktzinsen jederzeit ändern können
                                  und nicht vorhersehbar sind.

                                  Änderungen der Marktparameter können sowohl das
                                  Periodenergebnis als auch den Barwert des Portfolios der
                                  Emittentin negativ beeinflussen.

Liquiditätsrisiko:                Das Liquiditätsrisiko ist das Risiko eines finanziellen Verlusts
                                  oder Ergebnisrückgangs, das eintritt, wenn gegenwärtige und
                                  zukünftige finanzielle Verpflichtungen nicht oder nicht in
                                  voller Höhe bei Fälligkeit fristgerecht oder zu vertretbaren
                                  Kosten erfüllt werden. Das Liquiditätsrisiko kann sich auch
                                  einstellen als Folge einer eingeschränkten Möglichkeit der
                                  Refinanzierung über den Markt bzw. als Folge erhöhter Kosten
                                  der Refinanzierung oder, wenn bestehende Positionen nur zu
                                  Konditionen aufgelöst werden können, die für die Emittentin
                                  nachteilig sind.

                                  Die Hauptfinanzierungsquelle der Emittentin besteht aus
                                  Kundeneinlagen, die kurzfristig abgerufen werden können.
                                  Daraus resultiert, dass die Hauptursache für das
                                  Liquiditätsrisiko in der unerwarteten Abrufung von
                                  Kundengeldern besteht. Das Liquiditätsrisiko kann dazu
                                  führen, dass die Finanzlage der Emittentin negativ beeinflusst
                                  wird, wenn (i) die Emittentin nicht in der Lage ist, fällige
                                  Verpflichtungen nachzukommen, weil sie ihre Positionen nicht
                                  realisieren oder eine angemessene Finanzierung nicht zur
                                  Verfügung steht (Refinanzierungsrisiko), oder (ii) aufgrund
                                  unzureichender Markttiefe oder anderer Marktstörungen,
                                  aktuelle Positionen nicht ohne wesentliche Auswirkungen auf
                                  den        Marktpreis      aufgelöst     werden       können
                                  (Marktliquiditätsrisiko).

Kreditrisiko:                     Das Kreditrisiko bezeichnet das Risiko potenzieller Verluste,
                                  die aus negativen Bonitätsveränderungen oder aus einer
                                  drohenden Zahlungsunfähigkeit und/oder Insolvenz eines
                                  Schuldners (einschließlich der Emittenten von Wertpapieren)
                                  oder Geschäftspartners resultieren können. Es schließt auch
                                  Abwicklungsrisiken mit ein.

                                  Das Kreditrisiko wird wie folgt definiert: Das Bonitäts-
                                  /Migrationsrisiko und das Ausfallrisiko bezeichnet das Risiko
                                  von Verlusten aufgrund der Bonitätsverschlechterung oder des
                                  Ausfalls eines Schuldners (einschließlich der Emittenten von
                                  Wertpapieren) oder von Kontrahenten von Handelsgeschäften.

                                  Das Kreditrisiko verweist auf die Risiken im Zusammenhang
                                       - 25 -


                         mit negativen Bonitätsveränderungen der Schuldner und des
                         Ausfalls insbesondere im Falle der Nicht-Rückzahlung von
                         Verbindlichkeiten gegenüber der Emittentin.

                         Das Länderrisiko bezeichnet das Risiko von Verlusten der
                         Emittentin aufgrund von Ereignissen in einem bestimmten
                         Land (oder einer Gruppe von Ländern), wie politischen oder
                         sozialen Unruhen, Verstaatlichungen und staatlicher
                         Nichtanerkennung von Auslandsschulden. Das Länderrisiko
                         umfasst auch das Transfer-, Konvertierungs-, Abwertungs-
                         oder Entwertungsrisiko sowie das Risiko von Verlusten der
                         Emittentin aufgrund von Umtauschbeschränkungen bezüglich
                         von Währungen.

Operationelle Risiken:   Operationelle Risiken bezeichnen die Gefahr von Verlusten,
                         die in Folge der Unangemessenheit oder des Versagens von
                         internen Verfahren, Menschen oder Systemen (z.B. Ausfälle
                         der Datenverarbeitungssysteme, Unterschlagung, menschliches
                         Versagen, fehlerhafte Prozesse, strukturelle Schwächen,
                         unzulängliche Überwachung) oder in Folge von externen
                         Ereignissen (kriminelle Handlungen, Naturkatastrophen etc.)
                         eintreten. Im Fall der Emittentin schließt diese Definition auch
                         Rechtsrisiken ein, die aus vertraglichen Übereinkünften oder
                         den allgemeinen gesetzlichen Rahmenbedingungen resultieren.

Sonstige Risiken:        Die Emittentin ist im Rahmen ihrer Geschäftstätigkeit auch
                         Reputationsrisiken sowie Modellrisiken ausgesetzt. Das
                         Reputationsrisiko beschreibt die Gefahr, dass aus einem
                         Vertrauensverlust bei Kunden oder Geschäftspartnern ein
                         Schaden entsteht. Bei Modellrisiken handelt es sich um
                         theoretische Risiken, die auftreten können, wenn die
                         tatsächlichen Entwicklungen substanziell von den modellierten
                         Werten abweichen.

Risikokonzentration:     Aufgrund der geschäftsstrategischen Fokussierung auf das
                         Retail-Geschäft geht die Emittentin bewusst bestimmte
                         Konzentrationen auf Produktebene im Retail-Segment ein. Die
                         Emittentin    hat    bestimmte      Produktmerkmale    sowie
                         Höchstbeträge/Obergrenzen für Kredit- und Limithöhen sowie
                         für Laufzeiten definiert mit dem Ziel, Risikokonzentrationen
                         innerhalb des Retail-Geschäfts zu steuern.

                         In Bezug auf das institutionelle Geschäft, welches
                         festverzinsliche Investitionen der Emittentin, überwiegend
                         Staatsanleihen bzw. staatsbezogene Anleihen, Pfandbriefe und
                         andere gedeckte Anleihen (covered bonds), Verbriefungen
                         (Asset Backed Securities, "ABS" / Mortgage Backed Securities,
                         "MBS") sowie Investitionen im Bereich des kurzfristigen
                         Liquiditätsmanagements umfasst, spielen Investitionen
                         innerhalb Deutschlands die größte Rolle.

                         Engagements gegenüber Staaten und Gebietskörperschaften in
                         Griechenland, Spanien, Italien und Ungarn wurden im Verlauf
                         des Jahres 2011 auf Basis der Nominalwerte um 62% auf unter
                         Euro 0,6 Mrd. zum 31. Dezember 2011 gesenkt. Es bestehen
                         keine entsprechenden Engagements mit Portugal und Irland.
                                               - 26 -



                                 Konzentrationsrisiken bestehen zudem aufgrund der
                                 Konzentration von Geschäften mit bestimmten Gegenparteien,
                                 insbesondere mit solchen innerhalb der ING Gruppe.

                                 Im Commercial Banking erfolgt das Engagement primär in
                                 Deutschland, gefolgt von Aktivitäten in Ländern außerhalb der
                                 Europäischen Union. Hierbei handelt es sich überwiegend um
                                 Strukturierte Exportfinanzierungen, die durch staatliche
                                 Exportversicherungen gedeckt sind (z.B. Hermes).

Risiken in Bezug auf die         Als Reaktion auf die Krise an den Finanzmärkten haben die
zunehmende Regulierung der       meisten Rechtsordnungen die Regulierungsdichte erhöht und
Finanzmärkte:                    Maßnahmen ergriffen, um eine zukünftigen Finanzkrise zu
                                 verhindern oder zumindest ihre Auswirkungen zu minimieren;
                                 diese bereits umgesetzten oder geplanten Vorschriften und
                                 Maßnahmen können zu zusätzlichen Kosten führen.

                                 Darüber hinaus sehen die Basel III-Regeln Anforderungen an
                                 eine höhere und bessere Eigenkapitalausstattung vor und
                                 führen auch zwei globale Mindeststandards für die
                                 Liquiditätsfinanzierung ein: Die Mindestliquiditätsquote
                                 (Liquidity    Coverage       Ratio)    und     die    Strukturelle
                                 Liquiditätsquote (Net Stable Funding Ratio). Diese Regeln
                                 können zu einem zunehmenden Erfordernis an Eigenkapital
                                 und Liquidität führen bzw. zusätzliche Kosten verursachen und
                                 sich auf die Profitabilität der Emittentin auswirken.

B.    Allgemeine Informationen über das Programm

Emittentin:                      ING-DiBa AG

Arrangeur:                       Commerzbank Aktiengesellschaft

Platzeure:                       Die Emittentin kann von Zeit zu Zeit Platzeure hinsichtlich einer
                                 oder mehrerer Tranchen bestellen. Bezugnahmen in diesem
                                 Basisprospekt auf "Platzeure" sind als Bezugnahmen auf die
                                 hinsichtlich einer oder mehrerer Tranchen bestellten Platzeure zu
                                 verstehen.

Emissionsstelle:                 ING-DiBa AG

Zahlstelle:                      ING-DiBa AG und andere Institutionen, wie in den maßgeblichen
                                 Endgültigen Bedingungen angegeben

Programmvolumen:                 Euro 10.000.000.000

Platzierung:                     Pfandbriefe werden auf syndizierter oder nicht-syndizierter Basis
                                 mittels öffentlichen Angebots oder als Privatplatzierung platziert.
                                               - 27 -


C.    Zusammenfassung der "Emissionsbedingungen der Pfandbriefe und ähnliche Informationen"

I. Allgemeine Information

Emissionsverfahren:              Die Pfandbriefe werden fortlaufend als Serien (jeweils eine
                                 "Serie") begeben und jede Serie besteht aus einer oder mehrerer
                                 Tranchen (jeweils eine "Tranche"), die jeweils aus in jeder
                                 Hinsicht     identischen   Pfandbriefen     bestehen,   jedoch
                                 unterschiedliche       Begebungstage,      Verzinsungsbeginne,
                                 Emissionspreise und erste Zinszahlungstage haben. Die
                                 besonderen Bedingungen für jede Tranche werden in den
                                 jeweiligen Endgültigen Bedingungen angegeben.

Währungen:                       Die Pfandbriefe werden ausschließlich in Euro begeben.

Festgelegte Stückelungen         Pfandbriefe werden mit solchen Stückelungen begeben, wie von
von Pfandbriefen:                der Emittentin und dem/den maßgeblichen Platzeur/en festgelegt
                                 und wie in den jeweiligen Endgültigen Bedingungen angegeben,
                                 wobei Pfandbriefe, die an einer Wertpapierbörse innerhalb des
                                 Europäischen Wirtschaftsraumes zum Handel an einem
                                 geregelten Markt zugelassen werden oder die in einem
                                 Mitgliedsstaat des Europäischen Wirtschaftsraumes unter
                                 Umständen      öffentlich   angeboten    werden,   die     die
                                 Veröffentlichung eines Prospekts unter der Prospektrichtlinie
                                 erfordern, eine Stückelung von mindestens Euro 100.000 haben
                                 müssen.

Laufzeiten:                      Die Laufzeiten der Pfandbriefe entsprechen den Vereinbarungen
                                 zwischen der Emittentin und dem/n betreffenden Platzeur/en und
                                 wie in den jeweiligen Endgültigen Bedingungen angegeben,
                                 vorbehaltlich geltender Mindest- oder Höchstlaufzeiten, die von
                                 der betreffenden Zentralbank (oder einer vergleichbaren Stelle)
                                 oder aufgrund von auf die Emittentin oder die Pfandbriefe
                                 anwendbaren Gesetze oder Rechtsvorschriften gefordert oder
                                 erlaubt sind.

Ausgabepreis:                    Pfandbriefe können zu einem Ausgabepreis zum Nennbetrag oder
                                 mit einem Auf- oder Abgeld begeben werden.

Form und Art der Pfandbriefe:    Die Pfandbriefe lauten auf den Inhaber und werden ausschließlich
                                 in Form einer klassischen Globalurkunde ("CGN") begeben. Es
                                 werden keine effektiven Stücke ausgestellt.

                                 Pfandbriefe, auf die die U.S. Treasury Regulation § 1.163-5(C)
                                 (2) (i) (c) (die "TEFRA C-Rules") anwendbar ist ("TEFRA C-
                                 Pfandbriefe"), werden dauerhaft durch eine auf den Inhaber
                                 lautende Dauerglobalurkunde ohne Zinsschein ("Dauerglobal-
                                 urkunde") verbrieft.

                                 Pfandbriefe, auf die die U.S. Treasury Regulation § 1.163-5(c) (2)
                                 (i) (D) (die "TEFRA D-Rules") anwendbar ist ("TEFRA D-
                                 Pfandbriefe"), werden stets anfänglich durch eine vorläufige
                                 Globalurkunde ("Vorläufige Dauerglobalurkunde") verbrieft,
                                 die gegen eine oder mehrere die Pfandbriefe verbriefende
                                 Dauerglobalurkunden ausgetauscht wird, nicht früher als 40 Tage
                                 nach dem Abschluss der Platzierung der Pfandbriefe der
                                              - 28 -


                                jeweiligen Tranche und nur gegen Nachweis des Nichtbestehens
                                einer U.S.-Inhaberschaft (certification of non U.S. beneficial
                                ownership), dessen Muster bei der bezeichneten Geschäftsstelle
                                der ING-DiBa AG als Emissionsstelle erhältlich ist.

                                Inhaber-Pfandbriefe, auf die weder die TEFRA C-Rules noch die
                                TEFRA D-Rules anwendbar sind, werden durch eine
                                Dauerglobalurkunde verbrieft.

                                Globalurkunden werden am oder vor dem Begebungstag bei
                                Clearstream Frankfurt zur Hinterlegung eingereicht.

                                Die     Pfandbriefe       werden         ausschließlich       als
                                Hypothekenpfandbriefe emittiert.

                                Hypothekenpfandbriefe sind durch separate Pools von
                                Hypothekendarlehen gesichert bzw. "gedeckt". Emissionen von
                                Pfandbriefen durch die Emittentin sind Gegenstand des
                                Pfandbriefgesetzes vom 22. Mai 2005, das am 19. Juli 2005 in
                                Kraft getreten ist und zuletzt am 9. Dezember 2010 geändert
                                wurde.

Rückzahlungen:                  Pfandbriefe werden nicht vor der festgelegten Fälligkeit
                                zurückgezahlt.

Steuern:                        Sämtliche auf die Pfandbriefe zahlbare Beträge an Kapital oder
                                Zinsen sind ohne Einbehalt oder Abzug von oder aufgrund von
                                gegenwärtigen oder zukünftigen Steuern oder sonstigen Abgaben
                                gleich welcher Art zu leisten, die von oder in der Bundesrepublik
                                Deutschland oder von oder für Rechnung einer dort zur
                                Steuererhebung ermächtigten Gebietskörperschaft oder Behörde
                                in der Bundesrepublik Deutschland oder in den Vereinigten
                                Staaten von Amerika auferlegt oder erhoben werden, es sei denn,
                                dieser Einbehalt oder Abzug ist gesetzlich oder gemäß eines
                                Vertrages zwischen der Emittentin und den Vereinigten Staaten
                                von Amerika oder einer Behörde der Vereinigten Staaten von
                                Amerika vorgeschrieben.

Status der Pfandbriefe:         Die Pfandbriefe begründen nicht nachrangige Verbindlichkeiten
                                der Emittentin, die untereinander gleichrangig sind. Die
                                Pfandbriefe sind nach Maßgabe des deutschen Pfandbriefgesetzes
                                gedeckt und stehen mindestens im gleichen Rang mit allen
                                anderen       Verpflichtungen     der      Emittentin      aus
                                Hypothekenpfandbriefen.

Keine vorzeitige Rückzahlung:   Weder die Emittentin noch ein Gläubiger ist zur vorzeitigen
                                Rückzahlung der Pfandbriefe berechtigt.

Börsennotierung:                Es wurde ein Antrag auf Zulassung der Pfandbriefe, die unter
                                dem Programm begeben werden, am regulierten Markt der
                                Frankfurter Wertpapierbörse gestellt. Pfandbriefe können jedoch
                                auch an einer anderen / anderen oder einer weiteren / weiteren
                                Wertpapierbörse/n zum Handel zugelassen werden bzw.
                                Pfandbriefe können auch an keiner Wertpapierbörse zugelassen
                                werden, jeweils wie in den maßgeblichen Endgültigen
                                Bedingungen angegeben.
                                                 - 29 -



Anwendbares Recht:                 Deutsches Recht

Verkaufsbeschränkungen:            Das Angebot und der Verkauf von Pfandbriefen sowie der
                                   Vertrieb von Angebotsunterlagen in den Vereinigten Staaten von
                                   Amerika, in dem Vereinigten Königreich und den Jurisdiktionen,
                                   die die Richtlinie 2003/71/EG, wie von Zeit zu Zeit geändert, (die
                                   "Prospektrichtlinie") in nationales Recht umgesetzt haben,
                                   unterliegen besonderen Beschränkungen und außerdem solchen
                                   anderen Beschränkungen, die nach dem jeweiligen Recht im
                                   Zusammenhang für das Angebot und den Verkauf einer
                                   bestimmten Serie von Pfandbriefen gelten.

Gerichtsstand:                     Gerichtsstand für die Erfüllung von Verpflichtungen aus den
                                   Pfandbriefen ist Frankfurt am Main.

                                   Ausschließlicher Gerichtsstand für alle sich aus den Pfandbriefen
                                   ergebenen Rechtsstreitigkeiten ist Frankfurt am Main.

Sprache der Bedingungen:           In den Endgültigen Bedingungen wird angegeben, ob die
                                   Bedingungen einer Serie von Pfandbriefen ausschließlich in
                                   deutscher Sprache, ausschließlich in englischer Sprache, in
                                   englischer und deutscher Sprache (englischer Text maßgeblich)
                                   oder deutscher und englischer Sprache (deutscher Text
                                   maßgeblich) abgefasst werden.

II. Bestimmte Produktkategorien:

Festverzinsliche Pfandbriefe:      Festverzinsliche Pfandbriefe werden zu einem Festzinssatz
                                   verzinst, der zu den Bedingungen gezahlt wird, wie zwischen der
                                   Emittentin und dem/n betreffenden Platzeur(en) vereinbart.

Variabel verzinsliche              Variabel verzinsliche Pfandbriefe werden auf der Grundlage der
Schuldverschreibungen:             Vereinbarungen zwischen der Emittentin und dem/n betreffenden
                                   Platzeur(en) verzinst. Eine etwaige Marge bei variabler
                                   Verzinsung wird zwischen der Emittentin und dem/n betreffenden
                                   Platzeur(en) für jede Serie von Pfandbriefen vereinbart.
                                   Für variabel verzinsliche Pfandbriefe sind die Zinsperioden ein,
                                   zwei, drei, sechs oder zwölf Monate oder ein solcher anderer
                                   Zeitraum, wie zwischen der Emittentin und dem/n betreffenden
                                   Platzeur(en) vereinbart.

Nullkupon-Pfandbriefe:             Nullkupon-Pfandbriefe werden mit einem Abschlag auf ihren
                                   Nennbetrag angeboten und verkauft und es erfolgen keine
                                   Zinszahlungen ausgenommen für den Fall von verspäteten
                                   Zahlungen.


D.    Zusammenfassung der "Beschreibung der Emittentin"

Allgemeine Informationen:          ING-DiBa AG (die "Emittentin" und zusammen mit ihren
                                   konsolidierten Tochtergesellschaften, "ING-DiBa Gruppe")
                                   firmiert unter ihrem rechtlichen und kommerziellen Namen
                                   "ING-DiBa AG". Die Rechtsvorgängerin der Emittentin, die
                                   Bankhaus Lunk und Co. GmbH, wurde am 22. April 1955
                                   gegründet und ihr wurde die Erlaubnis nach den Gesetzen der
                                    - 30 -


                      Bundesrepublik      Deutschland      zur    Eröffnung      ihres
                      Geschäftsbetriebes im April 1955 erteilt.

                      Am 31. August 1956 erfolgte die Umfirmierung in "Kreditbank
                      Hagen GmbH". Nachdem der Sitz der Firma von Hagen nach
                      Frankfurt verlegt wurde, wurde die Rechtsform der Kreditbank
                      Hagen am 11. Oktober 1965 in eine Aktiengesellschaft mit dem
                      gesetzlichen    Namen      "Bank     für   Sparanlagen   und
                      Vermögensbildung Aktiengesellschaft"geändert. Sie wurde im
                      Handelsregister des Amtsgerichts Frankfurt am Main am 21.
                      Oktober 1965 unter der Nummer HRB 7727 eingetragen und
                      begann als Spezialinstitut für die Anlage vermögenswirksamer
                      Leistungen.     Vier     Jahre     später   fing    sie   an,
                      Hypothekenfinanzierungen anzubieten.

                      Am 20. September 1976 änderte die Bank für Sparanlagen und
                      Vermögensbildung Aktiengesellschaft ihren gesetzlichen Namen
                      in "BSV Bank für Sparanlagen und Vermögensbildung" um.

                      Am 14. Mai 1993 wurde der Name auf "Deutsche Direktbank
                      Aktiengesellschaft" und danach auf "Allgemeine Deutsche
                      Direktbank Aktiengesellschaft" umgeändert. Bis 1998 war das
                      Aktienkapital vollständig im Besitz eines von einer
                      Gewerkschaft     gehaltenen    Unternehmens,     der   BGAG
                      Beteiligungsgesellschaft der Gewerkschaften AG (Frankfurt). Im
                      selben Jahr erwarb die ING Gruppe eine 49-prozentige
                      Beteiligung an der Emittentin; das hundertprozentige Eigentum
                      wurde im Jahr 2003 erworben. Seit dem 1. Juli 2005 ist die
                      Emittentin im Markt unter dem Namen "ING-DiBa AG" tätig.

                      Die Emittentin hat am 31. August 2011 das deutsche
                      Firmenkundengeschäft der ING Bank N.V. mittels der
                      rechtlichen Integration der deutschen Niederlassung der ING
                      Bank N.V. (ING Bank N.V., Frankfurt Branch) in die ING-DiBa
                      AG übernommen.

                      Die Emittentin ist eine Aktiengesellschaft nach dem Recht der
                      Bundesrepublik Deutschland.

                      Der eingetragene Geschäftssitz befindet sich in der Theodor-
                      Heuss-Allee 106, 60486 Frankfurt am Main, Deutschland. Die
                      Telefonnummer lautet: +49 69 27 222 0.

Geschäftsüberblick:   Die Emittentin ist eine Universalbank mit einem
                      Direktbankmodell für ihr Privatkundengeschäft. Sie bietet
                      Privatkunden ein breites Spektrum an Produkten und
                      Dienstleistungen einer Privatkundenbank an. Firmenkunden
                      bietet     sie    maßgeschneiderte       Finanzierungslösungen
                      (einschließlich Exportfinanzierung) sowie Lösungen im Bereich
                      des Payment und Cash Management an.

                      Die Emittentin besitzt keine Filialen. Die Produkte werden den
                      Kunden vor allem im Wege des Direktvertriebs, d. h. durch
                      Online- oder Telefondienste oder per Postsendung,
                      einschließlich E-Mail oder Fax angeboten. Eine Ausnahme
                      besteht bei privaten Baufinanzierungen, bei denen die Emittentin
             - 31 -


mit     sorgfältig      ausgewählten     Hypothekenmaklern
zusammenarbeitet, und im Commercial Banking, wo
Firmenkunden ausschließlich durch individuelle Key Account
Manager betreut werden.

Die Emittentin unterteilt ihre Geschäftstätigkeit in die drei
Segmente Retail-Kundenvermögen, Retail-Kundenkredite und
Commercial Banking, welche wiederum in die nachfolgend
beschriebenen Kernprodukte unterteilt sind:

a.     Retail-Kundenvermögen

Spargelder: Die Emittentin bietet ihren Kunden standardisierte
Spargeldprodukte sowie spezielle Spargeldprodukte mit einem
integrierten  Zinsanstieg     (Zinswachstums-Konto)     sowie
Sparbriefe    und     Sparverträge     im     Rahmen      von
vermögenswirksamen Leistungen an. Des Weiteren bietet sie
auch Festgeldkonten mit verschiedenen Laufzeiten an.

Girokonten: Die Emittentin bietet Girokonten an mit der
Möglichkeit, Bargeld gebührenfrei von Geldautomaten im
gesamten Euroraum mit einer VISA-Karte abzuheben.

Wertpapiergeschäft:    Die    Emittentin    bietet    Kunden
Wertpapierdepots mit niedrigen Transaktionskosten an. Bei den
verwahrten Vermögenswerten handelt es sich um Wertpapiere,
Investmentfonds-Anteile und Exchange Traded Funds (ETF).

b.     Retail-Kundenkredite

Baufinanzierung:     Die    Emittentin   bietet   Erst-   und
Anschlussfinanzierungen für private Hauseigentümer mit einer
Laufzeit von fünf bis fünfzehn Jahren sowie Finanzierungen an,
die mit den Finanzierungsprogrammen der KfW (Kreditanstalt
für Wiederaufbau) kombiniert werden. Darüber hinaus bietet sie
Forward-Darlehen mit einer Vorlaufzeit von bis zu drei Jahren
an, mit denen sich Kunden das aktuelle Zinsniveau für eine
später fällige Anschlussfinanzierung sichern können. Die
Emittentin finanziert überwiegend eigengenutzte Immobilien.
Kredite für Grundstücke, welche als Kapitalanlage bestimmt
sind, werden nur in Ausnahmefällen und unter ganz bestimmten
Bedingungen gewährt. Die private Baufinanzierung erfolgt über
Direktkanäle; die Emittentin arbeitet darüber hinaus mit
sorgfältig ausgewählten Maklern zusammen.

Verbraucherkredite: Die Emittentin bietet maßgeschneiderte
Verbraucherkredite an. Zusätzlich zu den traditionellen
Krediten, die auf der Grundlage regelmäßiger Ratenzahlungen
basieren, bietet sie flexible Formen von Krediten an, die täglich
auf Basis eines im Vorhinein genehmigten Limits in Anspruch
genommen werden können. Spezielle Angebote für Verbraucher
für die Finanzierung des eigenen Fahrzeugs sowie für den
Erwerb oder die Modernisierung von Eigenheimen runden die
Produktpalette ab.
                                          - 32 -



                             c.     Commercial Banking

                             Im Segment Commercial Banking ist das Firmenkundengeschäft
                             der Emittentin zusammengefasst. Zu den Kunden gehören
                             mittelgroße bis große, international operierende Industrie- und
                             Handelsunternehmen mit Sitz in Deutschland sowie andere
                             internationale Kunden der ING Gruppe mit Niederlassungen in
                             Deutschland.

                             Die Emittentin bietet den Kunden neben dem klassischen
                             Kreditgeschäft unter anderem auch kurz- und langfristige
                             Exportfinanzierungen an. Zusätzlich offeriert die Emittentin im
                             Bereich Financial Markets Produkte zur Sicherung von
                             Währungs- und Zinsrisiken und darüber hinaus Lösungen für
                             den Zahlungsverkehr und das Cash-Management an.

Organisationsstruktur:       Das gezeichnete Kapital der Emittentin wird vollständig von ING
                             Deutschland GmbH (Frankfurt am Main) gehalten. Die Emittentin
                             ist Teil der ING Direct N.V., der internationalen
                             Direktbankengruppe der ING Groep N.V. (zusammen mit ihren
                             konsolidierten Tochtergesellschaften, "ING Gruppe"), welche
                             ihren Sitz in den Niederlanden hat, und eine hundertprozentige
                             Tochtergesellschaft der ING Bank N.V. ist.

Trendinformation:            Seit dem Datum des letzten veröffentlichten geprüften
                             Konzernabschlusses zum 31. Dezember 2011 gab es keine
                             wesentlichen negativen Veränderungen in den Aussichten der
                             Emittentin.

Abschlussprüfer:             Abschlussprüfer der Emittentin für die zum 31. Dezember 2010
                             und zum 31. Dezember 2011 endenden Geschäftsjahre war Ernst
                             & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart,
                             Niederlassung Eschborn/Frankfurt am Main, Mergenthalerallee
                             3-5, 65760 Eschborn, Deutschland ("Ernst & Young"). Ernst &
                             Young ist Mitglied der deutschen Wirtschaftsprüferkammer,
                             Berlin.
Hauptaktionäre:              Zum Datum dieses Basisprospekts beträgt das gezeichnete
                             Kapital der Emittentin EUR 100.000.000, welches in
                             100.000.000 Stückaktien aufgeteilt ist. Das Aktienkapital der
                             Emittentin wird vollständig von ING Deutschland GmbH
                             (Frankfurt am Main) gehalten.

Historische                  Gemäß dem nach IFRS erstellten Konzernabschluss betrugen die
Finanzinformationen:         Aktiva der ING-DiBa Gruppe zum 31. Dezember 2011 EUR
                             109,5 Milliarden und das Ergebnis vor Steuern für das zum 31.
                             Dezember 2011 endende Geschäftsjahr belief sich auf EUR 660
                             Millionen.
Wesentliche Veränderungen    Seit dem Stichtag des letzten geprüften Konzernabschlusses der
in der Finanzlage oder der   ING-DiBa Gruppe zum 31. Dezember 2011 sind keine
Handelsposition der          wesentlichen Veränderungen in der Finanzlage oder der
Emittentin:                  Handelsposition der ING-DiBa Gruppe eingetreten.
                                                      - 33 -


                                                                                 Part B of the Base Prospectus
                                                                                                  Risk Factors


                                               RISK FACTORS

The purchase of Pfandbriefe may involve substantial risks and is suitable only for investors with the
knowledge and experience in financial and business matters necessary to evaluate the risks and the
merits of an investment in the Pfandbriefe. Before making an investment decision, prospective
purchasers of Pfandbriefe should consider carefully, in the light of their own financial circumstances
and investment objectives, all the information set forth in this Base Prospectus.

The assessment of risks associated with a particular Series of Pfandbriefe may be different depending on
various factors. In particular, the assessment of risk on a case-by-case basis may be different for investors.

Prospective purchasers of the Pfandbriefe should recognise that the Pfandbriefe may decline in value and
should be prepared to sustain a total loss of their investment in the Pfandbriefe.

I.    Risks relating to the Pfandbriefe

1. General Risks relating to the Pfandbriefe

General
An investment in the Pfandbriefe entails certain risks, which vary depending on the specification and type
or structure of the Pfandbriefe. An investment in the Pfandbriefe is only suitable for potential investors who
(i) have the requisite knowledge and experience in financial and business matters to evaluate the merits and
risks of an investment in the Pfandbriefe and the information contained or incorporated by reference into
the Base Prospectuses (if any) or any applicable supplement thereto; (ii) have access to, and knowledge of,
appropriate analytical tools to evaluate such merits and risks in the context of the potential investor's
particular financial situation and to evaluate the impact the Pfandbriefe will have on their overall
investment portfolio; (iii) understand thoroughly the terms of the relevant Pfandbriefe and are familiar with
the behaviour of the financial markets; (iv) are capable of bearing the economic risk of an investment in the
Pfandbriefe until the maturity of the Pfandbriefe; and (v) recognise that it may not be possible to dispose of
the Pfandbriefe for a substantial period of time, if at all before maturity.

Interest Rate Risk
The interest rate risk is one of the central risks of interest-bearing Pfandbriefe. The interest rate level on the
money and capital markets may fluctuate on a daily basis and cause the value of the Pfandbriefe to change
on a daily basis. The interest rate risk is a result of the uncertainty with respect to future changes of the
level of the Market Interest Rate. In particular, holders of Fixed Rate Pfandbriefe are exposed to an interest
rate risk that could result in a diminution in value if the level of the Market Interest Rate increases. In
general, the effects of this risk increase as the Market Interest Rates increase.

Credit Risk
Any person who purchases the Pfandbriefe is relying upon the creditworthiness of the Issuer and has no
rights against any other person. Holders are subject to the risk of a partial or total failure of the Issuer to
make interest and/or redemption payments that the Issuer is obliged to make under the Pfandbriefe. The
worse the creditworthiness of the Issuer, the higher the risk of loss.

Spread Risk
Spread risk is defined as risk that quotations of financial instruments deviate more or less from the general
market. Hence, spreads combine components that reflect creditworthiness as well as liquidity aspects. The
Spread is the margin, which the Issuer pays the investor for taking a credit risk ("Spread"). Spreads are
added as margins to the current interest rate (without risk).

Factors influencing the Spread include, among other things, the creditworthiness and rating of the Issuer,
                                                    - 34 -


the value of assets in the cover pool, probability of default, recovery rate and remaining term to maturity of
the Pfandbrief. The liquidity situation, the general level of interest rates, overall economic developments,
and the currency, in which the relevant obligation is denominated may also have a negative effect.

Holders are exposed to the risk that the credit spread widens which results in a decrease in the price of the
Pfandbriefe.

Rating of the Pfandbriefe
A rating of Pfandbriefe, if any, may not adequately reflect all risks of the investment in such Pfandbriefe.
Equally, ratings may be suspended, downgraded or withdrawn. Such suspension, downgrading or
withdrawal may have an adverse effect on the market value and trading price of the Pfandbriefe. A credit
rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by a rating
agency at any time.

Reinvestment Risk
Holders may be exposed to risks connected to the reinvestment of interest income or redemption proceeds
received from Pfandbriefe. The return the Holder will receive from a Pfandbrief depends not only on the
price and the interest rate of the Pfandbrief but also on whether or not the interest received during the term
of the Pfandbrief can be reinvested at least at the same interest rate than the rate provided for in the
Pfandbrief. The risk that the general Market Interest Rate falls below the interest rate of the Pfandbrief
during its term is generally called reinvestment risk. The extent of the reinvestment risk depends on the
individual features of the relevant Pfandbrief.

Inflation Risk
The inflation risk is the risk of future money depreciation. The real yield from an investment is reduced by
inflation. The higher the rate of inflation, the lower the real yield on a Pfandbrief. If the inflation rate is
equal to or higher than the nominal yield, the real yield is zero or even negative.

Purchase on Credit – Debt Financing
If a loan is used to finance the acquisition of the Pfandbriefe by a Holder and the Pfandbriefe subsequently
go into default, or if the trading price diminishes significantly, the Holder may not only have to face a
potential loss on its investment, but it will also have to repay the loan and pay interest thereon. A loan may
significantly increase the risk of a loss. Potential investors should not assume that they will at all times be
able to repay the loan or pay interest thereon. Instead, potential investors should assess their financial
situation prior to an investment, as to whether they are able to pay interest on the loan, repay the loan on
demand, and contemplate that they may suffer losses.

Transaction Costs/Charges
When Pfandbriefe are purchased or sold, several types of ancillary costs (including transaction fees and
commissions) are incurred in addition to the purchase or sale price of the Pfandbrief. These ancillary costs
may significantly reduce or eliminate any profit from holding the Pfandbriefe. Credit institutions as a rule
charge commissions which are either fixed minimum commissions or pro-rata commissions, depending on
the order value. To the extent that additional – domestic or foreign – parties are involved in the execution
of an order, including but not limited to domestic dealers or brokers in foreign markets, Holders may also
be charged for the brokerage fees, commissions and other fees and expenses of such parties (third party
costs).

Change of Law
The Terms and Conditions of the Pfandbriefe will be governed by German law. No assurance can be given
as to the impact of any possible judicial decision or change to German law (or law applicable in Germany),
or administrative practice after the date of this Base Prospectus.
                                                     - 35 -



Taxation
Potential investors should be aware that they may be required to pay taxes or other documentary charges or
duties in accordance with the laws and practices of the country where the Pfandbriefe are transferred or
other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions may
be available for innovative financial instruments. Potential investors are advised not to rely upon the tax
summary contained in this document and/or in the Final Terms but to ask for their own tax adviser's advice
on their individual taxation with respect to the acquisition, sale and redemption of the Pfandbriefe. Only
these advisors are in a position to duly consider the specific situation of the potential investor. The afore-
mentioned individual tax treatment of the Pfandbriefe with regard to any potential investor may have an
adverse impact on the return which any such potential investor may receive under the Pfandbriefe.

No gross-up of the Pfandbriefe
All payments made by the Issuer in respect of the Pfandbriefe shall be made subject to any tax, duty,
withholding or other payment which may be required to be made, paid, withheld or deducted. Holders will
not be entitled to receive grossed-up amounts to compensate for any such tax, duty, withholding or other
payment. Hence, any such deduction will decrease the return on the Pfandbriefe.

FATCA
With respect to Pfandbriefe issued after 31 December 2012 by the Issuer, the Issuer may, under certain
circumstances, be required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of
1986, as amended and the regulations promulgated thereunder ("FATCA") to withhold U.S. tax at a rate of
30.00 per cent. on all or a portion of payments of principal and interest which are treated as "passthru
payments" made to foreign financial institutions unless the payee foreign financial institution agrees,
among other things, to disclose the identity of certain U.S. account holders at the institution (or the
institution’s affiliates) and to annually report certain information about such accounts.

Guidance issued by the U.S. Internal Revenue Service indicates that with respect to bonds that are not
outstanding on 1 January 2013, FATCA withholding tax of 30.00 per cent. will apply to foreign passthru
payments made after 31 December 2016.

If applicable, FATCA will be addressed in the relevant Final Terms with respect to Pfandbriefe issued after
31 December 2012. If an amount in respect of U.S. withholding tax were to be deducted or withheld from
interest, principal or other payments on the Pfandbriefe as a result of a holder’s failure to comply with
FATCA, none of the Issuer, any paying agent or any other person would pursuant to the terms and
conditions of the Pfandbriefe be required to pay additional amounts as a result of the deduction or
withholding of such tax.

Independent Review and Advice
Each potential investor must determine, based on its own independent review and such professional advice
as it deems appropriate under the circumstances, that its acquisition of the Pfandbriefe is fully consistent
with its (or if it is acquiring the Pfandbriefe in a fiduciary capacity, the beneficiary's) financial needs,
objectives and condition, complies and is fully consistent with all investment policies, guidelines and
restrictions applicable to it (whether acquiring the Pfandbriefe as principal or in a fiduciary capacity) and is
a fit, proper and suitable investment for it (or if it is acquiring the Pfandbriefe in a fiduciary capacity, for
the beneficiary), notwithstanding the clear and substantial risks inherent in investing in or holding the
Pfandbriefe. The Issuer disclaims any responsibility to advise potential investors of any matters arising
under the law of the country in which they reside that may affect the purchase of, or holding of, or the
receipt of payments or deliveries on the Pfandbriefe. If a potential investor does not inform itself in an
appropriate manner with regard to an investment in the Pfandbriefe, the investor's risks disadvantages in
the context of its investment.

Settlement via Clearstream Banking AG, Frankfurt am Main
Pfandbriefe issued under the Programme may be represented by one or more Global Note(s). Such Global
Note(s) will be deposited with Clearstream Frankfurt. Holders will not be entitled to receive definitive
Pfandbriefe. While the Pfandbriefe are represented by one or more Global Note(s) Holders will be able to
                                                     - 36 -


trade their beneficial interests only through Clearstream Frankfurt.

While the Pfandbriefe are represented by one or more Global Note(s), the Issuer will discharge its payment
obligations under the Pfandbriefe by making payments to Clearstream Frankfurt for distribution to its
account holders. A holder of a beneficial interest in a Global Note must rely on the procedures of
Clearstream Frankfurt to receive payments under the relevant Pfandbriefe. The Issuer has no responsibility
or liability for the records relating to, or payments made in respect of, beneficial interests in the Global
Note(s).

Expansion of the spread between bid and offer prices
In special market situations, where the Issuer is completely unable to conclude hedging transactions, or
where such transactions are very difficult to conclude, the spread between the bid and offer prices which
may be quoted by the Issuer may be temporarily expanded, in order to limit the economic risks to the
Issuer. Thus, Holders selling their Pfandbriefe on a stock exchange or on the over-the-counter market may
be doing so at a price that is substantially lower than the actual value of the Pfandbriefe at the time of sale.

No Holder’s right to demand early redemption
The Terms and Conditions of the Pfandbriefe do not provide for any right of early redemption. Hence,
Holders have no right to demand early redemption of the Pfandbriefe during the term of the Pfandbriefe.
The realisation of any economic value in the Pfandbriefe (or portion thereof) is only possible by way of
their sale (see also below under "Market Value of Pfandbriefe").

Sale of the Pfandbriefe is contingent on the availability of market participants willing to purchase the
Pfandbriefe at a commensurate price. If no such willing purchasers are available, the value of the
Pfandbriefe cannot be realised. The issue of the Pfandbriefe entails no obligation on the part of the Issuer
vis-à-vis the Holders to ensure market equilibrium or to repurchase the Pfandbriefe.

2. General Risks relating to Changes in Market Conditions

Market Illiquidity
There can be no assurance as to how the Pfandbriefe will trade in the secondary market or whether such
market will be liquid or illiquid or that there will be a market at all. If the Pfandbriefe are not traded on any
securities exchange, pricing information for the Pfandbriefe may be more difficult to obtain and the
liquidity and market prices of the Pfandbriefe may be adversely affected. The liquidity of the Pfandbriefe
may also be affected by restrictions on offers and sales of the securities in some jurisdictions. The more
limited the secondary market is, the more difficult it may be for the Holders to realise value for the
Pfandbriefe prior to the exercise, expiration or maturity date (see also below under "Market Value of
Pfandbriefe").

Market Value of Pfandbriefe
The market value of Pfandbriefe may be negatively affected by a number of factors including, but not
limited to, market interest and yield rates, market liquidity, the quality of the cover pool and the remaining
term of the Pfandbriefe.

The market value of Pfandbriefe also depends on a number of interrelated factors, including economic,
financial and political events in Germany or elsewhere, including factors affecting capital markets
generally. Sale of the Pfandbriefe is contingent on the availability of market participants willing to
purchase the Pfandbriefe at a commensurate price. If no such willing purchasers are available, the value of
the Pfandbriefe cannot be realised. The issue of the Pfandbriefe entails no obligation on the part of the
Issuer vis-à-vis the Holders to ensure market equilibrium or to repurchase the Pfandbriefe.

Market price risk – Historic performance
The historic price of a Pfandbrief should not be taken as an indicator of future performance of such
Pfandbrief. It is not foreseeable whether the market price of a Pfandbrief will rise or fall. The Issuer gives
no guarantee that the spread between purchase and selling prices is within a certain range or remains
constant.
                                                     - 37 -



3. Risks Relating to specific Product Categories

Fixed Rate Pfandbriefe
A holder of a Fixed Rate Pfandbrief is exposed to the risk that the price of such Pfandbrief falls as a result
of changes in the Market Interest Rate. While the nominal interest rate of a Fixed Rate Pfandbrief is fixed
during the life of such Pfandbrief, the current Market Interest Rate typically changes on a daily basis. As
the Market Interest Rate changes, the price of a Fixed Rate Pfandbrief also changes, but in the opposite
direction. If the Market Interest Rate increases, the price of a Fixed Rate Pfandbrief typically falls, until the
yield of such Pfandbrief is approximately equal to the Market Interest Rate. If the Market Interest Rate
falls, the price of a Fixed Rate Pfandbrief typically increases, until the yield of such Pfandbrief is
approximately equal to the Market Interest Rate. Changes in the Market Interest Rate are in particular
relevant for Holders who wish to sell the Pfandbriefe prior to the maturity date of the Pfandbriefe.

Floating Rate Pfandbriefe
A holder of a Floating Rate Pfandbrief is exposed to the risk of fluctuating interest rate levels and uncertain
interest income. Fluctuating interest rate levels make it impossible to determine the yield of Floating Rate
Pfandbriefe in advance and holders of Floating Rate Pfandbriefe cannot compare their return on investment
with that of investments with fixed interest rates. If the Terms and Conditions of the Pfandbriefe provide
for frequent interest payment dates, investors are exposed to reinvestment risk if Market Interest Rates
decline. That is, investors may only be able to reinvest the interest income paid to them at a relevant lower
interest rates then prevailing (see also above under "Reinvestment Risk").

Zero Coupon Pfandbriefe
Zero Coupon Pfandbriefe do not pay current interest but are typically issued at a discount from their
nominal value. Instead of periodical interest payments, the difference between the redemption price and the
Issue Price constitutes interest income until maturity and reflects the Market Interest Rate. A holder of a
Zero Coupon Pfandbrief is exposed to the risk that the price of such Pfandbrief falls as a result of changes
in the Market Interest Rate. Prices of Zero Coupon Pfandbriefe are more volatile than prices of Fixed Rate
Pfandbriefe and are likely to respond to a greater degree to Market Interest Rate changes than interest
bearing Pfandbriefe with a similar maturity.

B.II. Risks relating to the Issuer

The business strategy of ING-DiBa AG (the "Issuer" and, together with its consolidated subsidiaries,
"ING-DiBa Group") generally entails risk factors that may affect the ability to fulfil its obligations,
such as the obligations arising under the Pfandbriefe. The Issuer distinguishes five broad risk types:

(i) market risk;

(ii) liquidity risk;

(iii) credit risk;

(iv) operational risks; and

(v) other risks.

In addition due to its activities, the Issuer is exposed to risk concentrations and combinations of the
above mentioned risks.

Market Risk
Market risk is the risk of potential loss due to adverse changes of market prices, e.g. bonds, or of
underlying market parameters affecting market prices, such as interest rates, spreads and volatilities
which may negatively affect the Issuer’s earnings or the market value of the Issuer's portfolio.
                                                    - 38 -


Interest rate risk in the banking book (Bankbuch) constitutes the major source of market risk for the
Issuer. Investors should be aware of the fact that Market Interest Rates may change at any time and are
not predictable. Changes in Market Interest Rates may result in a decrease of the net interest income
(Nettozinsergebnis) and of the economic value as a means to assess the long-term earnings potential of
the Issuer.

Even if the Issuer is not materially exposed to currency risks or risks resulting from holding shares and
equity positions or to commodity risks, changes of market parameters may negatively influence the
periodical results as well as the net present value of the Issuer's portfolio.

Liquidity Risk
Liquidity risk is defined as the risk of financial loss or decrease in earnings as a consequence of not
meeting, at all or in full, present and future payment obligations when they become due, in a timely
manner and at reasonable cost. The liquidity risk may therefore also materialise as a result of a limited
possibility of refinancing in the market, of increased costs of refinancing or of only being able to wind
up existing positions to the own disadvantage.

While short-term liquidity risk refers to the risk of insufficient liquidity for the performance of day-to-
day payment obligations, structural liquidity risk refers to the risk arising from an imbalance in the
medium and long-term liquidity structure.

The Issuer’s principal financing source consists of client deposits which may be withdrawn on short
call. As a consequence, its principal source of refinancing risk consists in the unexpected high outflow
of customer deposits. Due to its business model, the Issuer’s assets as a rule are less liquid than its
liabilities. The consequential liquidity risk may result in the financial condition of the Issuer to be
negatively affected, if (i) the Issuer is not able to meet its liabilities due to its assets not being able to
be liquidated or adequate funding not being generated (funding liquidity risk); or (ii) due to
insufficient market depth or other market disruptions, existing positions may not be liquidated without
having significant impact on the market price (market liquidity risk).

Credit Risk
Credit risk is the risk of potential loss resulting from the deterioration of the creditworthiness or the
default and / or insolvency of debtors (including bond issuers) or trading counterparties and includes
settlement risk.

The Issuer distinguishes between the general default risk and country risk.

General Default Risk
The general default risk refers to the risks in connection with negative changes in the creditworthiness
of debtors and default, mainly in the event of non-repayment of obligations towards the Issuer.

With respect to the retail business of the Issuer, such risk takes the form of lending risk which arises
when the Issuer grants a loan to a client. This is the most common risk category and includes term
loans, mortgages, revolving credit facilities, overdrafts and other types of financial liabilities. The
Issuer’s retail business focuses on residential mortgage lending which is mainly owner occupied
lending.

As regards its institutional business, the Issuer distinguishes between issuer and counterparty risk and
settlement risk. Issuer risk is the credit default risk that is associated with the Issuer’s investments in
bonds, commercial papers, securitisations, and other similar securities. Investment risk arises when the
Issuer purchases securities with the intention to hold them for a longer period of time (generally
through maturity). According to the Issuer’s investment strategy, credit risk exists in the form of issuer
and counterparty risk with swaps, security and money market transactions with central and local
governments, credit institutions, central banks and supranational institutions even if their credit
standing is regarded as above average on the basis of the assessment by external rating agencies and
also according to internally-used rating procedures. The issuer and counterparty risk also includes the
                                                    - 39 -


replacement risk, i.e. the risk of loss of the Issuer resulting from the necessity to replace a cancelled or
defaulted transaction.

Settlement risk arises when the punctual payment or delivery of securities or other assets is not
procured. In this case there is the risk that the securities or other assets need to be re-purchased,
potentially at higher market values, and the risk of losses in case of payments without delivery.

Country Risk
The Issuer is exposed to country risk in the context of its non-retail business only. Country risk means
the risk of loss by the Issuer attributable to events in a specific country (or group of countries), such as
political or social unrest, nationalisation and non-recognition of foreign debt by governments. The
country risk also consists of transfer, conversion, devaluation or invalidation risk as well as the risk of
loss by the Issuer due to currency exchange restrictions.

Operational Risks
Operational Risks are defined as the risks of losses resulting from insufficient or failing internal
procedures, people or systems (e.g. failure of data processing systems, fraud, human error, failed
processes, structural weaknesses, insufficient monitoring) or which may be caused by external
influences (criminal acts, natural disasters etc.). In case of the Issuer, the definition of operational risks
includes legal risk.

IT Risk
The Issuer’s businesses depend on the ability to process a large number of transactions efficiently and
accurately. Losses can result from inadequate personnel, IT failures, inadequate or failed internal
control processes and systems, regulatory breaches, human errors, employee misconduct including
fraud, or from external events that interrupt normal business operations. The Issuer depends on the
secure processing, storage and transmission of confidential and other information in its computer
systems and networks. Computer systems and networks may have insufficient recovery capabilities in
the event of a malfunction or loss of data. In addition, such systems and networks may be vulnerable to
unauthorised access, computer viruses or other malicious code and other external attacks or internal
breaches that could have a security impact and jeopardize confidential information or that of the
Issuer’s clients or counterparts.

Legal Risk
In the case of the Issuer, legal risk is particularly related to the contractual arrangements the Issuer
entered into and to the legal and regulatory environment in which the Issuer operates its business.
Furthermore, the Issuer may become party of judicial, arbitration and regulatory proceedings, the
result of which is generally uncertain. The results of operations and the financial condition of the
Issuer could be adversely affected by an unexpected outcome of any judicial, arbitration and regulatory
proceedings or by changes in the legal and regulatory environment in which the Issuer operates.

Other Risks

Reputational Risk
Reputational risks may mainly arise when internal processes or operations do not work properly. The
Issuer's reputation is critical in maintaining its relationships with its clients and if its trustworthiness
were to be damaged, the Issuer’s business, results of operations and financial condition could be
materially adversely affected.
Model Risk
Model risks represent a theoretical risk which can occur in case of substantially deviating observed
figures compared to predicted values.
Risk Concentration
Due to the business strategy with a focus on retail business the Issuer has deliberately decided to take
certain concentrations on product level in the retail segments.
                                                     - 40 -


The Issuer has defined specific product features and setting of maximum amounts for limits, exposures
and maturities aiming at managing concentrations within the retail portfolio.
With respect to the institutional business which includes the Issuer’s fixed income investments, mainly
government and government-related bonds, Pfandbriefe and other covered bonds, securitsations such
as Asset Backed Securities ("ABS") and Mortgage Backed Securities ("MBS") as well as its short-term
liquidity management operations, investments in Germany play the most important role.
Engagements with governments and government related entities in Greece, Spain, Italy and Hungary
have been decreased during 2011 by 62% based on nominal values to less than nominal Euro 0.6
billion as at 31 December 2011. The Issuer does not hold any corresponding investments with Portugal
and Ireland. Overall engagements in the above mentioned European peripheral countries and Hungary
amount to 4.3% of total credit portfolio based on nominal values as at 31 December 2011.
Concentration risks exist also due to the concentration of transactions with certain counterparties, in
particular within ING Group.
The commercial banking activities mainly focus on Germany followed by exposures in non-EU
countries. The latter relates mainly to structured export finance activities which are covered by 95% by
governmental Export Credit Agencies (e.g. Hermes Cover).
Concentrations are analysed and monitored on regular basis. Objective of risk management activities is
to identify potential risk concentrations and to explore possibilities for diversification.
Risks relating to increased Regulation in the Financial Markets
As a response to the crisis in the financial markets, most jurisdictions have imposed increased
regulations and implemented measures to prevent future financial crises or diminish their effects; such
implemented or planned regulations and measures may lead to additional costs.
Furthermore, the Basel Committee on Banking Supervision issued the Basel III rules, a comprehensive
set of reform measures to strengthen the regulation, supervision and risk management of the banking sector.
The framework sets out higher and better-quality capital requirements and also introduces two global
minimum standards for funding liquidity: the Liquidity Coverage Ratio (LCR), aiming to promote short-
term resilience of a bank’s liquidity risk profile by ensuring that it has sufficient high-quality liquid assets
to survive a significant stress scenario lasting for one month, and the Net Stable Funding Ratio (NSFR) that
has a time horizon of one year and has been developed to provide a sustainable maturity structure of assets
and liabilities. These rules may result in an increasing demand in equity and liquidity and/or additional
costs and may affect the Issuer’s profitability.
                                                - 41 -


                                                                         Part C of the Base Prospectus
                                                                              Responsibility Statement

                                 RESPONSIBILITY STATEMENT

ING-DiBa AG with its registered address at Theodor-Heuss-Allee 106, 60468 Frankfurt am Main,
Germany, assumes responsibility for the content of this Base Prospectus pursuant to § 5 (4) of the WpPG
and declares that information contained in this Base Prospectus is to the best of its knowledge in
accordance with the facts and that no material circumstances have been omitted.
                                                    - 42 -


                                                                               Part D of the Base Prospectus
                                                                                            Important Notice

                                          IMPORTANT NOTICE

No person is authorised to give any information or to make any representation regarding the Issuer or the
Pfandbriefe not contained in or not consistent with this Base Prospectus or any other document entered into
in relation to the Programme or any information supplied by the Issuer or such other information as is in the
public domain and, if given or made, such information or representation must not be relied upon as having
been authorised by or on behalf of the Issuer, the Arranger or by any of the Dealers.

This Base Prospectus should be read and construed with any supplement thereto and with any other
documents incorporated by reference and, in relation to any Series of Pfandbriefe, should be read and
construed together with the relevant Final Terms.

Neither the delivery of this Base Prospectus or any Final Terms nor the offering, sale or delivery of any
Pfandbrief shall, in any circumstances, create any implication (i) that the information contained in this Base
Prospectus is true subsequent to the date thereof or the date upon which this Base Prospectus has been most
recently supplemented or (ii) that there has been no adverse change in the financial situation of the Issuer
since the date thereof or, as the case may be, the date upon which this Base Prospectus has been most
recently supplemented or (iii) that the balance sheet for the financial year ended 31 December 2011 or any
other information supplied in connection with the Programme is correct at any time subsequent to the date
on which it is supplied or, if different, the date indicated in the document containing the same. Should
however a material change occur in relation to the information contained in, or incorporated into, this Base
Prospectus or an adverse change occur in the financial situation of the Issuer since the date hereof or, as the
case may be, the date upon which this Base Prospectus has been most recently supplemented, the Issuer
will promptly procure that this Base Prospectus will be supplemented pursuant to § 16 of the German
Securities Prospectus Act (Wertpapierprospektgesetz).

Neither the Arranger nor any of the Dealers make any representation or warranty, express or implied, as to
the accuracy or completeness of the information in this Base Prospectus. Each person receiving this Base
Prospectus acknowledges that such person has not relied on the Arranger, the Dealers or any person
affiliated with the Arranger or the Dealers in connection with its investigation of the accuracy of such
information or its investment decision. Each person contemplating making an investment in the Pfandbriefe
must make its own investigation and analysis of the creditworthiness of the Issuer and its own
determination of the suitability of any such investment, with particular reference to its own investment
objectives and experience, and any other factors which may be relevant to it in connection with such
investment.

This Base Prospectus does not constitute an offer of or an invitation by or on behalf of the Issuer or the
Dealers to subscribe or purchase any of the Pfandbriefe. The distribution of this Base Prospectus and of any
Final Terms and the offering of the Pfandbriefe in certain jurisdictions may be restricted by law. Neither
the Issuer, nor the Arranger nor any of the Dealers represent that this document may be lawfully
distributed, or that the Pfandbriefe may be lawfully offered, in compliance with any applicable registration
or other requirements in any such jurisdiction or pursuant to an exemption available thereunder or assumes
any responsibility for facilitating any such distribution or offering. Accordingly, the Pfandbriefe may not be
offered or sold, directly or indirectly, and neither this document nor any advertisement or other offering
material may be distributed or published in any jurisdiction, except under circumstances that will result in
compliance with any applicable laws and regulations. Persons into whose possession the Base Prospectus
or any Final Terms comes are required by the Issuer, the Arranger and the Dealers to inform themselves
about and to observe any such restrictions. For a description of certain restrictions on offers, sales and
deliveries of Pfandbriefe and on the distribution of the Base Prospectus or any Final Terms and other
offering material relating to the Pfandbriefe, see "Subscription and Sale". In particular, Pfandbriefe have
not been and will not be registered under the United States Securities Act of 1933 (as amended) and
may include Pfandbriefe which are subject to U.S. tax law requirements. Subject to certain
exceptions, Pfandbriefe may not be offered, sold or delivered within the United States or to U.S.
                                                   - 43 -


persons.

Neither the Base Prospectus nor any Final Terms may be used for the purpose of an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to
any person to whom it is unlawful to make such an offer or solicitation.

In connection with the issue and distribution of any Tranche of Pfandbriefe under the Programme, the
Dealer(s) who is/are specified in the relevant Final Terms as the stabilising manager(s) (or persons acting
on its/their behalf) may over-allot Pfandbriefe or effect transactions with a view to supporting the market
price of the Pfandbriefe at a level higher than that which might otherwise prevail. However, there is no
assurance that such Dealer(s) (or any person acting on its/their behalf) will undertake stabilisation action.
Any stabilisation action may begin at any time after the adequate public disclosure of the Final Terms of
the offer of Pfandbriefe is made and, if begun, may be ended at any time, but it must end no later than the
earlier of 30 days after the Issue Date and 60 days after the date of the allotment of the Pfandbriefe.

Any such stabilisation action so taken will be, in all material respects, permitted by or otherwise in
accordance with all relevant requirements applicable to such actions in the jurisdictions where such
actions are effected (including rules and other regulatory requirements governing any stock
exchange where such Pfandbriefe are listed).

Pfandbriefe may be issued in Euro only. In this Base Prospectus all references to "EUR", "€", "Euro" and
"euro" are to the single currency which was introduced as of 1 January 1999 with the start of the third stage
of the European Economic and Monetary Union by which date the euro became the legal currency in
(initially) eleven member states of the European Union.
                                                   - 44 -


                                                                         Part E of the Base Prospectus
                                                               Terms and Conditions of the Pfandbriefe
                                                                              and Related Information

                        TERMS AND CONDITIONS OF THE PFANDBRIEFE
                                         AND
                                 RELATED INFORMATION

The information contained in this part "Terms and Conditions of the Pfandbriefe and Related Information"
includes the following parts relating to the terms and conditions of the Pfandbriefe:

E.I.     General Information applicable to the Pfandbriefe

E.II.    Terms and Conditions of the Pfandbriefe

E.III.   Terms and Conditions of the Jumbo-Pfandbriefe

E.IV.    Form of Final Terms (Endgültige Bedingungen)
                                                      - 45 -


                                                                              Part E.I. of the Base Prospectus
                                                                              General Information applicable
                                                                                             to the Pfandbriefe

                 GENERAL INFORMATION APPLICABLE TO THE PFANDBRIEFE

General

The Issuer and the relevant Dealer(s) will agree on the terms and conditions applicable to each particular
Tranche of Pfandbriefe (the "Conditions"). The Conditions will be constituted by the Terms and
Conditions of the Pfandbriefe set forth below (the "Terms and Conditions") as completed by the
provisions of the Final Terms (the "Final Terms"). The Final Terms relating to each Tranche of
Pfandbriefe will specify:

–         whether the Conditions are to be Long-Form Conditions or Integrated Conditions (each as
          described below); and

–         whether the Conditions will be in the German language or the English language or both (and, if
          both, whether the German language version or the English language version is prevailing).

As to whether Long-Form Conditions or Integrated Conditions will apply, the Issuer anticipates that:

–         Long-Form Conditions will generally be used for Pfandbriefe sold on a non-syndicated basis and
          which are not publicly offered; and

–         Integrated Conditions will generally be used for Pfandbriefe sold and distributed on a syndicated
          basis. Integrated Conditions will be required where the Pfandbriefe are to be publicly offered, in
          whole or in part, or to be listed on a stock exchange.

As to the controlling language of the respective Conditions, the Issuer anticipates that, in general, subject to
any stock exchange or legal requirements applicable from time to time, and unless otherwise agreed
between the Issuer and the relevant Dealer(s):

–         in the case of Pfandbriefe sold and distributed on a syndicated basis, German will be the prevailing
          language;

–         in the case of Pfandbriefe sold and distributed on a non-syndicated basis, and/or in case of a private
          placement, English or German may be the prevailing language.

In any case, the relevant Final Terms will indicate which language shall be binding or whether the Terms
and Conditions of the Pfandbriefe and the Final Terms shall be drafted in English or German only.

Long-Form Conditions

If the Final Terms specify that Long-Form Conditions are to apply to the Pfandbriefe, the provisions of the
applicable Final Terms and the Terms and Conditions, taken together, shall constitute the Conditions. Such
Conditions will be constituted as follows:

–         the blanks in the provisions of the Terms and Conditions which are applicable to the Pfandbriefe
          will be deemed to be completed by the information contained in the Final Terms as if such
          information were inserted in the blanks of such provisions;
                                                   - 46 -


–       the Terms and Conditions will be completed by the text of any provisions of the Final Terms
        completing, in whole or in part, the provisions of the Terms and Conditions;

–       alternative or optional provisions of the Terms and Conditions as to which the corresponding
        provisions of the Final Terms are not completed or are deleted will be deemed to be deleted from
        the Conditions; and

–       all instructions and explanatory notes set out in square brackets in the Terms and Conditions and
        any footnotes and explanatory text in the Final Terms will be deemed to be deleted from the
        Conditions.

Where Long-Form Conditions apply, each global note representing the Pfandbriefe of the relevant Series
will have the Final Terms and the Terms and Conditions attached.

Integrated Conditions

If the Final Terms specify that Integrated Conditions are to apply to the Pfandbriefe, the Conditions in
     respect of such Pfandbriefe will be constituted as follows: – all of the blanks in all applicable
     provisions of the Terms and Conditions will be completed according to the information contained in
     the Final Terms and all non-applicable provisions of the Terms and Conditions (including the
     instructions and explanatory notes set out in square brackets) will be deleted.

Where Integrated Conditions apply, the Integrated Conditions alone will constitute the Conditions. The
Integrated Conditions will be attached to each global note representing Pfandbriefe of the relevant Series of
Pfandbriefe.
                                                            - 47 -


                                                                                  Part E.II. of the Base Prospectus
                                                                                   Base Prospectus setting out the
                                                                           Terms and Conditions of the Pfandbriefe


                           TERMS AND CONDITIONS OF THE PFANDBRIEFE
                                 - German and English Language Version -
                            EMISSIONSBEDINGUNGEN FÜR PFANDBRIEFE
                                    - Deutsche und englische Fassung –
         GERMAN LANGUAGE VERSION                                         ENGLISH LANGUAGE VERSION
           (DEUTSCHE FASSUNG DER
          EMISSIONSBEDINGUNGEN)
Im Hinblick auf diese Serie [Seriennummer einfügen]          ING-DiBa AG will act as fiscal agent (the "Fiscal Agent",
von Pfandbriefen übernimmt die ING-DiBa AG die               which expression shall include any successor fiscal agent
Funktion der Emissionsstelle (die "Emissionsstelle",         appointed by ING-DiBa AG and notified to the Holders in
wobei dieser Begriff eine durch die ING-DiBa AG              accordance with § 10 of the Terms and Conditions) in
bestellte und den Gläubigern gemäß § 10 der                  relation to this Series [insert series number] of Pfandbriefe.
Emissionsbedingungen bekannt gegebene Nachfolgerin
in dieser Funktion einschließt).
[Bei nicht-konsolidierten Bedingungen, wenn die              [In the case of Long-Form Conditions, if the Terms and
Emissionsbedingungen     und    die    Endgültigen           Conditions and Final Terms are to be attached, insert:
Bedingungen beigefügt werden sollen, einfügen:
Die Bestimmungen dieser Emissionsbedingungen                 The provisions of these Terms and Conditions apply to the
gelten für diese Pfandbriefe so, wie sie durch die           Pfandbriefe as completed, in whole or in part, by the terms of
beigefügten Endgültigen Bedingungen vervollständigt          the Final Terms attached hereto.
werden.
Die Leerstellen in den anwendbaren Bestimmungen              The blanks in the provisions of these Terms and Conditions
dieser Emissionsbedingungen gelten als durch die in          which are applicable shall be deemed to be completed by the
den Endgültigen Bedingungen enthaltenen Angaben              information contained in the Final Terms as if such
ausgefüllt, so als ob die Leerstellen in den betreffenden    information were inserted in the blanks of such provisions.
Bestimmungen durch diese Angaben ausgefüllt wären.
Alternative oder wählbare Bestimmungen dieser                Alternative or optional provisions of these Terms and
Emissionsbedingungen, deren Entsprechungen in den            Conditions as to which the corresponding provisions of the
Endgültigen Bedingungen nicht ausdrücklich ausgefüllt        Final Terms are not completed or are deleted shall be deemed
oder die gestrichen sind, gelten als aus diesen              to be deleted from these Terms and Conditions.
Emissionsbedingungen gestrichen.
Sämtliche auf die Pfandbriefe nicht anwendbaren              All provisions of these Terms and Conditions which are not
Bestimmungen        dieser    Emissionsbedingungen           applicable to the Pfandbriefe (including instructions,
(einschließlich der Anweisungen, Anmerkungen und             explanatory notes and text set out in square brackets) shall be
der Texte in eckigen Klammern) gelten als aus diesen         deemed to be deleted from these Terms and Conditions, as
Emissionsbedingungen gestrichen, so dass die                 required to give effect to the terms of the Final Terms.
Bestimmungen der Endgültigen Bedingungen Geltung
erhalten.
Kopien der Endgültigen Bedingungen sind kostenlos            Copies of the Final Terms may be obtained free of charge at
bei der bezeichneten Geschäftsstelle der Emittentin und      the specified office of the Issuer and at the specified office of
bei den bezeichneten Geschäftsstellen einer jeden            any Paying Agent provided that, in the case of Pfandbriefe
Zahlstelle erhältlich; bei nicht an einer Börse notierten    which are not listed on any stock exchange and which are not
Pfandbriefe und die nicht im Wege eines öffentlichen         publicly offered, copies of the relevant Final Terms will only
Angebotes platziert werden, sind Kopien der                  be available to holders of such Pfandbriefe.]
betreffenden Endgültigen Bedingungen allerdings
ausschließlich für die Gläubiger solcher Pfandbriefe
erhältlich.]
                                                        - 48 -


               §1                                                                §1
WÄHRUNG, FESTGELEGTE STÜCKELUNG,                                 CURRENCY, SPECIFIED DENOMINATION,
      FORM, DEFINITIONEN                                                       FORM,
                                                                       CERTAIN DEFINITIONS

(1) Währung. Festgelegte Stückelung. Diese Serie           (1) Currency. Specified Denomination. This Series of
von Hypothekenpfandbriefen (die "Pfandbriefe")             Mortgage Pfandbriefe (Hypothekenpfandbriefe) (the
der ING-DiBa AG (die "Emittentin") wird in Euro            "Pfandbriefe") of ING-DiBa AG (the "Issuer") is being
(die "Festgelegte Währung") im Gesamtnennbetrag            issued in Euro (the "Specified Currency") in the
von [Gesamtnennbetrag einfügen] (in Worten:                aggregate principal amount of [insert aggregate principal
[Gesamtnennbetrag in Worten einfügen]) in                  amount] (in words: [insert aggregate principal amount
Festgelegten    Stückelungen   von   [Festgelegte          in words]) in Specified Denomination of [insert
Stückelung       einfügen]   (die    "Festgelegte          Specified       Denomination]         (the     "Specified
Stückelung") begeben.]                                     Denomination").]

(2) Form. Die Pfandbriefe lauten auf den Inhaber.          (2) Form. The Pfandbriefe are being issued in bearer form.

[Bei    Pfandbriefen,    die      durch      eine          [In the case of Pfandbriefe which are exclusively
Dauerglobalurkunde verbrieft sind, einfügen:               represented by a Permanent Global Note insert:

(3) Dauerglobalurkunde. Die Pfandbriefe sind durch         (3) Permanent Global Note. The Pfandbriefe are
eine             Dauerglobalurkunde              (die      represented by a permanent global note (the "Permanent
"Dauerglobalurkunde") ohne Zinsscheine verbrieft.          Global Note") without coupons. The Permanent Global
Die Dauerglobalurkunde trägt die eigenhändigen oder        Note shall be signed manually or in facsimile by two
faksimilierten Unterschriften zweier ordnungsgemäß         authorised signatories of the Issuer and the public
bevollmächtigter Vertreter der Emittentin sowie des        fiduciary appointed by the Federal Financial Services
von           der          Bundesanstalt          für      Supervisory       Authority       (Bundesanstalt        für
Finanzdienstleistungsaufsicht bestellten staatlichen       Finanzdienstleistungsaufsicht). Definitive Pfandbriefe and
Treuhänders. Einzelurkunden und Zinsscheine                coupons will not be issued.]
werden nicht ausgegeben.]

[Bei Pfandbriefen, die anfänglich durch eine               [In the case of Pfandbriefe which are initially
vorläufige  Globalurkunde    verbrieft  sind,              represented by a Temporary Global Note insert:
einfügen:

(3) Vorläufige Globalurkunde – Austausch                   (3) Temporary Global Note – Exchange

((a) Die Pfandbriefe sind anfänglich durch eine            (a) The Pfandbriefe are initially represented by a
vorläufige    Globalurkunde     (die    "Vorläufige        temporary global note (the "Temporary Global Note")
Globalurkunde") ohne Zinsscheine verbrieft. Die            without coupons. The Temporary Global Note will be
Vorläufige Globalurkunde wird gegen Pfandbriefe in         exchangeable for Pfandbriefe in Specified Denominations
den Festgelegten Stückelungen, die durch eine              represented by a permanent global note (the "Permanent
Dauerglobalurkunde (die "Dauerglobalurkunde")              Global Note") without coupons. The Temporary Global
ohne Zinsscheine verbrieft sind, ausgetauscht. Die         Note and the Permanent Global Note shall each be signed
Vorläufige        Globalurkunde        und       die       manually or in facsimile by two authorised signatories of
Dauerglobalurkunde tragen jeweils die eigenhändigen        the Issuer and the public fiduciary appointed by the
oder     faksimilierten    Unterschriften    zweier        Federal Financial Services Supervisory Authority
ordnungsgemäß bevollmächtigter Vertreter der               (Bundesanstalt      für     Finanzdienstleistungsaufsicht).
Emittentin sowie des von der Bundesanstalt für             Definitive Pfandbriefe and coupons will not be issued.
Finanzdienstleistungsaufsicht bestellten staatlichen
Treuhänders. Einzelurkunden und Zinsscheine
werden nicht ausgegeben.

(b) Die Vorläufige Globalurkunde wird an einem Tag         ((b) The Temporary Global Note shall be exchanged for
(der "Austauschtag"), der nicht weniger als 40 Tage        the Permanent Global Note on a date (the "Exchange
nach dem Tag der Ausgabe der Vorläufigen                   Date") not earlier than 40 days after the date of issue of
Globalurkunde       liegen   darf,     gegen     die       the Temporary Global Note. Such exchange shall only be
Dauerglobalurkunde ausgetauscht. Ein solcher               made upon delivery of certifications to the effect that the
Austausch      darf    nur  nach     Vorlage    von        beneficial owner or owners of the Pfandbriefe represented
Bescheinigungen erfolgen, wonach der oder die              by the Temporary Global Note is not a U.S. person (other
wirtschaftlichen Eigentümer der durch die Vorläufige       than certain financial institutions or certain persons
Globalurkunde verbrieften Pfandbriefe keine U.S.-          holding Pfandbriefe through such financial institutions).
                                                         - 49 -


Personen      sind     (ausgenommen         bestimmte       Payment of interest on Pfandbriefe represented by a
Finanzinstitute oder bestimmte Personen, die                Temporary Global Note will be made only after delivery
Pfandbriefe über solche Finanzinstitute halten).            of such certifications. A separate certification shall be
Zinszahlungen      auf   durch     eine    Vorläufige       required in respect of each such payment of interest. Any
Globalurkunde verbriefte Pfandbriefe erfolgen erst          such certification received on or after the 40th day after
nach Vorlage solcher Bescheinigungen. Eine                  the date of issue of the Temporary Global Note will be
gesonderte Bescheinigung ist hinsichtlich einer jeden       treated as a request to exchange such Temporary Global
solchen      Zinszahlung       erforderlich.      Jede      Note pursuant to subparagraph (b) of this § 1 (3). Any
Bescheinigung, die am oder nach dem 40. Tag nach            securities delivered in exchange for the Temporary Global
dem Tag der Ausgabe der Vorläufigen                         Note shall be delivered only outside of the United States
Globalurkunde eingeht, wird als ein Ersuchen                (as defined in § 4 (3)).]
behandelt werden, diese Vorläufige Globalurkunde
gemäß Absatz (b) dieses § 1 (3) auszutauschen.
Wertpapiere, die im Austausch für die Vorläufige
Globalurkunde geliefert werden, sind nur außerhalb
der Vereinigten Staaten (wie in § 4 (3) definiert) zu
liefern.]

(4) Clearing System. [Jede Vorläufige Globalurkunde         (4) Clearing System. [Each Temporary Global Note (if it
(falls diese nicht ausgetauscht wird) und/oder jede         will not be exchanged) and/or Permanent Global Note]
Dauerglobalurkunde] [Die Dauerglobalurkunde] wird           [The Permanent Global Note] will be kept in custody by or
solange von einem oder im Namen eines Clearing              on behalf of a Clearing System until all obligations of the
Systems verwahrt, bis sämtliche Verbindlichkeiten           Issuer under the Pfandbriefe have been satisfied.
der Emittentin aus den Pfandbriefen erfüllt sind.           "Clearing System" means the following: Clearstream
"Clearing System" bedeutet Folgendes: Clearstream           Banking AG, Frankfurt am Main ("CBF") or any
Banking AG, Frankfurt am Main ("CBF") oder jeder            successor in respect of the functions performed by the
Funktionsnachfolger.                                        Clearing System.

(5) Gläubiger von Pfandbriefen. "Gläubiger"                 (5) Holder of Pfandbriefe. "Holder" means any holder of
bezeichnet jeden Inhaber eines Miteigentumsanteils          a proportionate co-ownership or other beneficial interest
oder anderen Rechts an den Pfandbriefen.                    or right in the Pfandbriefe.


[(6)]     In   diesen    Bedingungen    bezeichnet          [(6)] In these Conditions, "Business Day" means a day
"Geschäftstag" einen Tag (außer einem Samstag               which is a day (other than a Saturday or a Sunday) on
oder Sonntag), an dem (i) das Clearing System und           which both (i) the Clearing System, and (ii) the Trans-
(ii) das Trans-European Automated Real-Time Gross           European Automated Real-Time Gross Settlement Express
Settlement Express Transfer System 2 oder ein               Transfer System 2 or any successor system thereto
Nachfolgesystem (TARGET) Zahlungen abwickeln.               (TARGET) settle payments.

                        §2                                                            §2
                      STATUS                                                        STATUS

Die Pfandbriefe begründen nicht nachrangige                 The obligations under the Pfandbriefe constitute
Verbindlichkeiten der Emittentin, die untereinander         unsubordinated obligations of the Issuer ranking pari
gleichrangig sind. Die Pfandbriefe sind nach                passu among themselves. The Pfandbriefe are covered in
Maßgabe des deutschen Pfandbriefgesetzes gedeckt            accordance with the German Pfandbrief Act
und stehen mindestens im gleichen Rang mit allen            (Pfandbriefgesetz) and rank at least pari passu with all
anderen Verpflichtungen der Emittentin aus                  other unsecured and unsubordinated present and future
Hypothekenpfandbriefen.                                     obligations of the Issuer under Mortgage Pfandbriefe
                                                            (Hypothekenpfandbriefe).
                                                                   - 50 -



                          §3                                                                     §3
                        ZINSEN                                                                INTEREST

[(A)   Bei       festverzinslichen         Pfandbriefen             [(A) In the case of Fixed Rate Pfandbriefe insert:
einfügen:

(1) Zinssatz und Zinszahlungstage. Die                              (1) Rate of Interest and Interest Payment Dates. The
Pfandbriefe werden bezogen auf ihre Festgelegte                     Pfandbriefe shall bear interest on their Specified
Stückelung      verzinst,    und    zwar     vom                    Denomination at the rate of [insert Rate of Interest]
[Verzinsungsbeginn           einfügen]       (der                   per cent. per annum from (and including) [insert
"Verzinsungsbeginn") (einschließlich) bis zum                       Interest Commencement Date] (the "Interest
Fälligkeitstag (wie in § 5 (1) definiert)                           Commencement Date") to (but excluding) the
(ausschließlich) mit jährlich [Zinssatz einfügen]                   Maturity Date (as defined in § 5 (1)).
%.


Die      Zinsen       sind    nachträglich     am                   Interest shall be payable in arrear on [insert Fixed
[Festzinstermin(e) einfügen] eines jeden Jahres,                    Interest Date or Dates] in each year (each such date,
vorbehaltlich einer Verschiebung gemäß § 4 (5),                     an "Interest Payment Date"), subject to postponement
zahlbar (jeweils ein "Zinszahlungstag"). Die erste                  in accordance with § 4 (5). The first payment of
Zinszahlung erfolgt am [ersten Zinszahlungstag                      interest shall, subject to postponement in accordance
einfügen]) vorbehaltlich einer Verschiebung                         with § 4 (5), be made on [insert First Interest
gemäß § 4 (5) [sofern der erste Zinszahlungstag                     Payment Date] [if First Interest Payment Date is not
nicht       der      erste      Jahrestag      des                  first anniversary of Interest Commencement Date
Verzinsungsbeginns ist, einfügen: und beläuft                       insert: and will amount to [insert Initial Broken
sich auf [anfänglichen Bruchteilszinsbetrag pro                     Amount per Specified Denomination] per Pfandbrief
Festgelegte Stückelung einfügen] je Pfandbrief in                   in a Specified Denomination of [insert Specified
einer Festgelegten Stückelung von [Festgelegte                      Denomination]]. [If the Maturity Date is not a Fixed
Stückelung        einfügen]].     [Sofern      der                  Interest Date insert: Interest in respect of the period
Fälligkeitstag kein Festzinstermin ist, einfügen:                   from [insert Fixed Interest Date preceding the
Die Zinsen für den Zeitraum vom [den letzten                        Maturity Date] (inclusive) to the Maturity Date
dem          Fälligkeitstag       vorausgehenden                    (exclusive) will amount to [insert Final Broken
Festzinstermin einfügen] (einschließlich) bis zum                   Amount per Specified Denomination] per Pfandbrief
Fälligkeitstag (ausschließlich) belaufen sich auf                   in a Specified Denomination of [insert Specified
[abschließenden        Bruchteilzinsbetrag     pro                  Denomination]. [If Actual/Actual (ICMA) insert:
Festgelegte Stückelung einfügen] je Pfandbrief in                   The number of Interest Payment Dates per calendar
einer Festgelegten Stückelung von [Festgelegte                      year (each a "Determination Date") is [insert number
Stückelung einfügen] je Pfandbrief in einer                         of regular Interest Payment Dates per calendar
Festgelegten Stückelung von [weitere Festgelegte                    year]].
Stückelungen einfügen]. [Im Fall von
Actual/Actual (ICMA) einfügen: Die Anzahl der
Zinszahlungstage im Kalenderjahr (jeweils ein
"Feststellungstermin") beträgt [Anzahl der
regulären Zinszahlungstage im Kalenderjahr
einfügen]].

(2) Zinslauf. Der Zinslauf der Pfandbriefe endet an                 (2) Accrual of Interest. The Pfandbriefe shall cease to
dem Tag, der dem Tag vorangeht, an dem sie zur                      bear interest from the date preceding their due date for
Rückzahlung fällig werden. Falls die Emittentin                     redemption. If the Issuer shall fail to redeem the
die Pfandbriefe bei Fälligkeit nicht einlöst, endet                 Pfandbriefe when due, interest shall continue to accrue
die Verzinsung der ausstehenden Pfandbriefe nicht                   on the outstanding Pfandbriefe beyond the due date
am Tag der Fälligkeit, sondern erst an dem Tag,                     until the date preceding the date of actual redemption
der dem Tag der tatsächlichen Rückzahlung der                       of the Pfandbriefe. The applicable rate of interest will
Pfandbriefe vorangeht. Der maßgebliche Zinssatz                     be the default rate of interest established by law1.
ist der gesetzlich festgelegte Satz für
Verzugszinsen1.

1
     The default rate of interest established by law is five percentage points above the basic rate of interest published by Deutsche Bundesbank
     from time to time, §§ 288 paragraph 1, 247 paragraph 1 German Civil Code (BGB).
     Der gesetzliche Verzugszinssatz beträgt für das Jahr fünf Prozentpunkte über dem von der Deutsche Bundesbank von Zeit zu Zeit
     veröffentlichten Basiszinssatz, §§ 288 Abs. 1, 247 Abs. 1 BGB.
                                                      - 51 -



(3) Unterjährige Berechnung der Zinsen. Sofern        (3) Calculation of Interest for Partial Periods. If
Zinsen für einen Zeitraum von weniger als einem       interest is required to be calculated for a period of less
Jahr zu berechnen sind, erfolgt die Berechnung auf    than a full year, such interest shall be calculated on the
der Grundlage des Zinstagequotienten (wie             basis of the Day Count Fraction (as defined below).]
nachstehend definiert).]

[(B) Bei variabel verzinslichen Pfandbriefen          [(B) In the case of Floating Rate Pfandbriefe insert:
einfügen:

(1) Zinszahlungstage.                                 (1) Interest Payment Dates.

(a) Die Pfandbriefe werden bezogen auf ihre           (a) The Pfandbriefe bear interest on their respective
Festgelegte       Stückelung        ab       dem      Specified Denomination from [insert Interest
[Verzinsungsbeginn           einfügen]        (der    Commencement Date] (inclusive) (the "Interest
"Verzinsungsbeginn") (einschließlich) bis zum         Commencement Date") to the first Interest Payment
ersten Zinszahlungstag (ausschließlich) und           Date (exclusive) and thereafter from each Interest
danach        von      jedem      Zinszahlungstag     Payment Date (inclusive) to the next following Interest
(einschließlich)   bis     zum    nächstfolgenden     Payment Date (exclusive). Interest on the Pfandbriefe
Zinszahlungstag (ausschließlich) verzinst. Zinsen     shall be payable on each Interest Payment Date.
auf die Pfandbriefe sind an jedem Zinszahlungstag
zahlbar.

(b) "Zinszahlungstag" bedeutet, vorbehaltlich         (b) "Interest Payment Date" means, subject to
einer Verschiebung gemäß § 4 (5),                     postponement in accordance with § 4 (5),

[(i) [im Fall von festgelegten Zinszahlungstagen      [(i) [in the case of Specified Interest Payment Dates
ohne erster oder letzter langer Zinsperiode           without a long first or last interest period insert:
einfügen: jeder [festlegte Zinszahlungstage           each [insert Specified Interest Payment Dates]] [in
einfügen]] [im Fall einer langen ersten               case of a long first interest period insert: [insert first
Zinsperiode        einfügen:       der       [erste   Interest Payment Date] and thereafter [each] [insert
Zinszahlungstag einfügen] und danach [jeder]          Specified Interest Payment Date(s)] [in case of a
[der]     [festgelegte(r)      Zinszahlungstag(e)     long last interest period insert: each [insert Specified
einfügen]] [im Fall einer langen letzten              Interest Payment Dates], whereas the last payment of
Zinsperiode      einfügen:      jeder    [festlegte   interest preceding the Maturity Date shall be be made
Zinszahlungstage einfügen], wobei die letzte,         on [insert Interest Payment Date preceding the
dem Fälligkeitstag vorausgehende Zinszahlung am       Maturity Date].]
[Zinszahlungstag       einfügen,      der      dem
Fälligkeitstag vorausgeht] erfolgt].]

[(ii) im Fall von festgelegten Zinsperioden           [(ii) in the case of Specified Interest Periods insert:
einfügen: (soweit diese Emissionsbedingungen          each date which (except as otherwise provided in these
keine abweichenden Bestimmungen vorsehen)             Terms and Conditions) falls [insert number] [weeks]
jeweils der Tag, der [Zahl einfügen] [Wochen]         [months] [insert other specified periods] after the
[Monate] [andere        festgelegte   Zeiträume       preceding Interest Payment Date or, in the case of the
einfügen]     nach      dem       vorausgehenden      first Interest Payment Date, after the Interest
Zinszahlungstag liegt, oder im Falle des ersten       Commencement Date.]
Zinszahlungstages, nach dem Verzinsungsbeginn.]

(2) Zinssatz.      [Bei    Bildschirmfeststellung     (2) Rate of Interest. [In the case of Screen Rate
einfügen:                                             Determination insert:

Der Zinssatz (der "Zinssatz") für jede Zinsperiode    The rate of interest (the "Rate of Interest") for each
(wie nachstehend definiert) ist, sofern nachstehend   Interest Period (as defined below) will, except as
nichts Abweichendes bestimmt wird, entweder:          provided below, be either:

(a)   der    [relevante     Laufzeit      einfügen-   (a) the [insert relevant term-][EURIBOR®] [LIBOR]
][EURIBOR®-] [LIBOR-] Angebotssatz (wenn nur          offered quotation (if there is only one quotation on the
ein Angebotssatz auf der Bildschirmseite (wie         Screen Page (as defined below)); or
nachstehend definiert) angezeigt ist), oder
                                                         - 52 -



(b) das arithmetische Mittel (falls erforderlich, auf-   (b) the arithmetic mean (rounded if necessary to the
oder abgerundet auf das nächste ein [falls der           nearest one [if the Reference Rate is EURIBOR®
Referenzsatz      EURIBOR® ist,            einfügen:     insert: thousandth of a percentage point, with 0.0005]
Tausendstel Prozent, wobei 0,0005] [falls der            [if the Reference Rate is not EURIBOR® insert:
Referenzsatz nicht EURIBOR® ist, einfügen:               hundred-thousandth of a percentage point, with
Hunderttausendstel Prozent, wobei 0,000005]              0.000005] being rounded upwards) of the offered
aufgerundet wird) der Angebotssätze,                     quotations,

(ausgedrückt als Prozentsatz per annum) für              (expressed as a percentage rate per annum) for deposits
Einlagen in der festgelegten Währung für die             in the Specified Currency for that Interest Period which
jeweilige Zinsperiode, der bzw. die auf der              appears or appear, as the case may be, on the Screen
Bildschirmseite am Zinsfestlegungstag (wie               Page as of 11.00 a.m. ([Brussels] [London] time) on
nachstehend definiert) gegen 11.00 Uhr                   the Interest Determination Date (as defined below) [in
([Brüsseler] [Londoner] Ortszeit) angezeigt              the case of Margin insert: [plus] [minus] the Margin (as
werden [im Fall einer Marge einfügen: [zuzüglich]        defined below)], all as determined by the Calculation
[abzüglich] der Marge (wie nachstehend                   Agent.]
definiert)], wobei alle Festlegungen durch die
Berechnungsstelle erfolgen.]

"Zinsperiode" bezeichnet den Zeitraum von dem            "Interest Period" means each period from (and
Verzinsungsbeginn (einschließlich) bis zum ersten        including) the Interest Commencement Date to (but
Zinszahlungstag (ausschließlich) bzw. von jedem          excluding) the first Interest Payment Date and from
Zinszahlungstag (einschließlich) bis zum jeweils         (and including) each Interest Payment Date to (but
darauf folgenden Zinszahlungstag (ausschließlich.)       excluding) the following Interest Payment Date.

"Zinsfestlegungstag" bezeichnet den [zweiten]            "Interest Determination Date" means the [second]
[zutreffende andere Zahl von Tagen einfügen]             [insert other applicable number of days] [TARGET]
[TARGET-] [Londoner] [zutreffende andere                 [London] [insert other relevant reference] Business
Bezugnahmen einfügen] Geschäftstag vor Beginn            Day prior to the commencement of the relevant Interest
der jeweiligen Zinsperiode. [Im Fall eines               Period. [In case of a TARGET Business Day insert:
TARGET-Geschäftstages einfügen: "TARGET-                 "TARGET Business Day" means a day on which the
Geschäftstag" bezeichnet einen Tag, an dem das           Trans-European      Automated      Real-Time     Gross
Trans-European Automated Real-Time Gross                 Settlement Express Transfer System 2 or any successor
Settlement Express Transfer System 2 oder ein            system thereto (TARGET) is operating.] [In case of a
Nachfolgesystem (TARGET) betriebsbereit ist.]            non-TARGET Business Day insert: "[London]
[Im Fall eines anderen Geschäftstages als ein            [insert other relevant location] Business Day" means
TARGET-Geschäftstages                 einfügen:          a day which is a day (other than a Saturday or Sunday)
"[Londoner] [zutreffenden anderen Ort                    on which commercial banks are open for business
einfügen] Geschäftstag" bezeichnet einen Tag             (including dealings in foreign exchange and foreign
(außer einem Samstag oder Sonntag), an dem               currency) in [London] [insert other relevant
Geschäftsbanken in [London] [zutreffenden                location].]
anderen      Ort   einfügen]   für    Geschäfte
(einschließlich Devisen- und Sortengeschäfte)
geöffnet sind.]

[Im Fall einer Marge einfügen: Die "Marge"               [In the case of Margin insert: "Margin" means
beträgt [einfügen] % per annum.]                         [insert] per cent. per annum.]

"Bildschirmseite" bedeutet [Bildschirmseite              "Screen Page" means [insert relevant Screen Page]
einfügen] oder jede Nachfolgeseite.                      or any successor page thereto.

Wenn im vorstehenden Fall (b) auf der                    If, in the case of (b) above, five or more such offered
maßgeblichen Bildschirmseite fünf oder mehr              quotations are available on the Screen Page, the highest
Angebotssätze angezeigt werden, werden der               (or, if there is more than one such highest rate, only
höchste (falls mehr als ein solcher Höchstsatz           one of such rates) and the lowest (or, if there is more
angezeigt wird, nur einer dieser Sätze) und der          than one such lowest rate, only one of such rates) shall
niedrigste (falls mehr als ein solcher Niedrigstsatz     be disregarded by the Calculation Agent for the
angezeigt wird, nur einer dieser Sätze) von der          purposes of determining the arithmetic mean (rounded
Berechnungsstelle für die Bestimmung des                 as provided above) of such offered quotations and this
arithmetischen Mittels der Angebotssätze (das wie        rule shall apply throughout this paragraph (2).
vorstehend beschrieben auf- oder abgerundet wird)
                                                       - 53 -


außer Acht gelassen; diese Regel gilt entsprechend
für diesen gesamten Absatz (2).

Sollte die maßgebliche Bildschirmseite nicht zur       If the Screen Page is not available or if, in the case of
Verfügung stehen, oder wird im Fall von (a) kein       (a) above, no such quotation appears or, in the case of
Angebotssatz, oder werden im Fall von (b)              (b) above, fewer than three such offered quotations
weniger als drei Angebotssätze angezeigt (dort         appear, in each case as at such time, the Calculation
jeweils zur genannten Zeit), wird die                  Agent shall request the principal [Euro-Zone] [London]
Berechnungsstelle        von      der    [Londoner]    [insert other relevant location] office of each of the
[zutreffenden       anderen        Ort    einfügen]    Reference Banks (as defined below) to provide the
Hauptniederlassung jeder der Referenzbanken            Calculation Agent with its offered quotation (expressed
(wie nachstehend definiert) [in der Euro-Zone]         as a percentage rate per annum) for deposits in the
deren jeweilige Angebotssätze (jeweils als             Specified Currency for the relevant Interest Period to
Prozentsatz per annum ausgedrückt) für Einlagen        leading banks in the [London] [insert other relevant
in der Festgelegten Währung für die betreffende        location] interbank market [of the Euro-Zone] at
Zinsperiode gegenüber führenden Banken im              approximately 11.00 a.m. ([Brussels] [London] time)
[Londoner] [zutreffenden anderen Ort einfügen]         on the Interest Determination Date. If two or more of
Interbanken-Markt [in der Euro-Zone] um ca.            the Reference Banks provide the Calculation Agent
11.00 Uhr ([Londoner] [Brüsseler] Ortszeit) am         with such offered quotations, the Rate of Interest for
Zinsfestlegungstag anfordern. Falls zwei oder          such Interest Period shall be the arithmetic mean
mehr Referenzbanken der Berechnungsstelle              (rounded if necessary to the nearest one [if the
solche Angebotssätze nennen, ist der Zinssatz für      Reference Rate is EURIBOR® insert: thousandth of a
die betreffende Zinsperiode das arithmetische          percentage point, with 0.0005] [if the Reference Rate
Mittel (falls erforderlich, auf- oder abgerundet auf   is not EURIBOR® insert: hundred-thousandth of a
das nächste ein [falls der Referenzsatz                percentage point, with 0.000005] being rounded
EURIBOR® ist, einfügen: Tausendstel Prozent,           upwards) of such offered quotations [in the case of
wobei 0,0005] [falls der Referenzsatz nicht            Margin insert: [plus] [minus] the Margin], all as
EURIBOR® ist, einfügen: Hunderttausendstel             determined by the Calculation Agent.
Prozent, wobei 0,000005] aufgerundet wird) dieser
Angebotssätze [Im Fall einer Marge einfügen:
[zuzüglich] [abzüglich] der Marge], wobei alle
Festlegungen durch die Berechnungsstelle
erfolgen.

Falls an einem Zinsfestlegungstag nur eine oder        If on any Interest Determination Date only one or none
keine der Referenzbanken der Berechnungsstelle         of the Reference Banks provides the Calculation Agent
solche im vorstehenden Absatz beschriebenen            with such offered quotations as provided in the
Angebotssätze nennt, ist der Zinssatz für die          preceding paragraph, the Rate of Interest for the
betreffende Zinsperiode der Satz per annum, den        relevant Interest Period shall be the rate per annum
die Berechnungsstelle als das arithmetische Mittel     which the Calculation Agent determines as being the
(falls erforderlich, auf- oder abgerundet auf das      arithmetic mean (rounded if necessary to the nearest
nächste ein [falls der Referenzsatz EURIBOR®           one [if the Reference Rate is EURIBOR® insert:
ist, einfügen: Tausendstel Prozent, wobei 0,0005]      thousandth of a percentage point, with 0.0005] [if the
[falls der Referenzsatz nicht EURIBOR® ist,            Reference Rate is not EURIBOR® insert: hundred-
einfügen: Hunderttausendstel Prozent, wobei            thousandth of a percentage point, with 0.000005] being
0,000005] aufgerundet wird) der Angebotssätze          rounded upwards) of the rates, as communicated to
ermittelt, die die Referenzbanken bzw. zwei oder       (and at the request of) the Calculation Agent by the
mehrere von ihnen der Berechnungsstelle auf            Reference Banks or any two or more of them, at which
deren Anfrage als den jeweiligen Satz nennen, zu       such banks were offered, as at 11.00 a.m. ([Brussels]
dem ihnen um ca. 11.00 Uhr ([Brüsseler]                [London] time) on the relevant Interest Determination
[Londoner] Ortszeit) an dem betreffenden               Date, deposits in the Specified Currency for the
Zinsfestlegungstag Einlagen in der Festgelegten        relevant Interest Period by leading banks in the
Währung für die betreffende Zinsperiode von            [London] [insert the relevant location] interbank
führenden Banken im [Londoner] [zutreffenden           market [of the Euro-Zone] [in the case of Margin
anderen Ort einfügen] Interbanken-Markt [in der        insert: [plus] [minus] the Margin] or, if fewer than two
Euro-Zone] angeboten werden [Im Fall einer             of the Reference Banks provide the Calculation Agent
Marge einfügen: [zuzüglich] [abzüglich] der            with such offered rates, the offered rate for deposits in
Marge]; falls weniger als zwei der Referenzbanken      the Specified Currency for the relevant Interest Period,
der Berechnungsstelle solche Angebotssätze             or the arithmetic mean (rounded as provided above) of
nennen, dann ist der Zinssatz für die betreffende      the offered rates for deposits in the Specified Currency
Zinsperiode der Angebotssatz für Einlagen in der       for the relevant Interest Period, at which, on the
Festgelegten Währung für die betreffende               relevant Interest Determination Date, any one or more
                                                     - 54 -


Zinsperiode oder das arithmetische Mittel            banks (which bank or banks is or are in the opinion of
(gerundet    wie     oben     beschrieben)     der   the Calculation Agent and the Issuer suitable for such
Angebotssätze für Einlagen in der Festgelegten       purpose) inform(s) the Calculation Agent it is or they
Währung für die betreffende Zinsperiode, den         are quoting to leading banks in the [London] [insert
bzw. die eine oder mehrere Banken (die nach          the relevant location] interbank market [of the Euro-
Ansicht der Berechnungsstelle und der Emittentin     Zone] (or, as the case may be, the quotations of such
für diesen Zweck geeignet sind) der                  bank or banks to the Calculation Agent) [in the case of
Berechnungsstelle als Sätze bekannt geben, die sie   Margin insert: [plus] [minus] the Margin]. If the Rate
an dem betreffenden Zinsfestlegungstag gegenüber     of Interest cannot be determined in accordance with the
führenden Banken am [Londoner] [zutreffenden         foregoing provisions of this paragraph, the Rate of
anderen Ort einfügen] Interbanken-Markt [in der      Interest shall be the offered quotation or the arithmetic
Euro-Zone] nennen (bzw. den diese Banken             mean of the offered quotations on the Screen Page, as
gegenüber der Berechnungsstelle nennen) [Im Fall     described above, on the last day preceding the Interest
einer Marge einfügen: [zuzüglich] [abzüglich]        Determination Date on which such quotations were
der Marge]. Für den Fall, dass der Zinssatz nicht    offered [in the case of Margin insert: [plus] [minus]
gemäß den vorstehenden Bestimmungen dieses           the Margin (though substituting, where a different
Absatzes ermittelt werden kann, ist der Zinssatz     Margin is to be applied to the relevant Interest Period
der Angebotssatz oder das arithmetische Mittel der   from that which applied to the last preceding Interest
Angebotssätze auf der Bildschirmseite, wie           Period, the Margin relating to the relevant Interest
vorstehend beschrieben, an dem letzten Tag vor       Period in place of the Margin relating to that last
dem     Zinsfestlegungstag,    an    dem    diese    preceding Interest Period)].
Angebotssätze angezeigt wurden [Im Fall einer
Marge einfügen: [zuzüglich] [abzüglich] der
Marge (wobei jedoch, falls für die relevante
Zinsperiode eine andere Marge als für die
unmittelbar vorhergehende Zinsperiode gilt, die
relevante Marge an die Stelle der Marge für die
vorhergehende Zinsperiode tritt)].

"Referenzbanken" bezeichnen [falls in den            As used herein, "Reference Banks" means [if no other
Endgültigen Bedingungen keine anderen                Reference Banks are specified in the Final Terms,
Referenzbanken bestimmt werden, einfügen: im         insert:, in the case of (a) above, those offices of four of
vorstehenden Fall (a) diejenigen Niederlassungen     such banks whose offered rates were used to determine
von vier derjenigen Banken, deren Angebotssätze      such quotation when such quotation last appeared on
zur Ermittlung des maßgeblichen Angebotssatzes       the Screen Page and, in the case of (b) above, those
zu dem Zeitpunkt benutzt wurden, als solch ein       banks whose offered quotations last appeared on the
Angebot letztmals auf der maßgeblichen               Screen Page when no fewer than three such offered
Bildschirmseite angezeigt wurde, und im              quotations appeared] [if other Reference Banks are
vorstehenden Fall (b) diejenigen Banken, deren       specified in the Final Terms, insert names here].]
Angebotssätze zuletzt zu dem Zeitpunkt auf der
maßgeblichen Bildschirmseite angezeigt wurden,
als nicht weniger als drei solcher Angebotssätze
angezeigt wurden] [falls in den Endgültigen
Bedingungen andere Referenzbanken bestimmt
werden, sind sie hier einzufügen].]

[Im Fall des Interbanken-Marktes in der Euro-        [In case of the Interbank market in the Euro-Zone
Zone einfügen: "Euro-Zone" bezeichnet das            insert: "Euro-Zone" means the region comprised of
Gebiet      derjenigen    Mitgliedstaaten    der     those member states of the European Union that have
Europäischen Union, die gemäß dem Vertrag über       adopted, or will have adopted from time to time, the
die Gründung der Europäischen Gemeinschaft           single currency in accordance with the Treaty
(unterzeichnet in Rom am 25. März 1957),             establishing the European Community (signed in Rome
geändert durch den Vertrag über die Europäische      on 25 March 1957), as amended by the Treaty on
Union (unterzeichnet in Maastricht am 7. Februar     European Union (signed in Maastricht on 7 February
1992) und den Amsterdamer Vertrag vom 2.             1992) and the Amsterdam Treaty of 2 October 1997, as
Oktober 1997, in seiner jeweiligen Fassung, eine     further amended from time to time.]
einheitliche Währung eingeführt haben oder
jeweils eingeführt haben werden.]

[Sofern eine andere Methode der Feststellung         [If other method of determination applies, insert
anwendbar ist, sind die erforderlichen               herein and in the relevant Final Terms relevant
Bestimmungen anstelle der Bestimmungen               details in lieu of the provisions of this
                                                      - 55 -


dieses Absatzes (2) hier und in den betreffenden      paragraph (2)]:
Endgültigen Bedingungen einzufügen]:

[Falls ein Mindestzinssatz gilt, einfügen:            [If Minimum Rate of Interest applies insert:

(3) Mindest-Zinssatz.                                 (3) Minimum Rate of Interest.

Wenn der gemäß den obigen Bestimmungen für            If the Rate of Interest in respect of any Interest Period
eine Zinsperiode ermittelte Zinssatz niedriger ist    determined in accordance with the above provisions is
als [Mindestzinssatz einfügen], so ist der Zinssatz   less than [insert Minimum Rate of Interest], the Rate
für    diese    Zinsperiode     [Mindestzinssatz      of Interest for such Interest Period shall be [insert
einfügen].]                                           Minimum Rate of Interest].]

[(4)][(●)] Zinsbetrag. Die Berechnungsstelle wird     [(4)][(●)] Interest Amount. The Calculation Agent will,
zu oder baldmöglichst nach jedem Zeitpunkt, an        on or as soon as practicable after each date at which the
dem der Zinssatz zu bestimmen ist, den auf die        Rate of Interest is to be determined, calculate the
Pfandbriefe zahlbaren Zinsbetrag in Bezug auf         amount of interest (the "Interest Amount") payable on
jede Festgelegte Stückelung (der "Zinsbetrag")        the Pfandbriefe in respect of each Specified
für die entsprechende Zinsperiode berechnen. Der      Denomination for the relevant Interest Period. Each
Zinsbetrag wird ermittelt, indem der Zinssatz und     Interest Amount shall be calculated by applying the
der Zinstagequotient (wie nachstehend definiert)      Rate of Interest and the Day Count Fraction (as defined
auf jede Festgelegte Stückelung angewendet            below) to each Specified Denomination and rounding
werden, wobei der resultierende Betrag auf den        the resulting figure to the nearest Euro 0.01,
nächsten Euro 0,01 auf- oder abgerundet wird,         Euro 0.005 being rounded upwards.
wobei Euro 0,005 aufgerundet werden.

[(5)][(●)] Mitteilungen von Zinssatz und              [(5)][(●)] Notification of Rate of Interest and Interest
Zinsbetrag.     Die    Berechnungsstelle     wird     Amount. The Calculation Agent will cause the Rate of
veranlassen, dass der Zinssatz, der Zinsbetrag für    Interest, each Interest Amount for each Interest Period,
die jeweilige Zinsperiode, die jeweilige              each Interest Period and the relevant Interest Payment
Zinsperiode und der relevante Zinszahlungstag der     Date to be notified to the Issuer, the Fiscal Agent and
Emittentin, der Emissionsstelle und den               to the Holders in accordance with § 10 as soon as
Gläubigern gemäß § 10 baldmöglichst, aber             possible after their determination, but in no event later
keinesfalls später als am vierten auf die             than the fourth [if Calculation Agent is required to
Berechnung jeweils folgenden [falls die               maintain a Specific Office in a Required Location
Berechnungsstelle         eine        bezeichnete     insert: Business Day which is a Business Day at the
Geschäftsstelle an einem vorgeschriebenen Ort         place of the Specified Office of the Calculation Agent]
zu unterhalten hat, einfügen: Geschäftstag, der       [if Calculation Agent is not required to maintain a
ein Geschäftstag am Ort der bezeichneten              Specific Office in a Required Location insert:
Geschäftsstelle der Berechnungsstelle ist,] [falls    [TARGET] [London] Business Day ] thereafter and, if
die Berechnungsstelle keine bezeichnete               required by the rules of any stock exchange on which
Geschäftsstelle an einem vorgeschriebenen Ort         the Pfandbriefe are from time to time listed, to such
zu unterhalten hat, einfügen: [TARGET-]               stock exchange, as soon as possible after their
[Londoner] Geschäftstag ] und jeder Börse, an der     determination, but in no event later than the first day of
die betreffenden Pfandbriefe zu diesem Zeitpunkt      the relevant Interest Period. Each Interest Amount and
notiert sind und deren Regeln eine Mitteilung an      Interest Payment Date so notified may subsequently be
die Börse verlangen, umgehend, aber keinesfalls       amended (or appropriate alternative arrangements
später als zu Beginn der jeweiligen Zinsperiode       made by way of postponement) without notice in the
mitgeteilt werden. Im Falle einer Verlängerung        event of an extension or shortening of the Interest
oder Verkürzung der Zinsperiode können der            Period. Any such amendment will be promptly notified
mitgeteilte Zinsbetrag und Zinszahlungstag ohne       to any stock exchange on which the Pfandbriefe are
Vorankündigung nachträglich angepasst (oder           then listed and to the Holders in accordance with § 10.
andere       geeignete     Anpassungsregelungen
getroffen) werden. Jede solche Anpassung wird
umgehend allen Börsen, an denen die Pfandbriefe
zu diesem Zeitpunkt notiert sind, sowie den
Gläubigern gemäß § 10 mitgeteilt.

[(6)][(●)] Verbindlichkeit der Festsetzungen. Alle    [(6)][(●)] Determinations Binding. All certificates,
Bescheinigungen,      Mitteilungen,     Gutachten,    communications,          opinions,       determinations,
Festsetzungen, Berechnungen, Quotierungen und         calculations, quotations and decisions given, expressed,
Entscheidungen, die von der Berechnungsstelle für     made or obtained for the purposes of the provisions of
                                                                          - 56 -


die Zwecke dieses § 3 gemacht, abgegeben,                                 this § 3 by the Calculation Agent shall (in the absence
getroffen oder eingeholt werden, sind (sofern nicht                       of manifest error) be binding on the Issuer, the Fiscal
ein offensichtlicher Irrtum vorliegt) für die                             Agent, the Paying Agents and the Holders.
Emittentin, die Emissionsstelle, die Zahlstellen
und die Gläubiger bindend.

[(7)][(●)] Zinslauf. Der Zinslauf der Pfandbriefe                         [(7)][(●)] Accrual of Interest. The Pfandbriefe shall
endet an dem Tag, der dem Tag vorangeht, an dem                           cease to bear interest from the date preceding their due
sie zur Rückzahlung fällig werden. Falls die                              date for redemption. If the Issuer shall fail to redeem
Emittentin die Pfandbriefe bei Fälligkeit nicht                           the Pfandbriefe when due, interest shall continue to
einlöst, endet die Verzinsung der ausstehenden                            accrue on the outstanding Pfandbriefe beyond the due
Pfandbriefe nicht am Tag der Fälligkeit, sondern                          date until the date preceding the date of actual
erst an dem Tag, der dem Tag der tatsächlichen                            redemption of the Pfandbriefe. The applicable Rate of
Rückzahlung der Pfandbriefe vorangeht. Der                                Interest will be the default rate of interest established
maßgebliche Zinssatz ist der gesetzlich festgelegte                       by law2. ]
Satz für Verzugszinsen.2]

[(8)][(●)] Zinstagequotient. "Zinstagequotient"                           [(8)][(●)] Day Count Fraction. "Day Count Fraction"
bezeichnet im Hinblick auf die Berechnung des                             means, in respect of the calculation of an amount of
Zinsbetrages auf einen Pfandbrief für einen                               interest on any Pfandbrief for any period of time (the
beliebigen            Zeitraum             (der                           "Calculation Period"):
"Zinsberechnungszeitraum"):

[Im Fall von Actual/365 oder Actual/Actual                                [if Actual/365 or Actual/Actual insert:
einfügen:
die tatsächliche Anzahl von Tagen im                                      The actual number of days in the Calculation Period
Zinsberechnungszeitraum dividiert durch 365                               divided by 365 (or, if any portion of that Calculation
(oder,      falls        ein      Teil     dieses                         Period falls in a leap year, the sum of (A) the actual
Zinsberechnungszeitraumes in ein Schaltjahr fällt,                        number of days in that portion of the Calculation
die Summe aus (A) der tatsächlichen Anzahl der in                         Period falling in a leap year divided by 366 and (B) the
das     Schaltjahr      fallenden     Tage    des                         actual number of days in that portion of the Calculation
Zinsberechnungszeitraumes, dividiert durch 366,                           Period falling in a non-leap year divided by 365).]
und (B) die tatsächliche Anzahl der nicht in das
Schaltjahr        fallenden        Tage       des
Zinsberechnungszeitraums, dividiert durch 365).]

[Im Fall von festverzinslichen Pfandbriefen und                           [In case of fixed rate Pfandbriefe and if
Actual/Actual (ICMA) einfügen:                                            Actual/Actual (ICMA) insert:
(i)      wenn      der    Zinsberechnungszeitraum                         (i) if the Calculation Period (from, and including, the
    (einschließlich des ersten aber ausschließlich                            first day of such period, but excluding, the last) is
    des letzten Tages dieser Periode) kürzer ist als                          equal to or shorter than the Determination Period
    die Feststellungsperiode, in die das Ende des                             during which the Calculation Period ends, the
    Zinsberechnungszeitraumes fällt oder ihr                                  number of days in such Calculation Period (from,
    entspricht, die Anzahl der Tage in dem                                    and including, the first day of such period, but
    betreffenden          Zinsberechnungszeitraum                             excluding, the last) divided by the product of (1)
    (einschließlich des ersten aber ausschließlich                            the number of days in such Determination Period
    des letzten Tages dieser Periode) geteilt durch                           and (2) the number of Determination Dates (as
    das Produkt (1) der Anzahl der Tage in der                                specified in § 3 (1)) that would occur in one
    Feststellungsperiode und (2) der Anzahl der                               calendar year; or
    Feststellungstermine (wie in § 3 (1) angegeben)
    in einem Kalenderjahr; oder

(ii)     wenn      der    Zinsberechnungszeitraum                         (ii) if the Calculation Period is longer than the
    (einschließlich des ersten aber ausschließlich                             Determination Period during which the Calculation
    des letzten Tages dieser Periode) länger ist als                           Period ends, the sum of: (A) the number of days in
    die Feststellungsperiode, in die das Ende des                              such Calculation Period falling in the
    Zinsberechnungszeitraumes fällt, die Summe                                 Determination Period in which the Calculation
    (A) der Anzahl der Tage in den                                             Period begins divided by the product of (1) the
2
    The default rate of interest established by law is five percentage points above the basic rate of interest published by Deutsche Bundesbank from time to
    time, §§ 288 paragraph 1, 247 paragraph 1 German Civil Code.
    Der gesetzliche Verzugszinssatz beträgt für das Jahr fünf Prozentpunkte über dem von der Deutsche Bundesbank von Zeit zu Zeit veröffentlichten
    Basiszinssatz, §§ 288 Absatz 1, 247 Absatz 1 BGB.
                                                     - 57 -


  Zinsberechnungszeitraum,       die     in   die        number of days in such Determination Period and
  Feststellungsperiode fallen, in welcher der            (2) the number of Determination Dates (as
  Zinsberechnungszeitraum beginnt, geteilt durch         specified in § 3 (1)) and (B) the number of days in
  das Produkt (1) der Anzahl der Tage in dieser          such Calculation Period falling in the next
  Feststellungsperiode (2) der Anzahl der                Determination Period divided by the product of (1)
  Feststellungstermine (wie in § 3 (1) angegeben)        the number of days in such Determination Period
  in einem Kalenderjahr und (B) der Anzahl der           and (2) the number of Determination Dates (as
  Tage in dem Zinsberechnungszeitraum, die in            specified in § 3 (1)) that would occur in one
  die nächste Feststellungsperiode fallen, geteilt       calendar year.
  durch das Produkt (1) der Anzahl der Tage in
  dieser Feststellungsperiode und (2) der Anzahl
  der       Feststellungstermine      (wie     in
  § 3 (1) angegeben) in einem Kalenderjahr.

"Feststellungsperiode" ist die Periode ab einem      "Determination Period" means the period from, and
Feststellungstermin (einschließlich desselben) bis   including, a Determination Date to, but excluding, the
zum nächsten Feststellungstermin (ausschließlich     next Determination Date.]
desselben).]

[Im Falle von Actual/365 (Fixed) einfügen: die       [if Actual/365 (Fixed) insert: the actual number of
tatsächliche   Anzahl     von       Tagen     im     days in the Calculation Period divided by 365.]
Zinsberechnungszeitraum dividiert durch 365.]

[Im Falle von Actual/360 einfügen: die               [if Actual/360 insert: the actual number of days in the
tatsächliche   Anzahl     von       Tagen     im     Calculation Period divided by 360.]
Zinsberechnungszeitraum dividiert durch 360.]

[Im Falle von 30/360, 360/360 oder Bond Basis        [if 30/360, 360/360 or Bond Basis insert: the number
einfügen: die Anzahl von Tagen im                    of days in the Calculation Period divided by 360, the
Zinsberechnungszeitraum, dividiert durch 360,        number of days to be calculated on the basis of a year
wobei die Anzahl der Tage auf der Grundlage          of 360 days with 12 30-day months (unless (A) the last
eines Jahres von 360 Tagen mit zwölf Monaten zu      day of the Calculation Period is the 31st day of a month
je 30 Tagen zu ermitteln ist (es sei denn, (A) der   but the first day of the Calculation Period is a day other
letzte Tag des Zinsberechnungszeitraums fällt auf    than the 30th or 31st day of a month, in which case the
den 31. Tag eines Monats, während der erste Tag      month that includes that last day shall not be
des Zinsberechnungszeitraums weder auf den 30.       considered to be shortened to a 30-day month, or (B)
noch auf den 31. Tag eines Monats fällt, in          the last day of
welchem Fall der diesen Tag enthaltende Monat        the Calculation Period is the last day of the month
nicht als ein auf 30 Tage gekürzter Monat zu         February in which case the month of February shall not
behandeln ist, oder (B) der letzte Tag des           be considered to be lengthened to a 30-day month).]
Zinsberechnungszeitraums fällt auf den letzten
Tag des Monats Februar, in welchem Fall der
Monat Februar nicht als ein auf 30 Tage
verlängerter Monat zu behandeln ist).]

[Im Falle von 30E/360 oder Eurobond Basis            [if 30E/360 or Eurobond Basis: the number of days in
einfügen:     die    Anzahl    der    Tage     im    the Calculation Period divided by 360 (the number of
Zinsberechnungszeitraum, dividiert durch 360         days to be calculated on the basis of a year of 360 days
(dabei ist die Anzahl der Tage auf der Grundlage     with 12 30-day months, without regard to the date of
eines Jahres von 360 Tagen mit 12 Monaten zu 30      the first day or last day of the Calculation Period
Tagen      zu   ermitteln,   und    zwar     ohne    unless, in the case of the Final Calculation Period, the
Berücksichtigung des Datums des ersten oder          Maturity Date is the last day of the month of February.
letzten Tages des Zinsberechnungszeitraums, es       In which case the month of February shall not be
sei denn, dass im Falle einer am Fälligkeitstag      considered to be lengthened to a 30 day month).]
endenden Zinsperiode der Fälligkeitstag der letzte
Tag des Monats Februar ist, in welchem Fall der
Monat Februar als nicht auf einen Monat zu 30
Tagen verlängert gilt).]

[(C) Bei Null-Kupon Pfandbriefen einfügen:           [(C) In the case of Zero Coupon Pfandbriefe insert:
Es erfolgen keine regelmäßigen Zinszahlungen         There will not be any periodic payments of interest on
                                                                     - 58 -


unter den Pfandbriefen. Falls die Emittentin die                      the Pfandbriefe. If the Issuer fails to redeem the
Pfandbriefe bei Fälligkeit nicht einlöst, erfolgt die                 Pfandbriefe when due, interest on the Specified
Verzinsung bezogen auf die Festgelegte                                Denomination of the outstanding Pfandbriefe accrues
Stückelung der ausstehenden Pfandbriefe vom Tag                       from, and including, the due date to, but excluding, the
der Fälligkeit (einschließlich) bis zum Tag der                       date of the actual redemption of the Pfandbriefe at the
tatsächlichen Rückzahlung der Pfandbriefe                             default rate of interest established by law.3]
(ausschließlich) in Höhe des gesetzlich
festgelegten Satzes für Verzugszinsen.3]

                        §4                                                                         §4
                    ZAHLUNGEN                                                                   PAYMENTS

(1) (a) Zahlungen von Kapital. Zahlungen von                          (1) (a) Payment of Principal. Payment of principal in
Kapital auf die Pfandbriefe erfolgen nach                             respect of Pfandbriefe shall be made, subject to
Maßgabe des nachstehenden Absatzes (2) an das                         paragraph (2) below, to the Clearing System or to its
Clearing System oder dessen Order zur Gutschrift                      order for credit to the accounts of the relevant
auf den Konten der jeweiligen Kontoinhaber des                        accountholders of the Clearing System upon
Clearing Systems gegen Vorlage und (außer im                          presentation and (except in the case of partial payment)
Fall von Teilzahlungen) Einreichung der die                           surrender of the Global Note representing the
Pfandbriefe zum Zeitpunkt der Zahlung                                 Pfandbriefe at the time of payment at the specified
verbriefenden Globalurkunde bei der bezeichneten                      office of the Fiscal Agent outside the United States.
Geschäftsstelle der Emissionsstelle außerhalb der
Vereinigten Staaten.

(b) Zahlungen von Zinsen. Die Zahlung von                             (b) Payment of Interest. Payment of interest on
Zinsen auf Pfandbriefe erfolgt nach Maßgabe von                       Pfandbriefe shall be made, subject to paragraph (2), to
Absatz (2) an das Clearing System oder dessen                         the Clearing System or to its order for credit to the
Order zur Gutschrift auf den Konten der                               relevant accountholders of the Clearing System.
jeweiligen Kontoinhaber des Clearing Systems.

[Bei Zinszahlungen auf eine Vorläufige                                [In the case of interest payable on a Temporary
Globalurkunde einfügen: Die Zahlung von                               Global Note insert: Payment of interest on
Zinsen auf Pfandbriefe, die durch die Vorläufige                      Pfandbriefe represented by the Temporary Global Note
Globalurkunde verbrieft sind, erfolgt nach                            shall be made, subject to paragraph (2), to the Clearing
Maßgabe von Absatz (2) an das Clearing System                         System or to its order for credit to the relevant
oder dessen Order zur Gutschrift auf den Konten                       accountholders of the Clearing System, upon due
der jeweiligen Kontoinhaber des Clearing                              certification as provided in § 1 (3) (b).]]
Systems, und zwar nach ordnungsgemäßer
Bescheinigung gemäß § 1 (3) (b).]]

(2) Zahlungsweise. Vorbehaltlich geltender                            (2) Manner of Payment. Subject to applicable fiscal
steuerlicher und sonstiger gesetzlicher Regelungen                    and other laws and regulations, payments of amounts
und Vorschriften erfolgen zu leistende Zahlungen                      due in respect of the Pfandbriefe shall be made in the
auf die Pfandbriefe in der frei handelbaren und                       freely negotiable and convertible currency which on
konvertierbaren Währung, die am entsprechenden                        the respective due date is the currency of the country of
Fälligkeitstag die Währung des Staates der                            the Specified Currency.
festgelegten Währung ist.

(3) Vereinigte Staaten. Für die Zwecke des [Im                        (3) United States. For purposes of [in the case of
Fall von TEFRA D Pfandbriefen einfügen: § 1                           TEFRA D Pfandbriefe insert: § 1 (3) and] paragraph
(3) und des] Absatzes (1) dieses § 4 bezeichnet                       (1) of this § 4, "United States" means the United
"Vereinigte Staaten" die Vereinigten Staaten von                      States of America (including the States thereof and the
Amerika (einschließlich deren Bundesstaaten und                       District of Columbia) and its possessions (including
des District of Columbia) sowie deren Territorien                     Puerto Rico, the U.S. Virgin Islands, Guam, American
(einschließlich Puerto Rico, der U.S. Virgin                          Samoa, Wake Island and Northern Mariana Islands).
Islands, Guam, American Samoa, Wake Island und
Northern Mariana Islands).
3
     The default rate of interest established by law is currently five percentage points above the base rate of interest (Basiszinssatz) published by
     Deutsche Bundesbank from time to time, §§ 288 paragraph 1, 247 German Civil Code (Bürgerliches Gesetzbuch).
     Der gegenwärtig geltende gesetzliche Verzugszinssatz beträgt für das Jahr fünf Prozentpunkte über dem von der Deutsche Bundesbank von
     Zeit zu Zeit veröffentlichten Basiszinssatz, §§ 288 Absatz 1, 247 Bürgerliches Gesetzbuch.
                                                      - 59 -



(4) Erfüllung. Die Emittentin wird durch Leistung     (4) Discharge. The Issuer shall be discharged by
der Zahlung an das Clearing System oder dessen        payment to, or to the order of, the Clearing System.
Order von ihrer Zahlungspflicht befreit.

(5) Zahltag. Fällt der Fälligkeitstag einer Zahlung   (5) Payment Business Day. If the date for payment of
in Bezug auf einen Pfandbrief auf einen Tag, der      any amount in respect of any Pfandbrief is not a
kein Zahltag ist, dann:                               Payment Business Day then:

[(i) bei Anwendung der Modifizierte Folgender         [(i) in the case of Modified Following Business Day
Geschäftstag-Konvention einfügen: hat der             Convention insert: the Holder shall not be entitled to
Gläubiger keinen Anspruch auf Zahlung vor dem         payment until the next day which is a Payment
nächstfolgenden Zahltag, es sei denn jener würde      Business Day unless it would thereby fall into the next
dadurch in den nächsten Kalendermonat fallen; in      calendar month, in which event the payment date shall
diesem Fall wird der Zinszahlungstag auf den          be the immediately preceding Business Day.]
unmittelbar    vorausgehenden       Geschäftstag
vorgezogen.]

[(ii) bei Anwendung der Floating Rate Note-           [(ii) in the case of Floating Rate Note-Convention
Konvention einfügen: hat der Gläubiger keinen         insert: the Holder shall not be entitled to payment until
Anspruch auf Zahlung vor dem nächstfolgenden          the next Payment Business Day unless it would thereby
Zahltag, es sei denn, jener würde dadurch in den      fall into the next calendar month, in which event (i) the
nächsten Kalendermonat fallen; in diesem Fall (i)     payment date shall be the immediately preceding
wird der Zahltag auf den unmittelbar                  Business Day and (ii) each subsequent Interest
vorausgehenden Geschäftstag vorgezogen und (ii)       Payment Date shall be the last Business Day in the
ist jeder nachfolgende Zahltag der jeweils letzte     month which falls [[insert number] [months] [insert
Geschäftstag des Monats, der [[Zahl einfügen]         other specified periods] after the preceding applicable
Monate]      [andere    festgelegte   Zeiträume       payment date.]
einfügen] nach dem vorausgehenden anwendbaren
Zahltag liegt.]

[(iii)  bei   Anwendung      der    Folgender         [(iii) in the case of Following Business Day
Geschäftstag-Konvention einfügen: hat der             Convention insert: the Holder shall not be entitled to
Gläubiger keinen Anspruch auf Zahlung vor dem         payment until the next day which is a Payment
nachfolgenden Zahltag.]                               Business Day.]

[(iv) bei Anwendung der Vorangegangener               [(iv) in the case of Preceding Business Day
Geschäftstag-Konvention einfügen: wird der            Convention insert: the Holder shall be entitled to
Zahltag auf den unmittelbar vorausgehenden            payment on the immediately preceding Payment
Zahltag vorgezogen.]                                  Business Day.]

[Falls "Ohne Anpassung" anwendbar ist,                [In case "Unadjusted" is applicable, insert: The
einfügen: Der Gläubiger ist nicht berechtigt,         Holder shall not be entitled to further interest or other
weitere Zinsen oder sonstige Zahlungen aufgrund       payment in respect of such a postponement of a
einer solchen Verschiebung eines Zahltages zu         Payment Business Day.
verlangen.]

Für diese Zwecke bezeichnet "Zahltag" einen Tag       For these purposes, "Payment Business Day" means a
(außer einem Samstag oder Sonntag), an dem (i)        day which is a day (other than a Saturday or a Sunday)
das Clearing System und (ii) das Trans-European       on which both (i) the Clearing System, and (ii) the
Automated Real-Time Gross Settlement Express          Trans-European      Automated      Real-Time     Gross
Transfer System oder ein Nachfolgesystem              Settlement Express Transfer System or any successor
(TARGET)] Zahlungen abwickeln.                        system thereto (TARGET)] settle payments.

(7) Hinterlegung von Kapital und Zinsen. Die          (7) Deposit of Principal and Interest. The Issuer may
Emittentin ist berechtigt, beim Amtsgericht           deposit with the Amtsgericht in Frankfurt am Main
Frankfurt am Main Zins- oder Kapitalbeträge zu        principal or interest not claimed by Holders within
hinterlegen, die von den Gläubigern nicht             twelve months after the Maturity Date, even though
innerhalb von zwölf Monaten nach dem                  such Holders may not be in default of acceptance of
Fälligkeitstag beansprucht worden sind, auch          payment. If and to the extent that the deposit is effected
wenn die Gläubiger sich nicht in Annahmeverzug        and the right of withdrawal is waived, the respective
befinden. Soweit eine solche Hinterlegung erfolgt,    claims of such Holders against the Issuer shall cease.
                                                     - 60 -


und auf das Recht der Rücknahme verzichtet wird,
erlöschen die Ansprüche der Gläubiger gegen die
Emittentin.

                      §5                                                    §5
                 RÜCKZAHLUNG                                            REDEMPTION

(1) Rückzahlung bei Endfälligkeit.                   (1) Redemption at Maturity.

Soweit nicht zuvor bereits ganz oder teilweise       Unless previously redeemed in whole or in part or
zurückgezahlt oder angekauft und entwertet,          purchased and cancelled, the Pfandbriefe shall be
werden      die     Pfandbriefe     zu      ihrem    redeemed at their Final Redemption Amount on [insert
Rückzahlungsbetrag am [Fälligkeitstag einfügen]      Maturity Date] [in the case of a Redemption Month
[Im Fall eines Rückzahlungsmonats einfügen:          insert: the Interest Payment Date falling in [insert
in den [Rückzahlungsmonat einfügen] fallenden        Redemption Month]] (the "Maturity Date"). The
Zinszahlungstag]       (der      "Fälligkeitstag")   Final Redemption Amount in respect of each
zurückgezahlt. Der Rückzahlungsbetrag in Bezug       Pfandbrief shall be [if the Pfandbriefe are redeemed
auf jeden Pfandbrief entspricht [falls die           at their Specified Denomination insert: its Specified
Pfandbriefe zu ihrer Festgelegten Stückelung         Denomination] [otherwise insert Final Redemption
zurückgezahlt      werden,      einfügen:      der   Amount per Specified Denomination].]
Festgelegten    Stückelung    der    Pfandbriefe]
[ansonsten den Rückzahlungsbetrag für die
jeweilige Festgelegte Stückelung einfügen].]

(2) Keine Vorzeitige Rückzahlung.                    (2) No Early Redemption.

Weder die Emittentin noch ein Gläubiger ist zur      Neither the Issuer nor any Holder shall be entitled to an
vorzeitigen Rückzahlung      der   Pfandbriefe       early redemption of the Pfandbriefe.
berechtigt.

                 §6                                                       §6
   DIE EMISSIONSSTELLE [UND] [,] DIE                    FISCAL AGENT [,] [AND] PAYING AGENTS
        ZAHLSTELLEN [UND DIE                                 [AND CALCULATION AGENT]
        BERECHNUNGSSTELLE]

(1) Bestellung. Bezeichnete Geschäftsstelle. Die     (1) Appointment. Specified Offices. The initial Fiscal
anfänglich bestellte Emissionsstelle[,][und] die     Agent[,] [and] Paying Agent[s] [and the Calculation
Zahlstelle[n] [und die Berechnungsstelle] und        Agent] and [its] [their] respective initial specified
deren anfänglich bezeichnete[n] Geschäftsstelle[n]   offices are:
lauten wie folgt:

Emissionsstelle:                                     Fiscal Agent:

[ING-DiBa AG                                         [ING-DiBa AG
Theodor-Heuss-Allee 106                              Theodor-Heuss-Allee 106
60468 Frankfurt am Main                              60468 Frankfurt am Main
Deutschland]                                         Germany]

[andere Emissionsstelle       und     bezeichnete    [insert other Fiscal Agents and specified offices]
Geschäftsstellen einfügen]

Zahlstelle[n]:                                       Paying Agent[s]:

ING-DiBa AG                                          ING-DiBa AG
Theodor-Heuss-Allee 106                              Theodor-Heuss-Allee 106
60468 Frankfurt am Main                              60468 Frankfurt am Main
Deutschland                                          Germany

[andere Zahlstellen und bezeichnete                  [insert other Paying Agents and specified offices]
Geschäftsstellen einfügen]
                                                       - 61 -


[Berechnungsstelle:                                    [Calculation Agent:

ING-DiBa AG                                            ING-DiBa AG
Theodor-Heuss-Allee 106                                Theodor-Heuss-Allee 106
60468 Frankfurt am Main                                60468 Frankfurt am Main
Deutschland                                            Germany

[andere Berechnungsstelle und bezeichnete              [insert other Calculation Agent and specified
Geschäftsstelle einfügen]]                             offices]]

Die Emissionsstelle[,] [und] die Zahlstelle[n] [und    The Fiscal Agent [,] [and] the Paying Agent[s] [and the
die Berechnungsstelle] behalten sich das Recht         Calculation Agent] reserve the right at any time to
vor, jederzeit die bezeichnete Geschäftsstelle         change their respective specified offices to some other
durch eine andere bezeichnete Geschäftsstelle zu       specified office.
ersetzen.

(2) Änderung der Bestellung oder Abberufung. Die       (2) Variation or Termination of Appointment. The
Emittentin behält sich das Recht vor, jederzeit die    Issuer reserves the right at any time to vary or
Bestellung der Emissionsstelle oder einer              terminate the appointment of the Fiscal Agent or any
Zahlstelle [oder der Berechnungsstelle] zu ändern      Paying Agent [or the Calculation Agent] and to appoint
oder zu beenden und eine andere Emissionsstelle        another Fiscal Agent or additional or other Paying
oder zusätzliche oder andere Zahlstellen [oder eine    Agents [or another Calculation Agent]. The Issuer shall
andere Berechnungsstelle] zu bestellen. Die            at all times maintain [(i)] a Fiscal Agent [in the case of
Emittentin wird jederzeit [(i)] eine Emissionsstelle   Pfandbriefe listed on a stock exchange insert: and
unterhalten [im Fall von Pfandbriefen, die an          (ii) so long as the Pfandbriefe are listed on the [name
einer Börse notiert sind, einfügen: und (ii)           of Stock Exchange], a Paying Agent (which may be
solange die Pfandbriefe an der [Name der Börse]        the Fiscal Agent) with a specified office in [location of
notiert   sind,    eine    Zahlstelle    (die    die   Stock Exchange] and/or in such other place as may be
Emissionsstelle sein kann) mit bezeichneter            required by the rules of such stock exchange]
Geschäftsstelle in [Sitz der Börse] und/oder an
solchen anderen Orten unterhalten, die die Regeln
dieser Börse verlangen]

(3)     Beauftragte     der    Emittentin.     Die     (3) Agents of the Issuer. The Fiscal Agent[,] [and] the
Emissionsstelle[,] [und] die Zahlstelle[n] [und die    Paying Agent[s] [and the Calculation Agent] act solely
Berechnungsstelle] handeln ausschließlich als          as agents of the Issuer and do not have any obligations
Beauftragte der Emittentin und übernehmen              towards or relationship of agency or trust to any
keinerlei   Verpflichtungen     gegenüber      den     Holder.
Gläubigern; es wird kein Auftrags- oder
Treuhandverhältnis zwischen ihnen und den
Gläubigern begründet.

                      §7                                                        §7
                   STEUERN                                                   TAXATION

Sämtliche auf die Pfandbriefe zu zahlenden             All amounts payable in respect of the Pfandbriefe shall
Beträge sind ohne Einbehalt oder Abzug von oder        be made without withholding or deduction for or on
aufgrund von gegenwärtigen oder zukünftigen            account of any present or future taxes or duties of
Steuern oder sonstigen Abgaben gleich welcher          whatever nature imposed or levied by way of
Art zu leisten, die von oder in der Bundesrepublik     withholding or deduction at source by or on behalf of
Deutschland oder in den Vereinigten Staaten von        the Federal Republic of Germany or the United States
Amerika oder für deren Rechnung oder von oder          of America or any political subdivision or any
für Rechnung einer politischen Untergliederung         authority thereof or therein having power to tax unless
oder Steuerbehörde derselben auferlegt oder            such withholding or deduction is required by law or
erhoben werden, es sei denn, ein solcher Einbehalt     pursuant to any agreement between the Issuer and the
oder Abzug ist gesetzlich oder gemäß eines             United States of America or any authority thereof.
Vertrages zwischen der Emittentin und den
Vereinigten Staaten von Amerika oder einer
Behörde der Vereinigten Staaten von Amerika
vorgeschrieben.
                                                    - 62 -


                  §8                                                     §8
            VORLEGUNGSFRIST                                      PRESENTATION PERIOD

Die in § 801 Absatz 1 Satz 1 Bürgerliches           The presentation period provided in § 801 paragraph 1,
Gesetzbuch bestimmte Vorlegungsfrist wird für       sentence 1 German Civil Code (Bürgerliches
die Pfandbriefe auf zehn Jahre abgekürzt.           Gesetzbuch) is reduced to ten years for the Pfandbriefe.

              §9                                                          §9
 BEGEBUNG WEITERER PFANDBRIEFE,                              FURTHER ISSUES, PURCHASES AND
    ANKAUF UND ENTWERTUNG                                           CANCELLATION

(1) Begebung weiterer Pfandbriefe. Die Emittentin   (1) Further Issues. The Issuer may from time to time,
ist berechtigt, jederzeit ohne Zustimmung der       without the consent of the Holders, issue further
Gläubiger weitere Pfandbriefe mit gleicher          Pfandbriefe having the same terms and conditions as
Ausstattung (gegebenenfalls mit Ausnahme des        the Pfandbriefe in all respects (or in all respects except
Tags der Begebung, des Verzinsungsbeginns           for the issue date, interest commencement date and/or
und/oder des Ausgabepreises) in der Weise zu        issue price) so as to form a single Series with the
begeben, dass sie mit diesen Pfandbriefen eine      Pfandbriefe.
einheitliche Serie bilden.

(2) Ankauf. Die Emittentin ist berechtigt,          (2) Purchases. The Issuer may at any time purchase
Pfandbriefe im Markt oder anderweitig zu            Pfandbriefe in the open market or otherwise and at
marktgerechten Preisen zu kaufen. Die von der       prices in line with the market. Pfandbriefe purchased
Emittentin erworbenen Pfandbriefe können nach       by the Issuer may, at the option of the Issuer, be held,
Wahl der Emittentin von ihr gehalten,               resold or surrendered to the Fiscal Agent for
weiterverkauft oder bei der Emissionsstelle         cancellation. If purchases are made by tender, tenders
zwecks Entwertung eingereicht werden. Sofern        for such Pfandbriefe must be made available to all
diese Käufe durch öffentliches Angebot erfolgen,    Holders of such Pfandbriefe alike.
muss dieses öffentliche Angebot allen Gläubigern
dieser Pfandbriefe gemacht werden.

(3)    Entwertung.     Sämtliche     vollständig    (3) Cancellation. All Pfandbriefe redeemed in full shall
zurückgezahlten Pfandbriefe sind unverzüglich zu    be cancelled forthwith and may not be reissued or
entwerten und können nicht wiederbegeben oder       resold.
wiederverkauft werden.

                   § 10                                                      § 10
              MITTEILUNGEN                                                 NOTICES

[Sofern eine Mitteilung durch Elektronische         [If notices may not be given by means of electronic
Publikation auf der Website der betreffenden        publication on the website of the relevant stock
Börse nicht möglich ist, einfügen:                  exchange insert:

[(1)] Bekanntmachung. Alle die Pfandbriefe          [(1)] Publication. All notices concerning the
betreffenden Mitteilungen sind, soweit gesetzlich   Pfandbriefe shall be published, to the extent legally
erforderlich, im Bundesanzeiger [sowie in einer     required, in the federal gazette (Bundesanzeiger) [and
führenden      Tageszeitung    mit    allgemeiner   in a leading daily newspaper having general circulation
Verbreitung in [Deutschland] [anderen Ort           in [Germany] [specify other location] [and will be
einfügen], voraussichtlich [die Börsen-Zeitung]     made by means of electronic publication on the internet
[andere Zeitung mit allgemeiner Verbreitung         website of the Issuer (www.ing-diba.de)]. [These
einfügen]] zu veröffentlichen [und erfolgen durch   newspapers are expected to be the [Börsen-Zeitung]
elektronische Publikation auf der Website der       [insert other applicable newspaper having general
Emittentin (www.ing-diba.de)]. Jede derartige       circulation]]]. Any notice so given will be deemed to
Mitteilung gilt mit dem Tag der Veröffentlichung    have been validly given on the date of such publication
(oder bei mehreren Veröffentlichungen mit dem       (or, if published more than once, on the date of the first
Tag der ersten solchen Veröffentlichung) als        such publication).]
wirksam erfolgt.]

[Sofern eine Mitteilung durch Elektronische         [If notices may be given by means of electronic
Publikation auf der Website der betreffenden        publication on the website of the relevant stock
Börse möglich ist, einfügen:                        exchange insert:
                                                      - 63 -


[(1)] Bekanntmachung. Alle die Pfandbriefe            [(1)] Publication. All notices concerning the
betreffenden Mitteilungen sind, soweit gesetzlich     Pfandbriefe shall be published, to the extent legally
erforderlich, im Bundesanzeiger in deutscher oder     required, in the federal gazette (Bundesanzeiger) and
englischer Sprache zu veröffentlichen und erfolgen    will be made by means of electronic publication on the
durch elektronische Publikation auf der Website       internet website of the [insert relevant stock
der [betreffende Börse einfügen] (www.                exchange] (www.[insert internet address]) [and on
[Internetadresse einfügen]) [und auf der Website      the internet website of the Issuer (www.ing-diba.de)].
der Emittentin (www.ing-diba.de)]. Jede derartige     Any notice so given will be deemed to have been
Mitteilung gilt mit dem Tag der Veröffentlichung      validly given on the day of such publication (or, if
(oder bei mehreren Veröffentlichungen mit dem         published more than once, on the first day of such
Tag der ersten solchen Veröffentlichung) als          publication).]
wirksam erfolgt.]

[(2) Mitteilung an das Clearing System.               [(2) Notification to Clearing System.

[im Fall von Pfandbriefen, die nicht                  [in the case of Pfandbriefe which are unlisted insert:
börsennotiert sind, einfügen: Die Emittentin          The Issuer shall deliver all notices concerning the
wird     alle   die   Pfandbriefe    betreffenden     Pfandbriefe to the Clearing System for communication
Mitteilungen an das Clearing System zur               by the Clearing System to the Holders. Any such notice
Weiterleitung an die Gläubiger übermitteln. Jede      shall be deemed to have been given to the Holders on
derartige Mitteilung gilt am [fünften] Tag nach       the [fifth] day after the day on which said notice was
dem Tag der Mitteilung an das Clearing System         given to the Clearing System.]
als den Gläubigern mitgeteilt.]

[Im Fall von Pfandbriefen, die an einer Börse         [In the case of Pfandbriefe which are listed on a
notiert sind und falls die Regularien dieser          Stock Exchange and in which case the rules of such
Börse es zulassen, einfügen: Die Emittentin ist       stock exchange allow for this way of publication:
berechtigt, eine Veröffentlichung nach Absatz (1)     The Issuer may, in lieu of publication set forth in
durch eine Mitteilung an das Clearing System zur      paragraph (1) above, deliver the relevant notice to the
Weiterleitung an die Gläubiger zu ersetzen,           Clearing System, for communication by the Clearing
vorausgesetzt, dass die Regeln der Börse, an der      System to the Holders, provided that the rules of the
die Pfandbriefen notiert sind, diese Form der         stock exchange on which Pfandbriefe are listed permit
Mitteilung zulassen. Jede derartige Mitteilung gilt   such form of notice. Any such notice shall be deemed
am [fünften] Tag nach dem Tag der Mitteilung an       to have been given to the Holders on the [fifth] day
das Clearing System als den Gläubigern                after the day on which said notice was given to the
mitgeteilt.]]                                         Clearing System.]]

               § 11                                                    § 11
       ANWENDBARES RECHT,                                    APPLICABLE LAW, PLACE OF
  ERFÜLLUNGSORT, GERICHTSSTAND                          PERFORMANCE, PLACE OF JURISDICTION
        UND GERICHTLICHE                                        AND ENFORCEMENT
        GELTENDMACHUNG

(1) Anwendbares Recht. Form und Inhalt der            (1) Applicable Law. The Pfandbriefe, as to form and
Pfandbriefe sowie die Rechte und Pflichten der        content, and all rights and obligations of the Holders
Gläubiger und der Emittentin bestimmen sich nach      and the Issuer, shall be governed by German law.
deutschem Recht.

(2) Erfüllungsort. Erfüllungsort ist Frankfurt am     (2) Place of Performance. Place of performance shall
Main.                                                 be Frankfurt am Main.

(3) Gerichtsstand. Nicht ausschließlich zuständig     (3) Submission to Jurisdiction. The District Court
für sämtliche im Zusammenhang mit den                 (Landgericht) in Frankfurt am Main shall have non-
Pfandbriefen entstehenden Klagen oder sonstige        exclusive jurisdiction for any action or other legal
Verfahren ("Rechtsstreitigkeiten") ist das            proceedings ("Proceedings") arising out of or in
Landgericht Frankfurt am Main. Die Zuständigkeit      connection with the Pfandbriefe. The afore-mentioned
des vorgenannten Gerichts ist ausschließlich,         court shall have exclusive jurisdiction in case of
soweit es sich um Rechtsstreitigkeiten handelt, die   Proceedings which are established by business people
von Kaufleuten, juristischen Personen des             (Kaufleute), corporate bodies of public law (juristische
öffentlichen Rechts, öffentlich-rechtlichen Sonder-   Personen des öffentlichen Rechts), separate assets of
vermögen und Personen ohne allgemeinen                public law (öffentlich-rechtliche Sondervermögen) and
Gerichtsstand in der Bundesrepublik Deutschland       persons for which the place of jurisdiction is not the
                                                       - 64 -


angestrengt werden. Die deutschen Gerichte sind        Federal Republic of Germany. The German courts shall
ausschließlich zuständig für die Kraftloserklärung     have exclusive jurisdiction over lost or destroyed
abhanden      gekommener      oder     vernichteter    Pfandbriefe.
Pfandbriefe.

(4) Gerichtliche Geltendmachung. Jeder Gläubiger       (4) Enforcement. Any Holder of Pfandbriefe may in
von Pfandbriefen ist berechtigt, in jedem              any proceedings against the Issuer, or to which such
Rechtsstreit gegen die Emittentin oder in jedem        Holder and the Issuer are parties, in his own name
Rechtsstreit, in dem der Gläubiger und die             enforce his rights arising under such Pfandbriefe on the
Emittentin Partei sind, seine Rechte aus diesen        basis of (i) a statement issued by the Custodian with
Pfandbriefen im eigenen Namen auf der folgenden        whom such Holder maintains a securities account in
Grundlage geltend zu machen: (i) er bringt eine        respect of Pfandbriefe (a) stating the full name and
Bescheinigung der Depotbank bei, bei der er für        address of the Holder, (b) specifying the aggregate
die Pfandbriefe ein Wertpapierdepot unterhält,         principal amount of Pfandbriefe credited to such
welche (a) den vollständigen Namen und die             securities account on the date of such statement and (c)
vollständige Adresse des Gläubigers enthält, (b)       confirming that the Custodian has given written notice
den Gesamtnennbetrag der Pfandbriefe bezeichnet,       to the Clearing System containing the information
die unter dem Datum der Bestätigung auf dem            pursuant to (a) and (b) or (ii) a copy of the Pfandbrief
Wertpapierdepot verbucht sind und (c) bestätigt,       in global form certified as being a true copy by a duly
dass die Depotbank gegenüber dem Clearing              authorised officer of the Clearing System or a
System eine schriftliche Erklärung abgegeben hat,      depositary of the Clearing System, without the need for
die die vorstehend unter (a) und (b) bezeichneten      production in such proceedings of the actual records or
Informationen enthält; oder (ii) er legt eine Kopie    the Global Note representing the Pfandbriefe. For
der die betreffenden Pfandbriefe verbriefenden         purposes of the foregoing, "Custodian" means any
Globalurkunde vor, deren Übereinstimmung mit           bank or other financial institution of recognised
dem Original eine vertretungsberechtigte Person        standing authorised to engage in securities custody
des Clearing Systems oder des Verwahrers des           business with which the Holder maintains a securities
Clearing Systems bestätigt hat, ohne dass eine         account in respect of the Pfandbriefe and includes the
Vorlage der Originalbelege oder der die                Clearing System. Each Holder may, without prejudice
Pfandbriefe verbriefenden Globalurkunde in einem       of the forgoing, protect and enforce his rights under the
solchen Verfahren erforderlich wäre. Für die           Pfandbriefe also in any other way which is permitted in
Zwecke       des      Vorstehenden       bezeichnet    the country in which the proceedings are initiated.
"Depotbank" jede Bank oder ein sonstiges
anerkanntes Finanzinstitut, das berechtigt ist, das
Wertpapierverwahrungsgeschäft zu betreiben und
bei der/dem der Gläubiger ein Wertpapierdepot für
die Pfandbriefe unterhält, einschließlich des
Clearing Systems. Unbeschadet des Vorstehenden
kann jeder Gläubiger seine Rechte aus den
Pfandbriefen auch auf jede andere Weise schützen
oder geltend machen, die im Land, in dem der
Rechtsstreit eingeleitet wird, prozessual zulässig
ist.

                     § 12                                                      § 12
                   SPRACHE                                                  LANGUAGE

Diese Emissionsbedingungen sind in [deutscher]         These Terms and Conditions are written in the
[englischer] Sprache abgefasst. [Eine Übersetzung      [German] [English] language. [[A German] [An
in die [deutsche] [englische] Sprache ist beigefügt.   English] language translation has been appended. The
Der [deutsche] [englische] Text ist bindend und        [German] [English] text shall be prevailing and
maßgeblich. Die Übersetzung in die [deutsche]          binding. The [German] [English] language translation
[englische] Sprache ist unverbindlich.]                is provided for convenience only.]
                                                       - 65 -


                                                                             Part E.III of the Base Prospectus
                                                                   Terms and Conditions of Jumbo-Pfandbriefe


                     TERMS AND CONDITIONS OF THE JUMBO-PFANDBRIEFE
                              - German and English Language Version -
                      EMISSIONSBEDINGUNGEN FÜR JUMBO-PFANDBRIEFE
                                 - Deutsche und englische Fassung –
           GERMAN LANGUAGE VERSION                                         ENGLISH LANGUAGE VERSION
             (DEUTSCHE FASSUNG DER
            EMISSIONSBEDINGUNGEN)
Im Hinblick auf diese Serie [Seriennummer einfügen] von         ING-DiBa AG will act as fiscal agent (the "Fiscal Agent",
Pfandbriefen übernimmt die ING-DiBa AG die Funktion der         which expression shall include any successor fiscal agent
Emissionsstelle (die "Emissionsstelle", wobei dieser Begriff    appointed by ING-DiBa AG and notified to the Holders in
eine durch die ING-DiBa AG bestellte und den Gläubigern         accordance with § 10 of the Terms and Conditions) in
gemäß § 10 der Emissionsbedingungen bekannt gegebene            relation to this Series [insert series number] of Pfandbriefe.
Nachfolgerin in dieser Funktion einschließt).
                    §1                                                               §1
     WÄHRUNG, FESTGELEGTE STÜCKELUNG,                                CURRENCY, SPECIFIED DENOMINATION,
           FORM, DEFINITIONEN                                                      FORM,
                                                                           CERTAIN DEFINITIONS

 (1) Währung. Festgelegte Stückelung. Diese Serie von            (1) Currency. Specified Denomination. This Series of
 Hypothekenpfandbriefen (die "Pfandbriefe") der ING-             Mortgage Pfandbriefe (Hypothekenpfandbriefe) (the
 DiBa AG (die "Emittentin") wird in Euro (die                    "Pfandbriefe") of ING-DiBa AG (the "Issuer") is being
 "Festgelegte Währung") im Gesamtnennbetrag von                  issued in Euro (the "Specified Currency") in the
 [Gesamtnennbetrag         einfügen]      (in     Worten:        aggregate principal amount of [insert aggregate
 [Gesamtnennbetrag       in    Worten     einfügen])   in        principal amount] (in words: [insert aggregate
 Festgelegten Stückelungen von [Festgelegte Stückelung           principal amount in words]) in Specified Denomination
 einfügen] (die "Festgelegte Stückelung") begeben.]              of [insert Specified Denomination] (the "Specified
                                                                 Denomination").]

 (2) Form. Die Pfandbriefe lauten auf den Inhaber.               (2) Form. The Pfandbriefe are being issued in bearer
                                                                 form.

 [Bei Pfandbriefen, die durch eine Dauerglobalurkunde            [In the case of Pfandbriefe which are exclusively
 verbrieft sind, einfügen:                                       represented by a Permanent Global Note insert:

 (3) Dauerglobalurkunde. Die Pfandbriefe sind durch eine         (3) Permanent Global Note. The Pfandbriefe are
 Dauerglobalurkunde (die "Dauerglobalurkunde") ohne              represented by a permanent global note (the "Permanent
 Zinsscheine verbrieft. Die Dauerglobalurkunde trägt die         Global Note") without coupons. The Permanent Global
 eigenhändigen oder faksimilierten Unterschriften zweier         Note shall be signed manually or in facsimile by two
 ordnungsgemäß bevollmächtigter Vertreter der Emittentin         authorised signatories of the Issuer and the public
 sowie      des     von      der    Bundesanstalt       für      fiduciary appointed by the Federal Financial Services
 Finanzdienstleistungsaufsicht   bestellten    staatlichen       Supervisory       Authority       (Bundesanstalt        für
 Treuhänders. Einzelurkunden und Zinsscheine werden              Finanzdienstleistungsaufsicht). Definitive Pfandbriefe and
 nicht ausgegeben.]                                              coupons will not be issued.]

 [Bei Pfandbriefen, die anfänglich durch eine vorläufige         [In the case of Pfandbriefe which are initially
 Globalurkunde verbrieft sind, einfügen:                         represented by a Temporary Global Note insert:

 (3) Vorläufige Globalurkunde – Austausch                        (3) Temporary Global Note – Exchange

 ((a) Die Pfandbriefe sind anfänglich durch eine vorläufige      (a) The Pfandbriefe are initially represented by a
 Globalurkunde (die "Vorläufige Globalurkunde") ohne             temporary global note (the "Temporary Global Note")
 Zinsscheine verbrieft. Die Vorläufige Globalurkunde wird        without coupons. The Temporary Global Note will be
 gegen Pfandbriefe in den Festgelegten Stückelungen, die         exchangeable for Pfandbriefe in Specified Denominations
 durch         eine        Dauerglobalurkunde          (die      represented by a permanent global note (the "Permanent
 "Dauerglobalurkunde") ohne Zinsscheine verbrieft sind,          Global Note") without coupons. The Temporary Global
                                                      - 66 -


ausgetauscht. Die Vorläufige Globalurkunde und die             Note and the Permanent Global Note shall each be signed
Dauerglobalurkunde tragen jeweils die eigenhändigen oder       manually or in facsimile by two authorised signatories of
faksimilierten Unterschriften zweier ordnungsgemäß             the Issuer and the public fiduciary appointed by the
bevollmächtigter Vertreter der Emittentin sowie des von        Federal Financial Services Supervisory Authority
der Bundesanstalt für Finanzdienstleistungsaufsicht            (Bundesanstalt     für     Finanzdienstleistungsaufsicht).
bestellten staatlichen Treuhänders. Einzelurkunden und         Definitive Pfandbriefe and coupons will not be issued.
Zinsscheine werden nicht ausgegeben.

(b) Die Vorläufige Globalurkunde wird an einem Tag (der        ((b) The Temporary Global Note shall be exchanged for
"Austauschtag"), der nicht weniger als 40 Tage nach dem        the Permanent Global Note on a date (the "Exchange
Tag der Ausgabe der Vorläufigen Globalurkunde liegen           Date") not earlier than 40 days after the date of issue of
darf, gegen die Dauerglobalurkunde ausgetauscht. Ein           the Temporary Global Note. Such exchange shall only be
solcher Austausch darf nur nach Vorlage von                    made upon delivery of certifications to the effect that the
Bescheinigungen erfolgen, wonach der oder die                  beneficial owner or owners of the Pfandbriefe represented
wirtschaftlichen Eigentümer der durch die Vorläufige           by the Temporary Global Note is not a U.S. person (other
Globalurkunde verbrieften Pfandbriefe keine U.S.-Personen      than certain financial institutions or certain persons
sind (ausgenommen bestimmte Finanzinstitute oder               holding Pfandbriefe through such financial institutions).
bestimmte Personen, die Pfandbriefe über solche                Payment of interest on Pfandbriefe represented by a
Finanzinstitute halten). Zinszahlungen auf durch eine          Temporary Global Note will be made only after delivery
Vorläufige Globalurkunde verbriefte Pfandbriefe erfolgen       of such certifications. A separate certification shall be
erst nach Vorlage solcher Bescheinigungen. Eine                required in respect of each such payment of interest. Any
gesonderte Bescheinigung ist hinsichtlich einer jeden          such certification received on or after the 40th day after
solchen Zinszahlung erforderlich. Jede Bescheinigung, die      the date of issue of the Temporary Global Note will be
am oder nach dem 40. Tag nach dem Tag der Ausgabe der          treated as a request to exchange such Temporary Global
Vorläufigen Globalurkunde eingeht, wird als ein Ersuchen       Note pursuant to subparagraph (b) of this § 1 (3). Any
behandelt werden, diese Vorläufige Globalurkunde gemäß         securities delivered in exchange for the Temporary Global
Absatz (b) dieses § 1 (3) auszutauschen. Wertpapiere, die      Note shall be delivered only outside of the United States
im Austausch für die Vorläufige Globalurkunde geliefert        (as defined in § 4 (3)).]
werden, sind nur außerhalb der Vereinigten Staaten (wie in
§ 4 (3) definiert) zu liefern.]

(4) Clearing System. [Jede Vorläufige Globalurkunde (falls     (4) Clearing System. [Each Temporary Global Note (if it
diese nicht ausgetauscht wird) und/oder jede                   will not be exchanged) and/or Permanent Global Note]
Dauerglobalurkunde] [Die Dauerglobalurkunde] wird              [The Permanent Global Note] will be kept in custody by
solange von einem oder im Namen eines Clearing Systems         or on behalf of a Clearing System until all obligations of
verwahrt, bis sämtliche Verbindlichkeiten der Emittentin       the Issuer under the Pfandbriefe have been satisfied.
aus den Pfandbriefen erfüllt sind. "Clearing System"           "Clearing System" means the following: Clearstream
bedeutet Folgendes: Clearstream Banking AG, Frankfurt          Banking AG, Frankfurt am Main ("CBF") or any
am Main ("CBF") oder jeder Funktionsnachfolger.                successor in respect of the functions performed by the
                                                               Clearing System.

(5) Gläubiger von Pfandbriefen. "Gläubiger" bezeichnet         (5) Holder of Pfandbriefe. "Holder" means any holder of
jeden Inhaber eines Miteigentumsanteils oder anderen           a proportionate co-ownership or other beneficial interest
Rechts an den Pfandbriefen.                                    or right in the Pfandbriefe.

                          §2                                                             §2
                        STATUS                                                         STATUS

Die     Pfandbriefe    begründen      nicht   nachrangige      The obligations under the Pfandbriefe constitute
Verbindlichkeiten der Emittentin, die untereinander            unsubordinated obligations of the Issuer ranking pari
gleichrangig sind. Die Pfandbriefe sind nach Maßgabe des       passu among themselves. The Pfandbriefe are covered in
deutschen Pfandbriefgesetzes gedeckt und stehen                accordance with the German Pfandbrief Act
mindestens im gleichen Rang mit allen anderen                  (Pfandbriefgesetz) and rank at least pari passu with all
Verpflichtungen         der         Emittentin        aus      other unsecured and unsubordinated present and future
Hypothekenpfandbriefen.                                        obligations of the Issuer under Mortgage Pfandbriefe
                                                               (Hypothekenpfandbriefe).

                          §3                                                             §3
                        ZINSEN                                                        INTEREST

(1) Zinssatz und Zinszahlungstage. Die Pfandbriefe werden      (1) Rate of Interest and Interest Payment Dates. The
bezogen auf ihre Festgelegte Stückelung verzinst, und zwar     Pfandbriefe shall bear interest on their Specified
                                                                          - 67 -


vom         [Verzinsungsbeginn           einfügen]        (der                        Denomination at the rate of [insert Rate of Interest] per
"Verzinsungsbeginn")         (einschließlich)     bis     zum                         cent. per annum from (and including) [insert Interest
Fälligkeitstag (wie in § 5 (1) definiert) (ausschließlich) mit                        Commencement Date] (the "Interest Commencement
jährlich [Zinssatz einfügen] %.                                                       Date") to (but excluding) the Maturity Date (as defined in
                                                                                      § 5 (1)).

Die Zinsen sind nachträglich am [Festzinstermin(e)                                    Interest shall be payable in arrear on [insert Fixed
einfügen] eines jeden Jahres, vorbehaltlich einer                                     Interest Date or Dates] in each year (each such date, an
Verschiebung gemäß § 4 (5), zahlbar (jeweils ein                                      "Interest Payment Date"), subject to postponement in
"Zinszahlungstag"). Die erste Zinszahlung erfolgt am                                  accordance with § 4 (5). The first payment of interest
[ersten Zinszahlungstag einfügen]) vorbehaltlich einer                                shall, subject to postponement in accordance with § 4 (5),
Verschiebung gemäß § 4 (5) [sofern der erste                                          be made on [insert First Interest Payment Date] [if
Zinszahlungstag nicht der erste Jahrestag des                                         First Interest Payment Date is not first anniversary of
Verzinsungsbeginns ist, einfügen: und beläuft sich auf                                Interest Commencement Date insert: and will amount
[anfänglichen Bruchteilszinsbetrag pro Festgelegte                                    to [insert Initial Broken Amount per Specified
Stückelung einfügen] je Pfandbrief in einer Festgelegten                              Denomination] per Pfandbrief in a Specified
Stückelung von [Festgelegte Stückelung einfügen]].                                    Denomination of [insert Specified Denomination]]. [If
[Sofern der Fälligkeitstag kein Festzinstermin ist,                                   the Maturity Date is not a Fixed Interest Date insert:
einfügen: Die Zinsen für den Zeitraum vom [den letzten                                Interest in respect of the period from [insert Fixed
dem Fälligkeitstag vorausgehenden Festzinstermin                                      Interest Date preceding the Maturity Date] (inclusive)
einfügen] (einschließlich) bis zum Fälligkeitstag                                     to the Maturity Date (exclusive) will amount to [insert
(ausschließlich) belaufen sich auf [abschließenden                                    Final Broken Amount per Specified Denomination] per
Bruchteilzinsbetrag    pro    Festgelegte    Stückelung                               Pfandbrief in a Specified Denomination of [insert
einfügen] je Pfandbrief in einer Festgelegten Stückelung                              Specified Denomination]].
von [Festgelegte Stückelung einfügen]].

(2) Zinslauf. Der Zinslauf der Pfandbriefe endet an dem                               (2) Accrual of Interest. The Pfandbriefe shall cease to bear
Tag, der dem Tag vorangeht, an dem sie zur Rückzahlung                                interest from the date preceding their due date for
fällig werden. Falls die Emittentin die Pfandbriefe bei                               redemption. If the Issuer shall fail to redeem the
Fälligkeit nicht einlöst, endet die Verzinsung der                                    Pfandbriefe when due, interest shall continue to accrue on
ausstehenden Pfandbriefe nicht am Tag der Fälligkeit,                                 the outstanding Pfandbriefe beyond the due date until the
sondern erst an dem Tag, der dem Tag der tatsächlichen                                date preceding the date of actual redemption of the
Rückzahlung der Pfandbriefe vorangeht. Der jeweils                                    Pfandbriefe. The applicable Rate of Interest will be the
geltende Zinssatz ist der gesetzlich festgelegte Satz für                             default rate of interest established by law4.
Verzugszinsen.4]

(3) Unterjährige Berechnung der Zinsen. Sofern Zinsen für                             (3) Calculation of Interest for Partial Periods. If interest is
einen Zeitraum von weniger als einem Jahr zu berechnen                                required to be calculated for a period of less than a full
sind, erfolgt die Berechnung auf der Grundlage des                                    year, such interest shall be calculated on the basis of the
Zinstagequotienten (wie nachstehend definiert).                                       Day Count Fraction (as defined below).

(4) Zinstagequotient. "Zinstagequotient" bezeichnet im                                (4) Day Count Fraction. "Day Count Fraction" means, in
Hinblick auf die Berechnung des Zinsbetrages auf einen                                respect of the calculation of an amount of interest on any
Pfandbrief für einen beliebigen Zeitraum (der                                         Pfandbrief for any period of time (the "Calculation
"Zinsberechnungszeitraum"): die tatsächliche Anzahl von                               Period"): the actual number of days in the Calculation
Tagen im Zinsberechnungszeitraum, dividiert durch die                                 Period divided by the actual number of days in the
tatsächliche Anzahl von Tagen im jeweiligen Zinsjahr.                                 respective interest year.

                                §4                                                                                     §4
                            ZAHLUNGEN                                                                               PAYMENTS

(1) (a) Zahlungen von Kapital. Zahlungen von Kapital auf                              (1) (a) Payment of Principal. Payment of principal in
die Pfandbriefe erfolgen nach Maßgabe des nachstehenden                               respect of Pfandbriefe shall be made, subject to paragraph
Absatzes (2) an das Clearing System oder dessen Order zur                             (2) below, to the Clearing System or to its order for credit
Gutschrift auf den Konten der jeweiligen Kontoinhaber des                             to the accounts of the relevant accountholders of the
Clearing Systems gegen Vorlage und (außer im Fall von                                 Clearing System upon presentation and (except in the case
Teilzahlungen) Einreichung der die Pfandbriefe zum                                    of partial payment) surrender of the Global Note
Zeitpunkt der Zahlung verbriefenden Globalurkunde bei                                 representing the Pfandbriefe at the time of payment at the
4
    The default rate of interest established by law is five percentage points above the basic rate of interest published by Deutsche Bundesbank from time to
    time, §§ 288 paragraph 1, 247 paragraph 1 German Civil Code.
    Der gesetzliche Verzugszinssatz beträgt für das Jahr fünf Prozentpunkte über dem von der Deutsche Bundesbank von Zeit zu Zeit veröffentlichten
    Basiszinssatz, §§ 288 Absatz 1, 247 Absatz 1 BGB.
                                                        - 68 -


der bezeichneten Geschäftsstelle der Emissionsstelle             specified office of the Fiscal Agent outside the United
außerhalb der Vereinigten Staaten.                               States.

(b) Zahlungen von Zinsen. Die Zahlung von Zinsen auf             (b) Payment of Interest. Payment of interest on Pfandbriefe
Pfandbriefe erfolgt nach Maßgabe von Absatz (2) an das           shall be made, subject to paragraph (2), to the Clearing
Clearing System oder dessen Order zur Gutschrift auf den         System or to its order for credit to the relevant
Konten der jeweiligen Kontoinhaber des Clearing Systems.         accountholders of the Clearing System.

[Bei Zinszahlungen auf eine Vorläufige Globalurkunde             [In the case of interest payable on a Temporary Global
einfügen: Die Zahlung von Zinsen auf Pfandbriefe, die            Note insert: Payment of interest on Pfandbriefe
durch die Vorläufige Globalurkunde verbrieft sind, erfolgt       represented by the Temporary Global Note shall be made,
nach Maßgabe von Absatz (2) an das Clearing System oder          subject to paragraph (2), to the Clearing System or to its
dessen Order zur Gutschrift auf den Konten der jeweiligen        order for credit to the relevant accountholders of the
Kontoinhaber des Clearing Systems, und zwar nach                 Clearing System, upon due certification as provided in § 1
ordnungsgemäßer Bescheinigung gemäß § 1 (3) (b).]                (3) (b).]

(2) Zahlungsweise. Vorbehaltlich geltender steuerlicher und      (2) Manner of Payment. Subject to applicable fiscal and
sonstiger gesetzlicher Regelungen und Vorschriften               other laws and regulations, payments of amounts due in
erfolgen zu leistende Zahlungen auf die Pfandbriefe in der       respect of the Pfandbriefe shall be made in the freely
frei handelbaren und konvertierbaren Währung, die am             negotiable and convertible currency which on the
entsprechenden Fälligkeitstag die Währung des Staates der        respective due date is the currency of the country of the
festgelegten Währung ist.                                        Specified Currency.

(3) Vereinigte Staaten. Für die Zwecke des [Im Fall von          (3) United States. For purposes of [in the case of TEFRA
TEFRA D Pfandbriefen einfügen: § 1 (3) und des]                  D Pfandbriefe insert: § 1 (3) and] paragraph (1) of this §
Absatzes (1) dieses § 4 bezeichnet "Vereinigte Staaten"          4, "United States" means the United States of America
die Vereinigten Staaten von Amerika (einschließlich deren        (including the States thereof and the District of Columbia)
Bundesstaaten und des District of Columbia) sowie deren          and its possessions (including Puerto Rico, the U.S. Virgin
Territorien (einschließlich Puerto Rico, der U.S. Virgin         Islands, Guam, American Samoa, Wake Island and
Islands, Guam, American Samoa, Wake Island und                   Northern Mariana Islands).
Northern Mariana Islands).

(4) Erfüllung. Die Emittentin wird durch Leistung der            (4) Discharge. The Issuer shall be discharged by payment
Zahlung an das Clearing System oder dessen Order von             to, or to the order of, the Clearing System.
ihrer Zahlungspflicht befreit.

(5) Zahltag. Fällt der Fälligkeitstag einer Zahlung in Bezug     (5) Payment Business Day. If the date for payment of any
auf einen Pfandbrief auf einen Tag, der kein Zahltag ist,        amount in respect of any Pfandbrief is not a Payment
dann hat der Gläubiger keinen Anspruch auf Zahlung vor           Business Day then the Holder shall not be entitled to
dem nachfolgenden Zahltag. Der Gläubiger ist nicht               payment until the next day which is a Payment Business
berechtigt, weitere Zinsen oder sonstige Zahlungen               Day. The Holder shall not be entitled to further interest or
aufgrund einer solchen Verschiebung eines Zahltages zu           other payment in respect of such an postponement of a
verlangen.                                                       Payment Business Day.

Für diese Zwecke bezeichnet "Zahltag" einen Tag (außer           For these purposes, "Payment Business Day" means a day
einem Samstag oder Sonntag), an dem (i) das Clearing             which is a day (other than a Saturday or a Sunday) on
System und (ii) das Trans-European Automated Real-Time           which both (i) the Clearing System, and (ii) the Trans-
Gross Settlement Express Transfer System oder ein                European Automated Real-Time Gross Settlement Express
Nachfolgesystem (TARGET) Zahlungen abwickeln.                    Transfer System or any successor system thereto
                                                                 (TARGET) settle payments.

(6) Hinterlegung von Kapital und Zinsen. Die Emittentin ist      (6) Deposit of Principal and Interest. The Issuer may
berechtigt, beim Amtsgericht Frankfurt am Main Zins- oder        deposit with the Amtsgericht in Frankfurt am Main
Kapitalbeträge zu hinterlegen, die von den Gläubigern nicht      principal or interest not claimed by Holders within twelve
innerhalb von zwölf Monaten nach dem Fälligkeitstag              months after the Maturity Date, even though such Holders
beansprucht worden sind, auch wenn die Gläubiger sich            may not be in default of acceptance of payment. If and to
nicht in Annahmeverzug befinden. Soweit eine solche              the extent that the deposit is effected and the right of
Hinterlegung erfolgt, und auf das Recht der Rücknahme            withdrawal is waived, the respective claims of such
verzichtet wird, erlöschen die Ansprüche der Gläubiger           Holders against the Issuer shall cease.
gegen die Emittentin.
                                                       - 69 -


                        §5                                                               §5
                   RÜCKZAHLUNG                                                       REDEMPTION

(1) Rückzahlung bei Endfälligkeit.                              (1) Redemption at Maturity.

Soweit nicht zuvor bereits ganz oder teilweise                  Unless previously redeemed in whole or in part or
zurückgezahlt oder angekauft und entwertet, werden die          purchased and cancelled, the Pfandbriefe shall be redeemed
Pfandbriefe     zu    ihrem  Rückzahlungsbetrag       am        at their Final Redemption Amount on [insert Maturity
[Fälligkeitstag    einfügen]   (der     "Fälligkeitstag")       Date] (the "Maturity Date"). The Final Redemption
zurückgezahlt. Der Rückzahlungsbetrag in Bezug auf jeden        Amount in respect of each Pfandbrief shall be its Specified
Pfandbrief entspricht der Festgelegten Stückelung der           Denomination.
Pfandbriefe.

(2) Keine Vorzeitige Rückzahlung.                               (2) No Early Redemption.

Weder die Emittentin noch ein Gläubiger ist zur vorzeitigen     Neither the Issuer nor any Holder shall be entitled to an
Rückzahlung der Pfandbriefe berechtigt.                         early redemption of the Pfandbriefe.

                   §6                                                               §6
DIE EMISSIONSSTELLE UND DIE ZAHLSTELLEN                               FISCAL AGENT AND PAYING AGENTS

(1) Bestellung. Bezeichnete Geschäftsstelle. Die anfänglich     (1) Appointment. Specified Offices. The initial Fiscal Agent
bestellte Emissionsstelle und die Zahlstelle[n] und deren       and Paying Agent[s] and [its] [their] respective initial
anfänglich bezeichnete[n] Geschäftsstelle[n] lauten wie         specified offices are:
folgt:

Emissionsstelle:                                                Fiscal Agent:

[ING-DiBa AG                                                    [ING-DiBa AG
Theodor-Heuss-Allee 106                                         Theodor-Heuss-Allee 106
60468 Frankfurt am Main                                         60468 Frankfurt am Main
Deutschland]                                                    Germany]

[andere Emissionsstelle und bezeichnete                         [insert other Fiscal Agents and specified offices]
Geschäftsstellen einfügen]

Zahlstelle[n]:                                                  Paying Agent[s]:

ING-DiBa AG                                                     ING-DiBa AG
Theodor-Heuss-Allee 106                                         Theodor-Heuss-Allee 106
60468 Frankfurt am Main                                         60468 Frankfurt am Main
Deutschland                                                     Germany

[andere Zahlstellen und bezeichnete Geschäftsstellen            [insert other Paying Agents and specified offices]
einfügen]

Die Emissionsstelle und die Zahlstelle[n] behalten sich das     The Fiscal Agent and the Paying Agent[s] reserve the right
Recht vor, jederzeit die bezeichnete Geschäftsstelle durch      at any time to change their respective specified offices to
eine andere bezeichnete Geschäftsstelle zu ersetzen.            some other specified office.

(2) Änderung der Bestellung oder Abberufung. Die                (2) Variation or Termination of Appointment. The Issuer
Emittentin behält sich das Recht vor, jederzeit die             reserves the right at any time to vary or terminate the
Bestellung der Emissionsstelle oder einer Zahlstelle zu         appointment of the Fiscal Agent or any Paying Agent and
ändern oder zu beenden und eine andere Emissionsstelle          to appoint another Fiscal Agent or additional or other
oder zusätzliche oder andere Zahlstellen zu bestellen. Die      Paying Agents. The Issuer shall at all times maintain (i) a
Emittentin wird jederzeit (i) eine Emissionsstelle              Fiscal Agent and (ii) so long as the Pfandbriefe are listed
unterhalten und (ii) solange die Pfandbriefe an der [Name       on the [name of Stock Exchange], a Paying Agent (which
der Börse] notiert sind, eine Zahlstelle (die die               may be the Fiscal Agent) with a specified office in
Emissionsstelle sein kann) mit bezeichneter Geschäftsstelle     [location of Stock Exchange] and/or in such other place as
in [Sitz der Börse] und/oder an solchen anderen Orten           may be required by the rules of such stock exchange.
unterhalten, die die Regeln dieser Börse verlangen.
                                                       - 70 -


(3) Beauftragte der Emittentin. Die Emissionsstelle und die     (3) Agents of the Issuer. The Fiscal Agent and the Paying
Zahlstelle[n] handeln ausschließlich als Beauftragte der        Agent[s] act solely as agents of the Issuer and do not have
Emittentin und übernehmen keinerlei Verpflichtungen             any obligations towards or relationship of agency or trust to
gegenüber den Gläubigern; es wird kein Auftrags- oder           any Holder.
Treuhandverhältnis zwischen ihnen und den Gläubigern
begründet.

                          §7                                                               §7
                       STEUERN                                                          TAXATION

Sämtliche auf die Pfandbriefe zu zahlenden Beträge sind         All amounts payable in respect of the Pfandbriefe shall be
ohne Einbehalt oder Abzug von oder aufgrund von                 made without withholding or deduction for or on account
gegenwärtigen oder zukünftigen Steuern oder sonstigen           of any present or future taxes or duties of whatever nature
Abgaben gleich welcher Art zu leisten, die von oder in der      imposed or levied by way of withholding or deduction at
Bundesrepublik Deutschland oder für deren Rechnung oder         source by or on behalf of the Federal Republic of Germany
von oder für Rechnung einer politischen Untergliederung         or any political subdivision or any authority thereof or
oder Steuerbehörde derselben auferlegt oder erhoben             therein having power to tax unless such withholding or
werden, es sei denn, ein solcher Einbehalt oder Abzug ist       deduction is required by law.
gesetzlich vorgeschrieben.

                       §8                                                              §8
                 VORLEGUNGSFRIST                                               PRESENTATION PERIOD

Die in § 801 Absatz 1 Satz 1 Bürgerliches Gesetzbuch            The presentation period provided in § 801 paragraph 1,
bestimmte Vorlegungsfrist wird für die Pfandbriefe auf          sentence 1 German Civil Code (Bürgerliches Gesetzbuch)
zehn Jahre abgekürzt                                            is reduced to ten years for the Pfandbriefe.

                   §9                                                                §9
      BEGEBUNG WEITERER PFANDBRIEFE,                                    FURTHER ISSUES, PURCHASES AND
         ANKAUF UND ENTWERTUNG                                                 CANCELLATION

(1) Begebung weiterer Pfandbriefe. Die Emittentin ist           (1) Further Issues. The Issuer may from time to time,
berechtigt, jederzeit ohne Zustimmung der Gläubiger             without the consent of the Holders, issue further
weitere     Pfandbriefe    mit   gleicher   Ausstattung         Pfandbriefe having the same terms and conditions as the
(gegebenenfalls mit Ausnahme des Tags der Begebung, des         Pfandbriefe in all respects (or in all respects except for the
Verzinsungsbeginns und/oder des Ausgabepreises) in der          issue date, interest commencement date and/or issue price)
Weise zu begeben, dass sie mit diesen Pfandbriefen eine         so as to form a single Series with the Pfandbriefe.
einheitliche Serie bilden.

(2) Ankauf. Die Emittentin ist berechtigt, Pfandbriefe im       (2) Purchases. The Issuer may at any time purchase
Markt oder anderweitig zu marktgerechten Preisen zu             Pfandbriefe in the open market or otherwise and at prices in
kaufen. Die von der Emittentin erworbenen Pfandbriefe           line with the market. Pfandbriefe purchased by the Issuer
können nach Wahl der Emittentin von ihr gehalten,               may, at the option of the Issuer, be held, resold or
weiterverkauft oder bei der Emissionsstelle zwecks              surrendered to the Fiscal Agent for cancellation. If
Entwertung eingereicht werden. Sofern diese Käufe durch         purchases are made by tender, tenders for such Pfandbriefe
öffentliches Angebot erfolgen, muss dieses öffentliche          must be made available to all Holders of such Pfandbriefe
Angebot allen Gläubigern der Pfandbriefe gemacht werden.        alike.

(3) Entwertung. Sämtliche vollständig zurückgezahlten           (3) Cancellation. All Pfandbriefe redeemed in full shall be
Pfandbriefe sind unverzüglich zu entwerten und können           cancelled forthwith and may not be reissued or resold.
nicht wiederbegeben oder wiederverkauft werden.

                        § 10                                                               § 10
                   MITTEILUNGEN                                                          NOTICES

[Sofern    eine     Mitteilung durch  Elektronische             [If notices may not be given by means of electronic
Publikation auf der Website der betreffenden Börse              publication on the website of the relevant stock
nicht möglich ist, einfügen:                                    exchange insert:

[(1)] Bekanntmachung. Alle die Pfandbriefe betreffenden         [(1)] Publication. All notices concerning the Pfandbriefe
Mitteilungen sind, soweit gesetzlich erforderlich, im           shall be published, to the extent legally required, in the
Bundesanzeiger [sowie in einer führenden Tageszeitung           federal gazette (Bundesanzeiger) [and in a leading daily
                                                          - 71 -


mit allgemeiner Verbreitung in [Deutschland] [anderen              newspaper having general circulation in [Germany] [specify
Ort einfügen], voraussichtlich [die Börsen-Zeitung]                other location] [and by means of electronic publication on
[andere Zeitung mit allgemeiner Verbreitung einfügen]]             the internet website of the Issuer (www.ing-diba.de)]. [These
zu veröffentlichen [und erfolgen durch elektronische               newspapers are expected to be the [Börsen-Zeitung] [insert
Publikation auf der Website der Emittentin (www.ing-               other      applicable      newspaper      having     general
diba.de)]. Jede derartige Mitteilung gilt mit dem Tag der          circulation]]]. Any notice so given will be deemed to have
Veröffentlichung (oder bei mehreren Veröffentlichungen             been validly given on the date of such publication (or, if
mit dem Tag der ersten solchen Veröffentlichung) als               published more than once, on the date of the first such
wirksam erfolgt.]                                                  publication).]

[Sofern    eine    Mitteilung durch   Elektronische                [If notices may be given by means of electronic
Publikation auf der Website der betreffenden Börse                 publication on the website of the relevant stock exchange
möglich ist, einfügen:                                             insert:

[(1)] Bekanntmachung. Alle die Pfandbriefe betreffenden            [(1)] Publication. All notices concerning the Pfandbriefe
Mitteilungen sind, soweit gesetzlich erforderlich, im              shall be published, to the extent legally required, in the
Bundesanzeiger in deutscher oder englischer Sprache zu             federal gazette (Bundesanzeiger) and will be made by means
veröffentlichen und erfolgen durch elektronische                   of electronic publication on the internet website of the
Publikation auf der Website der [betreffende Börse                 [insert relevant stock exchange] (www.[insert internet
einfügen] (www. [Internetadresse einfügen]) [und auf der           address]) [and on the internet website of the Issuer
Website der Emittentin (www.ing-diba.de)]. Jede derartige          (www.ing-diba.de)]. Any notice so given will be deemed to
Mitteilung gilt mit dem Tag der Veröffentlichung (oder bei         have been validly given on the day of such publication (or, if
mehreren Veröffentlichungen mit dem Tag der ersten                 published more than once, on the first day of such
solchen Veröffentlichung) als wirksam erfolgt.]                    publication).]

[Falls die Regularien der maßgeblichen Börse eine                  [In case the rules of the relevant stock exchange allow for
Mitteilung über das Clearing System zulassen,                      a publication via the Clearing System insert:
einfügen:

(2) Mitteilung an das Clearing System.                             (2) Notification to Clearing System.
Die Emittentin ist berechtigt, eine Veröffentlichung nach          The Issuer may, in lieu of publication set forth in paragraph
Absatz (1) durch eine Mitteilung an das Clearing System            (1) above, deliver the relevant notice to the Clearing System,
zur Weiterleitung an die Gläubiger zu ersetzen,                    for communication by the Clearing System to the Holders,
vorausgesetzt, dass die Regeln der Börse, an der die               provided that the rules of the stock exchange on which
Pfandbriefen notiert sind, diese Form der Mitteilung               Pfandbriefe are listed permit such form of notice. Any such
zulassen. Jede derartige Mitteilung gilt am [fünften] Tag          notice shall be deemed to have been given to the Holders on
nach dem Tag der Mitteilung an das Clearing System als             the [fifth] day after the day on which said notice was given
den Gläubigern mitgeteilt.]]                                       to the Clearing System.]]

                 § 11                                                                 § 11
   ANWENDBARES RECHT, ERFÜLLUNGSORT,                                APPLICABLE LAW, PLACE OF PERFORMANCE,
    GERICHTSSTAND UND GERICHTLICHE                                  PLACE OF JURISDICTION AND ENFORCEMENT
           GELTENDMACHUNG

(1) Anwendbares Recht. Form und Inhalt der Pfandbriefe             (1) Applicable Law. The Pfandbriefe, as to form and content,
sowie die Rechte und Pflichten der Gläubiger und der               and all rights and obligations of the Holders and the Issuer,
Emittentin bestimmen sich nach deutschem Recht.                    shall be governed by German law.

(2) Erfüllungsort. Erfüllungsort ist Frankfurt am Main.            (2) Place of Performance. Place of performance shall be
                                                                   Frankfurt am Main.

(3) Gerichtsstand. Nicht ausschließlich zuständig für              (3) Submission to Jurisdiction. The District Court
sämtliche im Zusammenhang mit den Pfandbriefen                     (Landgericht) in Frankfurt am Main shall have non-
entstehenden     Klagen      oder   sonstige    Verfahren          exclusive jurisdiction for any action or other legal
("Rechtsstreitigkeiten") ist das Landgericht Frankfurt am          proceedings ("Proceedings") arising out of or in connection
Main. Die Zuständigkeit des vorgenannten Gerichts ist              with the Pfandbriefe. The afore-mentioned court shall have
ausschließlich, soweit es sich um Rechtsstreitigkeiten             exclusive jurisdiction in case of Proceedings which are
handelt, die von Kaufleuten, juristischen Personen des             established by business people (Kaufleute), corporate bodies
öffentlichen Rechts, öffentlich-rechtlichen Sonder-                of public law (juristische Personen des öffentlichen Rechts),
vermögen und Personen ohne allgemeinen Gerichtsstand in            separate assets of public law (öffentlich-rechtliche
der Bundesrepublik Deutschland angestrengt werden. Die             Sondervermögen) and persons for which the place of
deutschen Gerichte sind ausschließlich zuständig für die           jurisdiction is not the Federal Republic of Germany. The
                                                        - 72 -


Kraftloserklärung abhanden gekommener oder vernichteter          German courts shall have exclusive jurisdiction over lost or
Pfandbriefe.                                                     destroyed Pfandbriefe.

(4) Gerichtliche Geltendmachung. Jeder Gläubiger von             (4) Enforcement. Any Holder of Pfandbriefe may in any
Pfandbriefen ist berechtigt, in jedem Rechtsstreit gegen die     proceedings against the Issuer, or to which such Holder and
Emittentin oder in jedem Rechtsstreit, in dem der Gläubiger      the Issuer are parties, in his own name enforce his rights
und die Emittentin Partei sind, seine Rechte aus diesen          arising under such Pfandbriefe on the basis of (i) a statement
Pfandbriefen im eigenen Namen auf der folgenden                  issued by the Custodian with whom such Holder maintains a
Grundlage geltend zu machen: (i) er bringt eine                  securities account in respect of Pfandbriefe (a) stating the
Bescheinigung der Depotbank bei, bei der er für die              full name and address of the Holder, (b) specifying the
Pfandbriefe ein Wertpapierdepot unterhält, welche (a) den        aggregate principal amount of Pfandbriefe credited to such
vollständigen Namen und die vollständige Adresse des             securities account on the date of such statement and (c)
Gläubigers enthält, (b) den Gesamtnennbetrag der                 confirming that the Custodian has given written notice to the
Pfandbriefe bezeichnet, die unter dem Datum der                  Clearing System containing the information pursuant to (a)
Bestätigung auf dem Wertpapierdepot verbucht sind und            and (b) or (ii) a copy of the Pfandbrief in global form
(c) bestätigt, dass die Depotbank gegenüber dem Clearing         certified as being a true copy by a duly authorised officer of
System eine schriftliche Erklärung abgegeben hat, die die        the Clearing System or a depositary of the Clearing System,
vorstehend unter (a) und (b) bezeichneten Informationen          without the need for production in such proceedings of the
enthält; oder (ii) er legt eine Kopie der die betreffenden       actual records or the Global Note representing the
Pfandbriefe verbriefenden Globalurkunde vor, deren               Pfandbriefe. For purposes of the foregoing, "Custodian"
Übereinstimmung          mit      dem      Original     eine     means any bank or other financial institution of recognised
vertretungsberechtigte Person des Clearing System oder des       standing authorised to engage in securities custody business
Verwahrers des Clearing System bestätigt hat, ohne dass          with which the Holder maintains a securities account in
eine Vorlage der Originalbelege oder der die Pfandbriefe         respect of the Pfandbriefe and includes the Clearing System.
verbriefenden Globalurkunde in einem solchen Verfahren           Each Holder may, without prejudice of the forgoing, protect
erforderlich wäre. Für die Zwecke des Vorstehenden               and enforce his rights under the Pfandbriefe also in any
bezeichnet "Depotbank" jede Bank oder ein sonstiges              other way which is permitted in the country in which the
anerkanntes Finanzinstitut, das berechtigt ist, das              proceedings are initiated.
Wertpapierverwahrungsgeschäft zu betreiben und bei
der/dem der Gläubiger ein Wertpapierdepot für die
Pfandbriefe unterhält, einschließlich des Clearing Systems.
Unbeschadet des Vorstehenden kann jeder Gläubiger seine
Rechte aus den Pfandbriefen auch auf jede andere Weise
schützen oder geltend machen, die im Land, in dem der
Rechtsstreit eingeleitet wird, prozessual zulässig ist.

                          § 12                                                             § 12
                        SPRACHE                                                         LANGUAGE

Diese Emissionsbedingungen sind in [deutscher]                   These Terms and Conditions are written in the [German]
[englischer] Sprache abgefasst. [Eine Übersetzung in die         [English] language. [[A German] [An English] language
[deutsche] [englische] Sprache ist beigefügt. Der [deutsche]     translation has been appended. The [German] [English] text
[englische] Text ist bindend und maßgeblich. Die                 shall be prevailing and binding. The [German] [English]
Übersetzung in die [deutsche] [englische] Sprache ist            language translation is provided for convenience only.]
unverbindlich.]
                                                                   - 73 -


                                                                                              Part E.IV. of the Base Prospectus
                                                                                                          Form of Final Terms

Full information on the Issuer and the offer of the Pfandbriefe is only available on the basis of the
combination of these Final Terms, the relevant Terms and Conditions of the Pfandbriefe and the Base
Prospectus dated 14 May 2012, including any supplements thereto, if any (the "Base Prospectus").
Vollständige Informationen über die Emittentin und das Angebot der Pfandbriefe sind ausschließlich auf der
Grundlage der Endgültigen Bedingungen, der Emissionsbedingungen der Pfandbriefe, zusammen mit dem
Prospekt vom 14. Mai 2012 und etwaiger Nachträge dazu (der "Basisprospekt"), erhältlich.

                                                           Final Terms
                                                      Endgültige Bedingungen

                                                                  [Date]
                                                                 [Datum]

                                          [Title of relevant Tranche of Pfandbriefe]
                                                     issued pursuant to the
                                   [Bezeichnung der betreffenden Tranche der Pfandbriefe]
                                                     begeben aufgrund des

                                                  Euro 10,000,000,000
                                          Programme for the Issuance of Pfandbriefe

                                                                  of
                                                             ING-DiBa AG

                                                         Dated 14 May 2012
                                                         Datiert 14. Mai 2012

                                                  Aggregate Principal Amount: [ ]
                                                     Gesamtnennbetrag: [ ]

                                                        Issue Price: [ ] per cent.
                                                          Ausgabepreis: [ ]%
                                                                               1
                                                            Issue Date: [ ]
                                                           Begebungstag: [ ]1

                                                              Series No.: [ ]
                                                              Serien-Nr.: [ ]

                                                             Tranche No.: [ ]
                                                            Tranchen-Nr.: [ ]




1
    The Issue Date is the date of payment and settlement of the Pfandbriefe. In the case of free delivery, the Issue Date is the delivery date.
    Der Begebungstag ist der Tag, an dem die Pfandbriefe begeben und bezahlt werden. Bei freier Lieferung ist der Begebungstag der Tag
    der Lieferung.
                                                                    - 74 -


These Final Terms are dated [ ] and contain the final terms of an issue of Pfandbriefe under the
Euro 10,000,000,000 Programme for the Issuance of Pfandbriefe dated 14 May 2012 of ING-DiBa AG
(the "Programme").
Diese Endgültigen Bedingungen vom [ ] enthalten die endgültigen Bedingungen einer Emission von
Pfandbriefen unter dem Euro 10.000.000.000 Programm für die Emission von Pfandbriefen vom
14. Mai 2012 der ING-DiBa AG (das "Programm").

I. TERMS AND CONDITIONS
I. EMISSIONSBEDINGUNGEN

[This part of the Final Terms is to be read in conjunction with the Terms and Conditions of the Pfandbriefe
(the "Terms and Conditions") set forth in the [Base Prospectus]2 [base prospectus dated [ ] 3, including any
supplements thereto]4. Capitalised terms not defined herein shall have the meanings specified in the Terms
and Conditions.
Dieser Teil der Endgültigen Bedingungen ist in Verbindung mit den Emissionsbedingungen der Pfandbriefe
(die "Emissionsbedingungen") zu lesen, die im [Basisprospekt]2 [Basisprospekt vom [ ]3, einschließlich
etwaiger Nachträge dazu]4 enthalten sind. Begriffe, die in den Emissionsbedingungen definiert sind, haben
die gleiche Bedeutung, wenn sie in diesen Endgültigen Bedingungen verwendet werden.

All provisions in the Terms and Conditions corresponding to items in these Final Terms which are either
not selected or completed or which are deleted shall be deemed to be deleted from the terms and conditions
applicable to the Pfandbriefe.5
Sämtliche Bestimmungen der Emissionsbedingungen, die sich auf Elemente dieser Endgültigen
Bedingungen beziehen und die weder angekreuzt noch ausgefüllt werden oder die gestrichen werden,
gelten als in den auf die Pfandbriefe anwendbaren Emissionsbedingungen gestrichen.] 5

[The conditions applicable to the Pfandbriefe (the "Conditions") are attached to these Final Terms.6
Die für die Pfandbriefe geltenden Bedingungen (die "Bedingungen") sind diesen Endgültigen Bedingungen
beigefügt.6]

All references in this part of these Final Terms to numbered Articles and sections are to Articles and
sections of the Terms and Conditions.
Bezugnahmen in diesem Teil der Endgültigen Bedingungen auf Paragraphen und Absätze beziehen sich auf
die Paragraphen und Absätze der Emissionsbedingungen.
                            7
Form of Conditions
Form der Bedingungen7


2
    Insert if this issue is not an increase of an existing issue which was issued under a base prospectus with an earlier date.
    Einzufügen, wenn es sich bei der aktuellen Emission nicht um die Aufstockung einer Emission handelt, die in Verbindung mit einem
    früheren Basisprospekt begeben wurde.
3
    If this issue is an increase of an existing issue which was issued under a base prospectus with an earlier date, insert date of this earlier
    base prospectus here.
    Wenn es sich bei der aktuellen Emission um die Aufstockung einer Emission handelt, die in Verbindung mit einem früheren Basisprospekt
    begeben wurde, ist hier das Datum dieses früheren Basisprospekts einzusetzen.
4
    Insert if this issue is an increase of an existing issue which was issued under a base prospectus with an earlier date. The Terms and
    Conditions set out in the base prospectus dated 31 May 2011 relating to the Programme are incorporated by reference into this Base
    Prospectus as set out under "General Information – Incorporation by Reference".
    Einzufügen, wenn es sich bei der aktuellen Emission um die Aufstockung einer Emission handelt, die in Verbindung mit einem früheren
    Basisprospekt begeben wurde. Die Emissionsbedingungen, wie sie im Basisprospekt vom 31. Mai 2011 im Zusammenhang mit dem
    Programm dargestellt sind, wurden in Form des Verweises in diesen Basisprospekt einbezogen – wie unter "General Information –
    Incorporation by Reference" dargestellt.
5
    To be inserted in the case of Long-Form Conditions.
    Im Fall von nicht-konsolidierten Bedingungen einzufügen.
6
    To be inserted in the case of Integrated Conditions.
    Im Fall von konsolidierten Bedingungen einzufügen.
7
    To be determined in consultation with the Issuer. It is anticipated that Long-Form Conditions will generally be used for Pfandbriefe sold
    on a non-syndicated basis and which are not publicly offered. Integrated Conditions will generally be used for Pfandbriefe sold and
    distributed on a syndicated basis. Integrated Conditions will be required where the Pfandbriefe are to be publicly offered or to be listed on
    a stock exchange.
    Die Form der Bedingungen ist in Abstimmung mit der Emittentin festzulegen. Es ist vorgesehen, dass nicht-konsolidierte Bedingungen
    für Pfandbriefe, die auf nicht syndizierter Basis verkauft und die nicht öffentlich zum Verkauf angeboten werden, verwendet werden.
    Konsolidierte Bedingungen werden in der Regel für Pfandbriefe verwendet, die auf syndizierter Basis verkauft und vertrieben werden.
                                                                 - 75 -


□         Long-Form
          Nicht-konsolidierte Bedingungen

□         Integrated
          Konsolidierte Bedingungen
                                8
Language of Conditions
Sprache der Bedingungen8

□         German only
          ausschließlich Deutsch

□         English only
          ausschließlich Englisch

□         German and English (German prevailing)
          Deutsch und Englisch (deutscher Text maßgeblich)

□         English and German (English prevailing)
          Englisch und Deutsch (englischer Text maßgeblich)

CURRENCY, SPECIFIED DENOMINATION, FORM, CERTAIN DEFINITIONS (§ 1)
WÄHRUNG, FESTGELEGTE STÜCKELUNG, FORM, DEFINITIONEN (§ 1)

Currency and Specified Denomination
Währung und Festgelegte Stückelung

Specified Currency                                                                                      Euro ("EUR")
Festgelegte Währung                                                                                     Euro ("EUR")

Aggregate Principal Amount
Gesamtnennbetrag

     Tranche to become part of an existing Series:                                                      [Yes][No]
     Zusammenfassung der Tranche mit einer bestehenden Serie:                                           [Ja][Nein]

     [(i)] Aggregate Principal Amount of Series:                                                        []
          Gesamtnennbetrag der Serie:                                                                   []

     [(ii) Aggregate Principal Amount of Tranche:                                                       []
           Gesamtnennbetrag der Tranche:                                                                [ ]]

Specified Denomination9                                                                                 [EUR 100,000] [ ]
Festgelegte Stückelung9                                                                                 [EUR 100.000 ] [ ]

Number of Pfandbriefe to be issued in the Specified Denomination                                        []
Anzahl der in der Festgelegten Stückelung auszugebenden Pfandbriefe                                     []




    Konsolidierte Bedingungen sind für Pfandbriefe zu verwenden, die öffentlich angeboten oder zum Handel zugelassen werden.
8
    To be determined in consultation with the Issuer.
    In Abstimmung mit der Emittentin festzulegen.
9
    Pfandbriefe which are to be admitted to trading on a regulated market within the European Economic Area or offered to the public in a
    Member State of the European Economic Area in circumstances which require the publication of a prospectus under the Prospectus
    Directive must have a Specified Denomination of at least Euro 100,000.
    Pfandbriefe, die an einer Wertpapierbörse innerhalb des Europäischen Wirtschaftsraumes zum Handel an einem geregelten Markt
    zugelassen werden oder die in einem Mitgliedsstaat des Europäischen Wirtschaftsraumes unter Umständen öffentlich angeboten werden,
    die die Veröffentlichung eines Prospekts unter der Prospektrichtlinie erfordern, müssen eine Stückelung von mindestens Euro 100.000
    haben.
                                                      - 76 -


Bearer Pfandbriefe
Inhaber-Pfandbriefe

■         Bearer Pfandbriefe
          Inhaber-Pfandbriefe

          ■          Mortgage Pfandbriefe
                     Hypothekenpfandbriefe
                        10
□         TEFRA C
          TEFRA C10

□         Permanent Global Note
          Dauerglobalurkunde

□         Temporary Global Note exchangeable for:
          Vorläufige Globalurkunde austauschbar gegen:

          □          Definitive Pfandbriefe
                     Einzelurkunden

          □          Definitive Pfandbriefe and Collective Global Note
                     Einzelurkunden und Sammelglobalurkunden

□         TEFRA D
          TEFRA D

          Temporary Global Note exchangeable for:
          Vorläufige Globalurkunde austauschbar gegen:

          □          Permanent Global Note
                     Dauerglobalurkunde

          □          Definitive Pfandbriefe
                     Einzelurkunden

          □          Definitive Pfandbriefe and Collective Global Note
                     Einzelurkunden und Sammelglobalurkunden

Classical Global Note:                                         Yes
Classical Global Note:                                         Ja

Certain Definitions
Definitionen

Clearing System
Clearing System

■         Clearstream Banking AG, Frankfurt
          Mergenthalerallee 61
          D-65760 Eschborn

          Clearstream Banking AG, Frankfurt
          Mergenthalerallee 61
          D-65760 Eschborn


10
     See also "Selling Restrictions" below.
     Siehe auch "Verkaufsbeschränkungen".
                                                 - 77 -


Relevant Financial Centres                                TARGET[,] [ ]
Relevante Finanzzentren                                   TARGET[,] [ ]

Calculation Agent                                         [Yes] [No]
Berechnungsstelle                                         [Ja] [Nein]

□      Fiscal Agent
       Emissionsstelle

□      Other (specify)                                    []
       Sonstige (angeben)                                 []


INTEREST (§ 3)
ZINSEN (§ 3)

□      Fixed Rate Pfandbriefe
       Festverzinsliche Pfandbriefe

       Rate of Interest and Interest Payment Dates
       Zinssatz und Zinszahlungstage

       Rate of Interest                                   [ ] per cent. per annum [payable [annually/
                                                          semi-annually/
                                                          quarterly/monthly] [in arrear]]
       Zinssatz                                           [ ] % per annum [zahlbar [jährlich/ halbjährlich /
                                                          vierteljährlich/monatlich] [nachträglich]]

       Interest Commencement Date                         []
       Verzinsungsbeginn                                  []

       Fixed Interest Date(s)                             []
       Festzinstermin(e)                                  []

       First Interest Payment Date                        []
       Erster Zinszahlungstag                             []

       Initial Broken Amount(s) (per Specified            []
       Denomination)
       Anfängliche(r) Bruchteilzinsbetrag (-beträge)
       (für jede Festgelegte Stückelung)                  []

       Fixed Interest Date preceding the Maturity Date    []
       Festzinstermin, der dem Fälligkeitstag
       vorangeht                                          []

       Final Broken Amount(s) (per Specified
       Denomination)                                      []
       Abschließende(r) Bruchteilzinsbetrag
       (-beträge) (für jede Festgelegte Stückelung)       []
                                                                    - 78 -

                                        11
           Determination Date(s)                                             [ ] in each year
           Feststellungstermin(e)11                                          [ ] in jedem Jahr

□          Floating Rate Pfandbriefe
           Variabel verzinsliche Pfandbriefe

           Interest Payment Dates
           Zinszahlungstage

           Interest Commencement Date                                        []
           Verzinsungsbeginn                                                 []

           Specified Interest Payment Dates                                  []
           Festgelegte Zinszahlungstage                                      []

           Specified Interest Period(s)                                      [ ] [weeks/months/other - specify]
           Festgelegte Zinsperiode(n)                                        [ ] [Wochen/ Monate/ andere – angeben]

Rate of Interest
Zinssatz

           □            Screen Rate Determination
                        Bildschirmfeststellung

           □            EURIBOR® (Brussels
                        time/TARGET Business
                        Day/Interbank market in the Euro-
                        Zone)                                                []
                        EURIBOR® (Brüsseler
                        Ortszeit/TARGET-
                        Geschäftstag/Interbanken-Markt in
                        der Euro-Zone)                                       []

                        [Euro Interbank Offered Rate
                        (EURIBOR®) means the rate for
                        deposits in Euros for a specified
                        period
                        Euro Interbank Offered Rate
                        (EURIBOR®)        bezeichnet   den
                        Angebotssatz für Einlagen in Euro
                        für einen bestimmten Zeitraum]

                        Screen page                                          []
                        Bildschirmseite                                      []




11
     Insert regular interest dates ignoring issue date or maturity date in the case of a long or short first or last coupon. N.B. Only relevant
     where Day Count Fraction is Actual/Actual (ICMA).
     Einzusetzen sind die festen Zinstermine, wobei im Falle eines langen oder kurzen ersten bzw. letzten Zinsscheins der Tag der Begebung
     bzw. der Fälligkeitstag nicht zu berücksichtigen sind. N.B.: Nur einschlägig im Falle des Zinstagequotienten Actual/Actual (ICMA).
                                                - 79 -


       □        LIBOR (London time/London
                Business Day/City of
                London/London Office/London
                Interbank market)                        []
                LIBOR (Londoner Ortszeit/Londoner
                Geschäftstag/City of
                London/Londoner
                Geschäftsstelle/Londoner
                Interbanken-Markt)                       []

                [London Interbank Offered Rate
                (LIBOR) means the rate for deposits
                in various currencies for a specified
                period
                London Interbank Offered Rate
                (LIBOR)         bezeichnet       den
                Angebotssatz für Einlagen in Euro
                für einen bestimmten Zeitraum]

                Screen page                              []
                Bildschirmseite                          []

       □        Other (specify)                          []
                Sonstige (angeben)                       []

                Screen page                              []
                Bildschirmseite                          []

Margin                                                   [[ ] per cent. per annum][None]
Marge                                                    [[ ] % per annum][Keine]

       □        plus
                zuzüglich

       □        minus
                abzüglich

Interest Determination Date
Zinsfestlegungstag

       □        [second] [other number of days]
                [TARGET] [London] [Other
                (specify)] Business Day prior to
                commencement of Interest Period
                [zweiter] [andere Anzahl von Tagen]
                [TARGET] [London] [Sonstige
                (angeben)] Geschäftstag vor Beginn
                der jeweiligen Zinsperiode

       □        Other (specify)                          []
                Sonstige (angeben)                       []

                Reference Banks (if other than as
                specified in § 3(2)) (specify)           []
                Referenzbanken (sofern abweichend
                von § 3 (2)) (angeben)                   []
                                                        - 80 -


          □             Other Method of Determination
                        (insert details (including Margin,
                        Interest Determination Date,
                        Reference Banks, fall-back
                        provisions))                             []
                        Andere Methoden der Bestimmung
                        (Einzelheiten angeben (einschließlich
                        Zinsfestlegungstag, Marge,
                        Referenzbanken,
                        Ausweichbestimmungen))                   []

Minimum Rate of Interest
Mindestzinssatz

          □             Minimum Rate of Interest                 [ ] per cent. per annum
                        Mindestzinssatz                          [ ] % per annum

□         Zero Coupon Pfandbriefe
          Nullkupon-Pfandbriefe

          Accrual of Interest                                    []
          Auflaufende Zinsen                                     []

          Amortisation Yield                                     []
          Emissionsrendite                                       []

Day Count Fraction
Zinstagequotient

□         Actual/365 (Actual/Actual)
                                       12
□         Actual/Actual (ICMA)

□         Actual/365 (Fixed)

□         Actual/360

□         30/360 or 360/360 (Bond Basis)

□         30E/360 (Eurobond Basis)

PAYMENTS (§ 4)
ZAHLUNGEN (§ 4)

Payment Business Day
Zahltag

Business Day Convention
Geschäftstagskonvention

□         Modified Following Business Day Convention
          Modifizierte folgender Geschäftstag-Konvention




12
     Applicable only to Fixed Rate Pfandbriefe.
     Nur auf festverzinsliche Pfandbriefe anwendbar.
                                                - 81 -


□      Floating Rate Note-Convention (specify period(s))      [[ ] [weeks/months]
                                                              [other – specify]
       Floating Rate Note-Konvention (Zeitraum angeben)       [[ ] [Wochen/Monate]
                                                              [andere – angeben]

□      Following Business Day Convention
       Folgender Geschäftstag-Konvention

□      Preceding Business Day Convention
       Vorangegangener Geschäftstag-Konvention

Adjusted / Unadjusted
Mit oder ohne Anpassung

□      Adjusted
       Mit Anpassung

□      Unadjusted
       Ohne Anpassung

Relevant Financial Centre(s) (specify all)                    TARGET[,] [ ]
Relevante(s) Finanzzentren(um) (alle angeben)                 TARGET[,] [ ]

REDEMPTION (§ 5)
RÜCKZAHLUNG (§ 5)

Final Redemption
Rückzahlung bei Endfälligkeit

Maturity Date                                                 []
Fälligkeitstag                                                []

Redemption Month                                              []
Rückzahlungsmonat                                             []

Final Redemption Amount                                       []
Rückzahlungsbetrag                                            []

□      Specified Denomination
       Festgelegte Stückelung

□      Final Redemption Amount (per Specified Denomination)   []
       Rückzahlungsbetrag (für jede Festgelegte Stückelung)   []

FISCAL AGENT [,] [AND] PAYING AGENTS [AND CALCULATION AGENT] (§ 6)
EMISSIONSSTELLE [,] [UND] ZAHLSTELLEN [UND BERECHNUNGSSTELLE] (§ 6)

Fiscal Agent
Emissionsstelle

□      ING-DiBa AG
       Theodor-Heuss-Allee 106
       D-60468 Frankfurt am Main
       ING-DiBa AG
       Theodor-Heuss-Allee 106
       D-60468 Frankfurt am Main
                                                                - 82 -


□          Other:                                                                               [specify]
           Andere:                                                                              [angeben]

Calculation Agent/specified office                                                              [ING-DiBa AG
                                                                                                Theodor-Heuss-Allee 106
                                                                                                D-60468 Frankfurt am Main]
                                                                                                [ ]
Berechnungsstelle/bezeichnete Geschäftsstelle                                                   [ING-DiBa AG
                                                                                                Theodor-Heuss-Allee 106
                                                                                                D-60468 Frankfurt am Main]
                                                                                                [ ]

Required location of Calculation Agent (specify)                                                []
Vorgeschriebener Ort für Berechnungsstelle (angeben)                                            []

□          Paying Agents
           Zahlstellen

□          Additional Paying Agent(s)/specified office(s)                                       []
           Zusätzliche Zahlstelle(n)/bezeichnete Geschäftsstelle(n)                             []

NOTICES (§ 10)
MITTEILUNGEN (§ 10)

Place and medium of publication
Ort und Medium der Bekanntmachung

□          Federal Gazette (Bundesanzeiger)
           Bundesanzeiger

□          Germany (Börsen-Zeitung)
           Deutschland (Börsen-Zeitung)

□          Other (specify)                                                                      []
           Sonstige (angeben)                                                                   []

□          Internetadresse                                                                      [ specify]
           Internet address                                                                     [angeben]

□          Other (specify)                                                                      []
           Sonstige (angeben)                                                                   []

□          Clearing System
           Clearing System

II.       ADDITIONAL DISCLOSURE REQUIREMENTS
II.       ZUSÄTZLICHE ANGABEN
                                   13
A.          RISK FACTORS                                                                        [specify details]
A.          Risikofaktoren13                                                                    [Einzelheiten einfügen]

B.          KEY INFORMATION
B.          WICHTIGE INFORMATIONEN



13
      Include only issue specific risk factors which are not covered under the section risk factors in the Base Prospectus.
      Ausschließlich für eine spezifische Emission maßgebliche Risikofaktoren angeben, die nicht bereits im Basisprospekt im Abschnitt
      Risikofaktoren abgedeckt wurden.
                                                                     - 83 -


Material Interests, including conflicting ones, of natural and legal persons                            [specify, if any]
involved in the issue/offer                                                                             [Einzelheiten einfügen, sofern
Wesentliche Interessen, einschließlich Interessenkonflikte, von Seiten                                  vorhanden]
natürlicher und juristischer Personen, die an der Emission/dem Angebot
beteiligt sind

C.       INFORMATION CONCERNING THE PFANDBRIEFE TO
         BE ADMITTED TO TRADING
C.       INFORMATIONEN ÜBER DIE ZUM HANDEL
         ZUZULASSENDEN PFANDBRIEFE

Securities Identification Numbers
Wertpapier-Kenn-Nummern

           Common Code                                                                                  []
           Common Code                                                                                  []

           ISIN Code                                                                                    []
           ISIN Code                                                                                    []

           German Securities Code                                                                       []
           Wertpapier-Kenn-Nummer (WKN)                                                                 []

           Any other securities number                                                                  []
           Sonstige Wertpapier-Kenn-Nummer                                                              []
                            14
Yield on issue price                                                                                    []
Emissionsrendite14                                                                                      []

Method of Distribution
Vertriebsmethode

□          Non-Syndicated
           Nicht syndiziert

□          Syndicated
           Syndiziert

Management Details
Einzelheiten bezüglich der Dealer

Dealer/Management Group (specify)                                                                       [insert name and address]
Dealer/Bankenkonsortium (angeben)                                                                       [Name und Adresse einzufügen]

Commissions                                                                                             []
Provisionen                                                                                             []

Management/Underwriting Commission (specify)                                                            []
Management- und Übernahmeprovision (angeben)                                                            []

Selling Concession (specify)                                                                            []
Verkaufsprovision (angeben)                                                                             []

Listing Commission (specify)                                                                            []
Börsenzulassungsprovision (angeben)                                                                     []


14
     Only applicable for Fixed Rate Pfandbriefe. The calculation of yield is carried out on the basis of the Issue Price.
     Nur für festverzinsliche Pfandbriefe anwendbar. Berechnung der Rendite erfolgt auf Basis des Ausgabepreises.
                                                  - 84 -


Estimate of the total expenses related to admission to trading              []
Angabe der geschätzten Gesamtkosten für die Zulassung zum Handel            []

Reasons for the offer and use of proceeds
(if different from the disclosure in the Base Prospectus in Part J of the
Base Prospectus – General Information – Use of Proceeds):                   [None / [specify details]]
Gründe für das Angebot und Verwendung der Emissionserlöse
(falls abweichend von den Angaben im Basisprospekt im Teil J des            [Keine / [Angabe von
Basisprospekts – General Information – Use of Proceeds):                    Einzelheiten]]

Other (specify)                                                             []
Andere (angeben)                                                            []

Stabilising Manager                                                         [insert details/None]
Kursstabilisierender Manager                                                [Einzelheiten einfügen/Keiner]

Stabilisation Period                                                        [insert commencement and end of
                                                                            the Stabilisation Period]
Stabilisierungszeitraum                                                     [Beginn      und     Ende  des
                                                                            Stabilisierungszeitraumes
                                                                            einfügen]

D.    ADMISSION TO TRADING AND DEALING
      ARRANGEMENTS
D.    ZULASSUNG ZUM HANDEL UND HANDELSREGELN

Listing(s) and admission to trading                                         [Yes] [No]
Börsenzulassung(en) und Zulassung zum Handel                                [Ja] [Nein]

□      Frankfurt Stock Exchange (regulated market)
       Frankfurter Wertpapierbörse (Regulierter Markt)

□      Other (insert details)
       Sonstige (Einzelheiten einfügen)

E.      ADDITIONAL INFORMATION
E.      ZUSÄTZLICHE INFORMATIONEN

[Where information has been sourced from a third party, provide             [insert respective wording]
confirmation that this information has been accurately reproduced and
that as far as the Issuer is aware and is able to ascertain from
information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or
misleading. In addition, the Issuer shall identify the source(s) of the
information.
Sofern Angaben von Seiten Dritter übernommen wurden, ist zu bestätigen,     [entsprechenden Wortlaut
dass diese Information korrekt wiedergegeben wurde und dass – soweit es     einfügen]
dem Emittenten bekannt ist und er aus den von dieser dritten Partei
veröffentlichten Informationen ableiten konnte – keine Tatsachen
unterschlagen wurden, die die wiedergegebenen Informationen unkorrekt
oder irreführend gestalten würden. Darüber hinaus ist/sind die Quelle(n)
der Informationen anzugeben.]

Post issuance information relating to an underlying                         [Not applicable] [specify details]
Informationen in Bezug auf einen Basiswert nach erfolgter Emission          [Nicht anwendbar] [Einzelheiten
                                                                            einfügen]
                                                               - 85 -


Supplemental Tax Disclosure (specify)                                                          []
Zusätzliche Steueroffenlegung (einfügen)                                                       []

Selling Restrictions
Verkaufsbeschränkungen

□         TEFRA C
          TEFRA C

□         TEFRA D
          TEFRA D

□         Neither TEFRA C nor TEFRA D
          Weder TEFRA C noch TEFRA D
                                                 15
Additional selling restrictions (specify)                                                      []
Zusätzliche Verkaufsbeschränkungen (angeben)15                                                 []

□         Rating                                                                               [See Part J of the Base
                                                                                               Prospectus][The Pfandbriefe to
                                                                                               be issued [have been] [are
                                                                                               expected to be] rated:
                                                                                               [Moody’s: [ ]]
                                                                                               [other: [ ]]]
                                                                                               [[Each such/The] rating agency is
                                                                                               established in the European
                                                                                               Untion and [has applied to be /
                                                                                               is] registered under Regulation
                                                                                               (EC) no 1060/2009 of the
                                                                                               European Parliament and of
                                                                                               Council of 16 September 2009
                                                                                               on credit rating agencies as
                                                                                               amended by Regulation (EU)
                                                                                               No. 513/2011.]
          Rating                                                                               [Siehe     Abschnitt      J     des
                                                                                               Basisprospekts]       [Die        zu
                                                                                               begebenden Pfandbriefe [haben]
                                                                                               [werden           voraussichtlich]
                                                                                               folgendes Rating [erhalten]:
                                                                                               [Moody’s: [ ]]
                                                                                               [andere]: [ ]]]
                                                                                               [[Jede      dieser      /      Die]
                                                                                               Ratingagentur[en] hat ihren Sitz
                                                                                               innerhalb der Europäischen
                                                                                               Gemeinschaft und [hat einen
                                                                                               Antrag auf Registrierung / ist]
                                                                                               gemäß der Verordnung (EG) Nr.
                                                                                               1060/2009 des Europäischen
                                                                                               Parlaments und des Rates vom
                                                                                               16. September 2009 über
                                                                                               Ratingagenturen wie durch
                                                                                               Verordnung (EU) 513/2011
                                                                                               geändert [gestellt / registriert].]

Consent to the use of the Base Prospectus
Each Dealer and/or financial intermediary appointed by such Dealer                             [Not Applicable] [Yes, during

15
     German language text optional (unless "Language of Conditions" selected above is "German only".
     Deutschsprachiger Text ist fakultativ (soweit nicht unter obenstehender Option "Sprache der Bedingungen" "ausschließlich Deutsch"
     gewählt wurde) .
                                                                    - 86 -


placing or subsequently reselling the Pfandbriefe is entitled to use and to                            the period from, and including, [
rely upon the Base Prospectus. The Base Prospectus may only be                                         ] until, and including, [ ]] [No]
delivered to potential investors together with all supplements published
before the respective date of such delivery. Any supplement to the Base
Prospectus is available for viewing in electronic form on the website of
the Issuer (www.ing.de). When using the Base Prospectus, each Dealer
and/or relevant financial intermediary must ensure that it complies with
all applicable laws and regulations in force in the respective jurisdiction at
the time.
Einwilligung zur Nutzung des Prospektes
Jeder Platzeur und/oder jeder durch einen solchen Platzeur beauftragte                                 [Nicht anwendbar] [Ja, im
Finanzintermediär, der die Pfandbriefe platziert oder nachfolgend weiter                               Zeitraum von [ ] bis [ ]] [Nein]
verkauft, ist berechtigt, den Basisprospekt zu nutzen und sich darauf zu
berufen. Der Basisprospekt darf potentiellen Investoren nur zusammen
mit sämtlichen bis zum Datum der jeweiligen Übergabe veröffentlichten
Nachträgen übergeben werden. Jeder Nachtrag zum Basisprospekt kann
in elektronischer Form auf der Internetseite der der Emittentin
(www.ing.de) eingesehen werden. Bei der Nutzung des Basisprospektes
hat jeder Platzeur und/oder jeweilige Finanzintermediär sicherzustellen,
dass er alle anwendbaren, in der jeweiligen Jurisdiktion zum betreffenden
Zeitpunkt geltenden Gesetze und Rechtsvorschriften beachtet.
             16
[Listing:
Börsenzulassung:16

The above Final Terms comprise the details required to list this issue of Pfandbriefe under the
Euro 10,000,000,000 Programme for the Issuance of Pfandbriefe of ING-DiBa AG (as from [insert Issue
Date for the Pfandbriefe]).
Die vorstehenden Endgültigen Bedingungen enthalten die Angaben, die für die Zulassung dieser Emission
von Pfandbriefen unter dem genehmigten Euro 10.000.000.000 Programm für die Emission von
Pfandbriefen der ING-DiBa AG (ab dem [Begebungstag der Pfandbriefe einfügen]) erforderlich sind.]

The Issuer accepts responsibility for the information contained in these Final Terms.
Die Emittentin übernimmt die Verantwortung für die in diesen Endgültigen Bedingungen enthaltenen
Informationen.

Signed on behalf of the Issuer
Unterzeichnet im Namen der Emittentin

By:                                                                  By:
durch                                                                durch

Duly authorised                                                      Duly authorised
ordnungsgemäß bevollmächtigt                                         ordnungsgemäß bevollmächtigt




16
     Include only in the version of the Final Terms which is submitted to the relevant stock exchange in the case of Pfandbriefe to be listed on
     such stock exchange.
     Nur in derjenigen Fassung der Endgültigen Bedingungen einzufügen, die der betreffenden Börse, bei der die Pfandbriefe zugelassen
     werden sollen, vorgelegt wird.
                                                  - 87 -


                                                                         Part F of the Base Prospectus
                                                                    Information relating to Pfandbriefe

                        INFORMATION RELATING TO PFANDBRIEFE

The following is a description condensed to some of the more fundamental principles governing the
law regarding Pfandbriefe and Pfandbrief Banks in summary form and without addressing all the
laws' complexities and details. Accordingly, it is qualified in its entirety by reference to the applicable
laws.

Introduction

The Pfandbrief operations of the Issuer are subject to the Pfandbrief Act (Pfandbriefgesetz) of
22 May 2005, which has come into force on 19 July 2005 and was lastly amended on
9 December 2010 (the "Pfandbrief Act").

The Pfandbrief Act abolished the concept of specialist Pfandbrief institutions previously prevailing in
respect of the existing mortgage banks and ship mortgage banks. It established a new and uniform
regulatory regime for all German credit institutions with respect to the issuance of Pfandbriefe. Since
19 July 2005, all German credit institutions are permitted, subject to authorisation and further
requirements of the Pfandbrief Act, to engage in the Pfandbrief business and to issue Mortgage
Pfandbriefe, Public Pfandbriefe, Ship Pfandbriefe as well as Aircraft Pfandbriefe, and from such date
onwards, existing mortgage banks and ship mortgage banks are authorised to engage in most other
types of banking transactions, eliminating the limitations in respect of the scope of their permitted
business which existed in the past. The Pfandbrief Act thus creates a level playing field for all German
credit institutions including the Landesbanken, operating as universal banks and engaged in the
issuance of Pfandbriefe.

German credit institutions wishing to take up the Pfandbrief business must obtain special authorisation
under the German Banking Act (Kreditwesengesetz - the "Banking Act") from the Federal Financial
Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) and, for that purpose, must
meet some additional requirements as specified in the Pfandbrief Act. In the case of the Issuer, the
authorisation to act as a Pfandbrief Bank was granted on 3 December 2010.

For the purpose of this summary, banks authorised to issue Pfandbriefe will generally be referred to as
"Pfandbrief Banks" which is the term applied by the Pfandbrief Act.

Rules applicable to all types of Pfandbriefe

Pfandbriefe are standardised debt instruments issued by a Pfandbrief Bank. The quality and standards
of Pfandbriefe are strictly governed by provisions of the Pfandbrief Act and subject to the supervision
of the BaFin. Pfandbriefe generally are medium- to long-term bonds, typically with an original
maturity of two to ten years, which are secured or "covered" at all times by a pool of specified
qualifying assets (Deckung), as described below. Pfandbriefe are recourse obligations of the issuing
bank, and no separate vehicle is created for their issuance generally or for the issuance of any specific
series of Pfandbriefe. Traditionally, Pfandbriefe have borne interest at a fixed rate, but Pfandbrief
Banks are also issuing zero-coupon and floating rate Pfandbriefe, in some cases with additional
features such as step-up coupons, caps or floors. Most issues of Pfandbriefe are denominated in Euro.
A Pfandbrief Bank may, however, also issue Pfandbriefe in other currencies, subject to certain
limitations. Pfandbriefe may not be redeemed at the option of the Holders prior to maturity.

Pfandbriefe may either be Mortgage Pfandbriefe, Public Pfandbriefe, Ship Pfandbriefe or Aircraft
Pfandbriefe. The outstanding Pfandbriefe of any one of these types must be covered by a separate pool
of specified qualifying assets: a pool for Mortgage Pfandbriefe only, a pool for Public Pfandbriefe
only, a pool covering all outstanding Ship Pfandbriefe only, and a pool covering all outstanding
Aircraft Pfandbriefe (each a "Cover Pool"). An independent trustee appointed by the BaFin has wide
                                                  - 88 -


responsibilities in monitoring compliance by the Pfandbrief Bank with the provisions of the Pfandbrief
Act. In particular, the trustee monitors the sufficiency of the cover assets recorded in a register listing
the assets provided as cover from time to time in respect of the Pfandbriefe of any given type; such
register is maintained by the Pfandbrief Bank.

The aggregate principal amount of assets in each Cover Pool must at all times at least be equal to the
aggregate principal amount of the outstanding Pfandbriefe covered by such Cover Pool. Moreover, the
aggregate interest yield on any such Pool must at all times be at least equal to the aggregate interest
payable on all Pfandbriefe covered by such Cover Pool. In addition, the coverage of all outstanding
Pfandbriefe with respect to principal and interest must also at all times be ensured on the basis of the
present value (Barwert). Finally, the present value of the assets contained in the Cover Pool must
exceed the total amount of liabilities from the corresponding Pfandbriefe and derivatives by at least 2
per cent. (sichernde Überdeckung).

Such 2 per cent. excess cover must consist of highly liquid assets. Qualifying assets for the excess
cover are (i) debt securities of the Federal Republic of Germany, a special fund of the Federal
Republic of Germany, a German state, the European Communities, the member states of the European
Union, the states comprising the European Economic Area, the European Investment Bank, the IBRD-
World Bank, the Council of Europe Development Bank, or the European Bank for Reconstruction and
Development, as well as under certain circumstances debt securities of Switzerland, the United States
of America, Canada or Japan, if such countries satisfy certain requirements under directive
2006/48/EC; (ii) debt securities guaranteed by any of the foregoing entities; and (iii) credit balances
maintained with the European Central Bank, the central banks of the member states of the European
Union or appropriate credit institutions which have their corporate seat in a country listed under (i)
above if certain requirements under directive 2006/48/EC are met. In addition, to safeguard liquidity, a
certain liquidity cushion must be established.

The Pfandbrief Bank must record in the register of cover assets for any Cover Pool of a given
Pfandbrief type each asset and the liabilities arising from derivatives. Derivatives may be entered in
such register only with the consent of the trustee and the counterparty.

The Pfandbrief Bank must have an appropriate risk management system meeting the requirements
specified in detail in the Pfandbrief Act and must comply with comprehensive disclosure requirements
on a quarterly and annual basis set out in detail in the Pfandbrief Act.

Cover Pool for Mortgage Pfandbriefe

The principal assets qualifying for the Cover Pool for Mortgage Pfandbriefe are loans secured by
mortgages which may serve as cover up to the initial 60 per cent. of the value of the property, as
assessed by experts of the Pfandbrief Bank not taking part in the credit decision in accordance with
comprehensive evaluation rules designed to arrive at the fair market value of the property. Moreover,
the mortgaged property must be adequately insured against relevant risks.

The underlying property must be situated in a state of the European Economic Area, Switzerland, the
United States of America, Canada or Japan. Furthermore, the registered cover pool assets include all
claims of the Pfandbrief Bank directed to the economic substance of the property.

Other assets qualifying for inclusion in the cover pool for Mortgage Pfandbriefe include, among
others:

(i) equalisation claims converted into bonds,

(ii) subject to certain qualifications, those assets which may also be included in the 2 per cent. excess
cover described above, up to a total sum of 10 per cent. of the aggregate principal amount of
outstanding Mortgage Pfandbriefe; (iii) the assets which may also be included in the Cover Pool for
Public Pfandbriefe referred to below, up to a total of 20 per cent. of the aggregate principal amount of
                                                 - 89 -


outstanding Mortgage Pfandbriefe, whereby the assets pursuant to (i) above will be deducted and (iv)
claims arising under interest rate and currency swaps as well as under other qualifying derivatives
contracted under standardised master agreements with certain qualifying counterparties, provided that
it is assured that the claims arising under such derivatives will not be prejudiced in the event of the
insolvency of the Pfandbrief Bank or any other Cover Pool maintained by it. The amount of the claims
of the Pfandbrief Bank arising under derivatives which are included in the Cover Pool measured
against the total amount of all assets forming part of the Cover Pool as well as the amount of the
liabilities of the Pfandbrief Bank arising from such derivatives measured against the aggregate
principal amount of the outstanding Mortgage Pfandbriefe plus the liabilities arising from derivatives
may in either case not exceed 12 per cent., calculated in each case on the basis of the net present
values.

Status and protection of the Pfandbrief Holders

The Holders of outstanding Pfandbriefe rank pari passu among themselves, and have preferential
claims with respect to the assets registered in the relevant cover register. With respect to other assets
of a Pfandbrief Bank, holders of Pfandbriefe rank pari passu with unsecured creditors of the
Pfandbrief Bank.

Insolvency proceedings

In the event of the institution of insolvency proceedings over the assets of the Pfandbrief Bank, any
Cover Pool maintained by it would not be part of the insolvency estate, and, therefore, such insolvency
would not automatically result in an insolvency of any Cover Pool. Only if at the same time or
thereafter the relevant Cover Pool were to become insolvent, separate insolvency proceedings would
be initiated over the assets of such Cover Pool by the BaFin. In this case, Holders of Pfandbriefe
would have the first claim on the respective Cover Pool. Their preferential right would also extend to
interest on the Pfandbriefe accrued after the commencement of insolvency proceedings. Furthermore,
but only to the extent that Holders of Pfandbriefe suffer a loss, Holders would also have recourse to
any assets of the Pfandbrief Bank not included in the Cover Pools. As regards those assets, Holders of
the Pfandbriefe would rank equal with other unsecured and unsubordinated creditors of the Pfandbrief
Bank.

One or two administrators (Sachwalter, each an "Administrator") will be appointed in the case of the
insolvency of the Pfandbrief Bank to administer each Cover Pool for the sole benefit of the Holders of
related Pfandbriefe. The Administrator will be appointed by the court having jurisdiction at the
location of the head office of the Pfandbrief Bank at the request of the BaFin before or after the
institution of insolvency proceedings. The Administrator will be subject to the supervision of the court
and also of the BaFin with respect to the duties of the Pfandbrief Bank arising in connection with the
administration of the assets included in the relevant Cover Pool. The Administrator will be entitled to
dispose of the Cover Pool's assets and receive all payments on the relevant assets to ensure full
satisfaction of the claims of the Holders of Pfandbriefe. To the extent, however, that those assets are
obviously not necessary to satisfy such claims, the insolvency receiver of the Pfandbrief Bank is
entitled to demand the transfer of such assets to the Pfandbrief Bank’s insolvency estate.

Subject to the consent of the BaFin, the Administrator may transfer all or part of the cover assets and
the liabilities arising from the Pfandbriefe issued against such assets to another Pfandbrief Bank.

Jumbo-Pfandbriefe

Jumbo-Pfandbriefe are governed by the same laws as Pfandbriefe and therefore cannot be classified as
a type of securities apart from Pfandbriefe. However, in order to improve the liquidity of the
Pfandbrief market certain Pfandbrief Banks have agreed upon certain minimum requirements for
Jumbo-Pfandbriefe (Mindeststandards von Jumbo-Pfandbriefen) (the "Minimum Requirements")
applicable to such Pfandbriefe which are issued as Jumbo-Pfandbriefe. These Minimum Requirements
are not statutory provisions. Instead, they should be regarded as voluntary self-restrictions which limit
                                                  - 90 -


the options issuers have when structuring Pfandbriefe. An incomplete overview of the Minimum
Requirements is set out below:

(a)   The minimum issue size of a Jumbo-Pfandbrief is EUR 1,000,000,000. If the minimum size is
      not reached with the initial issue, a Pfandbrief may be increased by way of a tap issue in order to
      give it Jumbo-Pfandbrief status, provided all the requirements stated under (b) to (g) are fulfilled.

(b)   Only Pfandbriefe of straight bond format (i.e. fixed coupon payable annually in arrear, bullet
      redemption) may be offered as Jumbo-Pfandbriefe.

(c)   Jumbo-Pfandbriefe must be listed on an organised market in a Member State of the European
      Union or in another contracting state of the agreement on the European Economic Area
      immediately after issue, although not later than 30 calendar days after the settlement date.

(d)   Jumbo-Pfandbriefe must be placed by a syndicate consisting of at least five banks (syndicate
      banks).

(e)   The syndicate banks act as market makers; in addition to their own system, they pledge to quote
      prices upon application and bid/ask (two-way) prices at the request of investors on an electronic
      trading platform and in telephone trading.

(f)   The syndicate banks pledge to report daily for each Jumbo-Pfandbrief outstanding (life to
      maturity from 24 months upwards) the spread versus asset swap. The average spreads, which are
      calculated for each Jumbo-Pfandbrief by following a defined procedure, are published on the
      website of the Verband Deutscher Pfandbriefbanken (www.pfandbrief.de).

(g)   A subsequent transfer to the name of an investor is not permitted (restriction on transferability).
      It is permitted to buy back securities for redemption purposes or in the context of monitoring the
      cover pool if the outstanding volume of the issue does not fall below EUR 1,000,000,000 at any
      time. The issuer must publicly announce any buyback, the planned volume thereof and the issue
      envisaged for repurchase at least 3 banking days in advance, and make sure that extensive
      transparency is given in the market. Once a buyback transaction has been carried out, it is not
      permitted to increase the issue in question for a period of one year.

(h)   If one of the requirements stated in the above provisions is not met, the issue will lose its Jumbo-
      Pfandbrief status. Jumbo-Pfandbriefe which were issued before 28 April 2004 and have a volume
      of less than EUR 1,000,000,000 retain status of a Jumbo-Pfandbrief notwithstanding (a) above,
      provided that the other requirements in the above provisions are fulfilled.

The Minimum Requirements are supplemented by additional recommendations (Empfehlungen -
"Recommendations") and a code of conduct applicable to issuers of Jumbo-Pfandbriefe
(Wohlverhaltensregeln für Emittenten - "Code of Conduct"). Neither the Recommendations nor the
Code of Conduct are statutory provisions.
                                                 - 91 -


                                                                        Part G of the Base Prospectus
                                                                                            Taxation

                                             TAXATION

Taxation in Germany

The following is a general discussion of certain German tax consequences of the acquisition, the
ownership and the sale, assignment or redemption of Pfandbriefe and the receipt of interest thereon.
This discussion does not purport to be a comprehensive description of all tax considerations which
may be relevant to a decision to purchase Pfandbriefe. In particular, this discussion does not consider
any specific facts or circumstances that may apply to a particular purchaser. This summary is based
on the laws of the Federal Republic of Germany currently in force and as applied on the date of this
Base Prospectus, which are subject to change, possibly with retroactive or retrospective effect.

PROSPECTIVE PURCHASERS OF PFANDBRIEFE ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND
SALE, ASSIGNMENT OR REDEMPTION OF PFANDBRIEFE AND THE RECEIPT OF INTEREST
THEREON, INCLUDING THE EFFECT OF ANY STATE OR LOCAL TAXES, UNDER THE TAX
LAWS APPLICABLE IN THE FEDERAL REPUBLIC OF GERMANY.


Tax Residents

Private Investors

Interest and Capital Gains

Interest payable on the Pfandbriefe to persons holding the Pfandbriefe as private assets ("Private
Investors") who are tax residents of Germany (i.e. persons whose residence or habitual abode is
located in Germany) qualifies as investment income (Einkünfte aus Kapitalvermögen) according to §
20 (1) of the German Income Tax Act (Einkommensteuergesetz) and is, in general, taxed at a separate
flat tax rate of 25% according to § 32d (1) German Income Tax Act (Abgeltungsteuer, in the following
also referred to as "Flat Tax"), plus 5.5% solidarity surcharge ("Solidarity Surcharge",
Solidaritätszuschlag) thereon and, if applicable, church tax. Capital gains from the sale, assignment or
redemption of the Pfandbriefe, including the original issue discount of the Pfandbriefe, if any, and
interest having accrued up to the disposition of the Pfandbriefe and credited separately ("Accrued
Interest", Stückzinsen), if any, also qualify – irrespective of any holding period – as investment
income pursuant to § 20 (2) German Income Tax Act and are also taxed at the Flat Tax rate plus 5.5%
Solidarity Surcharge thereon and, if applicable, church tax.

Capital gains are determined by taking the difference between the sale, assignment or redemption
price (after the deduction of expenses directly and factually related to the sale, assignment or
redemption) and the issue or acquisition price of the Pfandbriefe.

Expenses (other than such expenses directly and factually related to the sale, assignment or
redemption) related to interest payments or capital gains under the Pfandbriefe are – except for a
standard lump sum (Sparer-Pauschbetrag) of 801 Euro (1,602 Euro for married couples filing jointly)
– not deductible.

According to the Flat Tax regime losses from the sale, assignment or redemption of the Pfandbriefe
can only be set-off against other investment income including capital gains. If the set-off is not
possible in the assessment period in which the losses have been realised, such losses can be carried
forward into future assessment periods only and can be set-off against investment income including
capital gains generated in these future assessment periods. Losses from so called private disposal
transactions (private Veräußerungsgeschäfte) according to § 23 of the German Income Tax Act as
                                                 - 92 -


applicable until 31 December 2008 can only be set-off against capital gains under the Flat Tax regime
until 31 December 2013 in the personal income tax return.

Withholding

If the Pfandbriefe are held in custody with or administrated by a German credit institution, financial
services institution (including a German permanent establishment of such foreign institution),
securities trading company or securities trading bank ("Disbursing Agent"), the Flat Tax at a rate of
25% (plus 5.5% Solidarity Surcharge thereon and, if applicable, church tax) will be withheld by the
Disbursing Agent on interest payments and the excess of the proceeds from the sale, assignment or
redemption (after the deduction of expenses directly and factually related to the sale, assignment or
redemption) over the issue or acquisitions costs for the Pfandbriefe. The Disbursing Agent will
provide for the set-off of losses with investment income including capital gains from other securities.
If, in the absence of sufficient current investment income derived through the same Disbursing Agent,
a set-off is not possible, the holder of the Pfandbriefe may – instead of having a loss carried forward
into the following year – file an application with the Disbursing Agent until 15 December of the
current fiscal year for a certification of losses in order to set-off such losses with investment income
derived through other institutions in the holder’s personal income tax return. If custody has changed
since the acquisition and the acquisition data is not proved as required by § 43a (2) of the German
Income Tax Act or not relevant, the Flat Tax rate of 25% (plus 5.5% Solidarity Surcharge thereon and,
if applicable, church tax) will be imposed on an amount equal to 30% of the proceeds from the sale,
assignment or redemption of the Pfandbriefe. In the course of the tax withholding provided for by the
Disbursing Agent withholding tax levied on the basis of the EU Savings Tax Directive (for further
details see below "EU Savings Tax Directive") and foreign taxes may be credited in accordance with
the German Income Tax Act.

If the Pfandbriefe are not kept in a custodial account with a Disbursing Agent, the Flat Tax will apply
on interest paid by a Disbursing Agent upon presentation of a coupon (whether or not presented with
the Note to which it appertains) to a holder of such coupon (other than a non-German bank or financial
services institution) (Tafelgeschäft), if any. In this case proceeds from the sale, assignment or
redemption of the Pfandbriefe, if any, will also be subject to the withholding of Flat Tax.

In general, no Flat Tax will be levied if the holder of a Pfandbrief filed a withholding exemption
certificate (Freistellungsauftrag) with the Disbursing Agent (in the maximum amount of the standard
lump sum of 801 Euro (1,602 Euro for married couples filing jointly)) to the extent the income does
not exceed the maximum exemption amount shown on the withholding exemption certificate.
Similarly, no Flat Tax will be deducted if the holder of the Pfandbrief has submitted to the Disbursing
Agent a valid certificate of non-assessment (Nichtveranlagungsbescheinigung) issued by the
competent local tax office.

For Private Investors the withheld Flat Tax is, in general, definitive. Exceptions apply, if and to the
extent the actual investment income exceeds the amount which was determined as the basis for the
withholding of the Flat Tax by the Disbursing Agent. In such case, the exceeding amount of
investment income must be included in the Private Investor´s income tax return and will be subject to
the Flat Tax in the course of the assessment procedure. According to the decree of the German Federal
Ministry of Finance dated 22 December 2009 (IV C 1 – S 2252/08/10004), however, any exceeding
amount of not more than 500 Euro per assessment period will not be claimed on grounds of equity,
provided that no other reasons for an assessment according to § 32d (3) of the German Income Tax
Act exist. Further, Private Investors may request that their total investment income together with their
other income, be subject to taxation at their personal, progressive income tax rate rather than the Flat
Tax rate, if this results in a lower tax liability. In order to prove investment income and the withheld
Flat Tax thereon, the investor may request a respective certificate in officially required form from the
Disbursing Agent.

Investment income not subject to withholding tax (e.g. since there is no Disbursing Agent) must be
included into the personal income tax return and will be subject to the Flat Tax rate of 25% (plus 5.5%
                                                   - 93 -


Solidarity Surcharge thereon and, if applicable, church tax), unless the investor requests the
investment income to be subject to taxation at the lower personal, progressive income tax rate. In the
course of the assessment procedure withholding tax levied on the basis of the EU Savings Tax
Directive (for further details see below "EU Savings Tax Directive") and foreign taxes on investment
income may be credited in accordance with the German Income Tax Act.

Business Investors

Interest payable on the Pfandbriefe to persons holding the Pfandbriefe as business assets ("Business
Investors") who are tax residents of Germany (i.e. Business Investors whose residence, habitual
abode, statutory seat or place of effective management and control is located in Germany) and capital
gains from the sale, assignment or redemption of the Pfandbriefe, including any issue discount of the
Pfandbriefe and Accrued Interest, if any, are subject to income tax at the Business Investor’s personal,
progressive income tax rate (plus 5.5% Solidarity Surcharge thereon and, if applicable, church tax) or,
in case of corporate entities, to corporation tax at a uniform 15% tax rate (plus 5.5 % Solidarity
Surcharge thereon). Such interest payments and capital gains may also be subject to trade tax if the
Pfandbriefe form part of the property of a German trade or business. Losses from the sale, assignment
or redemption of the Pfandbriefe are in general recognised for tax purposes.

Withholding tax, if any, including Solidarity Surcharge thereon is credited as a prepayment against the
Business Investor’s personal, progressive or corporate income tax liability and the Solidarity
Surcharge in the course of the tax assessment procedure, i.e. the withholding tax is not definitive. Any
potential surplus will be refunded. However, in general and subject to further requirements no
withholding deduction will apply to the gains from the sale, assignment or redemption of the
Pfandbriefe if (i) the Pfandbriefe are held by a corporation, association or estate in terms of § 43 (2)
sentence 3 no. 1 of the German Income Tax Act or (ii) the proceeds from the Pfandbriefe qualify as
income of a domestic business and the investor notifies this to the Disbursing Agent by use of the
required official form according to § 43 (2) sentence 3 no. 2 of the German Income Tax Act
(Erklärung zur Freistellung vom Kapitalertragsteuerabzug).

Withholding tax levied on the basis of the EU Savings Tax Directive (for further details see below
"EU Savings Tax Directive") and foreign taxes may be credited in accordance with the German
Income Tax Act. Alternatively, such taxes may also be deducted from the tax base for German income
tax purposes.

Non-residents

Interest payable on the Pfandbriefe and capital gains, including any issue discount and Accrued
Interest, if any, are not subject to German taxation, unless (i) the Pfandbriefe form part of the business
property of a permanent establishment, including a permanent representative, or a fixed base
maintained in Germany by the holder of the Pfandbriefe or (ii) the interest income otherwise
constitutes German-source income or (iii) the Pfandbriefe are not kept in a custodial account with a
Disbursing Agent and interest or proceeds from the sale, assignment or redemption of the Pfandbriefe
are paid by a Disbursing Agent upon presentation of a coupon to a holder of such coupon (other than a
non-German bank or financial services institution) (Tafelgeschäft), if any. In the cases (i), (ii) and (iii)
a tax regime similar to that explained above under "Tax Residents" applies.

Non-residents of Germany are, subject to certain exceptions, exempt from German withholding tax
and the Solidarity Surcharge thereon, even if the Pfandbriefe are held in custody with a Disbursing
Agent. However, where the investment income is subject to German taxation as set forth in the
preceding paragraph and the Pfandbriefe are held in a custodial account with a Disbursing Agent,
withholding tax is levied as explained above under "Tax Residents".

The withholding tax may be refunded based upon German national tax law or an applicable tax treaty.
                                                  - 94 -


Inheritance and Gift Tax

No inheritance or gift taxes with respect to the Pfandbriefe will arise under the laws of Germany, if, in
the case of inheritance tax, neither the decedent nor the beneficiary, or, in the case of gift tax, neither
the donor nor the donee, is a resident of Germany and such Pfandbriefe are not attributable to a trade
or business for which a permanent establishment is maintained, or a permanent representative has been
appointed, in Germany. Exceptions from this rule apply to certain German expatriates.

Other Taxes

No stamp, issue, registration or similar taxes or duties will be payable in Germany in connection with
the issuance, delivery or execution of the Pfandbriefe. Currently, net assets tax is not levied in
Germany.

EU Savings Tax Directive

Germany has implemented the European directive on the taxation of savings income (EU Council
Directive 2003/48/EC, "EU Savings Tax Directive") into national legislation by means of an Interest
Information Regulation (Zinsinformationsverordnung, ZIV) in 2004. Starting on 1 July 2005, Germany
has therefore begun to communicate all payments of interest on the Pfandbriefe and similar income
with respect to Pfandbriefe to the beneficial owners Member State of residence if the Pfandbriefe have
been kept in a custodial account with a Disbursing Agent.

Under the EU Savings Tax Directive, each Member State of the European Union is required to provide
to the tax authorities of another Member State details of payments of interest or other similar income
within the meaning of the EU Savings Tax Directive paid by a person within its jurisdiction to, or
secured by such a person for, an individual beneficial owner resident in, or certain limited types of
entity established in, that other Member State. However, for a transitional period, Austria and
Luxembourg will (unless during such period they elect otherwise) instead operate a withholding
system in relation to such payments. Under such withholding system, the recipient of the interest
payment must be allowed to elect that certain provision of information procedures should be applied
instead of withholding. The current rate of withholding is 35% (with effect from 1 July 2011). The
transitional period is to terminate at the end of the first full fiscal year following agreement by certain
non-EU countries to exchange of information procedures relating to interest and other similar income.

A number of non-EU countries and certain dependent or associated territories of certain Member
States have adopted or agreed to adopt similar measures (either provision of information or transitional
withholding) in relation to payments made by a person within their respective jurisdictions to an
individual beneficial owner resident in, or certain limited types of entity established in, a Member
State. In addition, the Member States have entered into provision of information or transitional
withholding arrangements with certain of those countries and territories in relation to payments made
by a person in a Member State to an individual beneficial owner resident in, or certain limited types of
entity established in, one of those countries or territories.

A proposal for amendments to the EU Savings Tax Directive has been published, including a number
of suggested changes which, if implemented, would broaden the scope of the rules described above.
Investors who are in any doubt as to their position should consult their professional advisers.
                                                                   - 95 -


                                                                                                   Part H of the Base Prospectus
                                                                                                           Subscription and Sale

                                                 SUBSCRIPTION AND SALE

Subject to the terms and conditions contained in the programme agreement dated 14 May 2012 (the
"Programme Agreement") between ING-DiBa AG and Commerzbank Aktiengesellschaft, the
Pfandbriefe will be offered by the Issuer to the dealer(s) appointed from time to time in respect of one
or more Tranches (each a "Dealer" and, together, the "Dealers"). The Pfandbriefe may be sold by the
Issuer through the Dealers, acting as agents of the Issuer, or directly without any Dealer. The
Programme Agreement also provides for Pfandbriefe to be issued in Series of Pfandbriefe which are
severally and not jointly underwritten by two or more Dealers.

The Issuer has agreed to indemnify the Dealers against certain liabilities in connection with the offer
and sale of the Pfandbriefe. The Programme Agreement may be terminated by any party at any time
on giving not less than ten business days' notice.

United States of America

The Pfandbriefe have not been and will not be registered under the U.S. Securities Act of 1933 as
amended (the "Securities Act") and may not be offered or sold within the United States (as defined in
Rule 902 of Regulation S) or to, or for the account or benefit of, U.S. persons (as defined in Rule 902
of Regulation S) except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Each Dealer has represented and agreed that it has
offered and sold the Pfandbriefe of any Tranche, and will offer and sell the Pfandbriefe of any Tranche
(i) as part of its distribution at any time and (ii) otherwise until 40 days after completion of the
distribution of such Tranche as determined, and such completion is notified to each relevant Dealer, by
the Fiscal Agent or, in the case of a Syndicated Issue, the lead manager, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Dealer has represented and agreed
that neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage in
any directed selling efforts (as defined in Rule 902 of Regulation S) with respect to the Pfandbriefe,
and it and they have complied and will comply with the offering restrictions (as defined in Rule 902 of
Regulation S) requirement of Regulation S. Each Dealer has agreed to notify the Fiscal Agent or, in
the case of a Syndicated Issue, the lead manager when it has completed the distribution of its portion
of the Pfandbriefe of any Tranche so that the Fiscal Agent or, in the case of a Syndicated Issue, the
lead manager may determine the completion of the distribution of all Pfandbriefe of that Tranche and
notify the other Relevant Dealers (if any) of the end of the distribution compliance period (as defined
in Rule 902 of Regulation S). Each Dealer agrees that, at or prior to confirmation of sale of
Pfandbriefe, it will have sent to each distributor (as defined in Rule 902 of Regulation S), dealer or
person receiving a selling concession, fee or other remuneration that purchases Pfandbriefe from it
during the distribution compliance period a confirmation or notice to substantially the following
effect:

"The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act") and may not be offered and sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until
40 days after completion of the distribution of this tranche of Securities as determined, and notified to
[Relevant Dealer], by the [Fiscal Agent/Lead Manager]. Terms used above have the meanings given to
them by Regulation S under the Securities Act."17

Each Dealer has represented and agreed that it has not entered and will not enter into any contractual
arrangement with respect to the distribution or delivery of Pfandbriefe within the United States of
America, except with its affiliates or with the prior written consent of the Issuer.
17
     The square brackets do not represent alternatives to be applied by the Issuer in specific issuances, rather they are included to indicate
     places in which the relevant Dealer is to fill in the appropriate names in any such legend provided to any distributor as required by
     Regulation S.
                                                    - 96 -



Pfandbriefe in bearer form are subject to U.S. tax law requirements and may not be offered, sold or
delivered within the United States or its possessions or to a United States person, except in certain
transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given
to them by the U.S. Internal Revenue Code and regulations thereunder.

Pfandbriefe, other than Pfandbriefe with an initial maturity of one year or less, will be issued in
accordance with the provisions of U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D)
(the "D Rules"), or in accordance with the provisions of U.S. Treasury Regulation Section 1.163-5 (c)
(2) (i) (C) (the "C Rules"), as specified in the Final Terms.

In addition, in respect of Pfandbriefe issued in accordance with the D Rules, each Dealer has
represented and agreed that:

(i)     except to the extent permitted under U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D),
        (i) it has not offered or sold, and during the restricted period will not offer or sell, Pfandbriefe
        in bearer form to a person who is within the United States or its possessions or to a United
        States person, and (ii) such Dealer has not delivered and will not deliver within the United
        States or its possessions definitive Pfandbriefe in bearer form that are sold during the restricted
        period;

(ii)    it has and throughout the restricted period will have in effect procedures reasonably designed
        to ensure that its employees or agents who are directly engaged in selling Pfandbriefe in bearer
        form are aware that such Pfandbriefe may not be offered or sold during the restricted period to
        a person who is within the United States or its possessions or to a United States person, except
        as permitted by the D Rules;

(iii)   if such Dealer is a United States person, it has represented that it is acquiring the Pfandbriefe
        in bearer form for purposes of resale in connection with their original issuance and if such
        Dealer retains Pfandbriefe in bearer form for its own account, it will do so only in accordance
        with the requirements of U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D) (6); and

(iv)    with respect to each affiliate that acquires Pfandbriefe in bearer form from such Dealer for the
        purpose of offering or selling such Pfandbriefe during the restricted period, such Dealer either
        (a) has repeated and confirmed the representations and agreements contained in sub-clauses
        (i), (ii) and (iii) on such affiliate's behalf or (b) has agreed that it will obtain from such affiliate
        for the benefit of the Issuer the representations and agreements contained in sub-clauses (i),
        (ii) and (iii).

Terms used in the above paragraph have the meanings given to them by the U.S. Internal Revenue
Code and regulations thereunder, including the D Rules.

In addition, where the C Rules are specified in the relevant Final Terms as being applicable to any
Tranche of Pfandbriefe, Pfandbriefe in bearer form must be issued and delivered outside the United
States and its possessions in connection with their original issuance. Each Dealer has represented and
agreed that it has not offered, sold or delivered and will not offer, sell or deliver, directly or indirectly,
Pfandbriefe in bearer form within the United States or its possessions in connection with their original
issuance. Further, each Dealer has represented and agreed in connection with the original issuance of
Pfandbriefe in bearer form, that it has not communicated, and will not communicate, directly or
indirectly, with a prospective purchaser if either such Dealer or purchaser is within the United States
or its possessions and will not otherwise involve its U.S. office in the offer or sale of Pfandbriefe in
bearer form. Terms used in this paragraph have the meanings given to them by the U.S. Internal
Revenue Code and regulations thereunder, including the C Rules.

The Issuer may agree with one or more Dealers for such Dealers to arrange for the sale of Pfandbriefe
under procedures and restrictions designed to allow such sales to be exempt from the registration
                                                  - 97 -


requirements of the Securities Act.

Each Dealer has agreed that it will comply with all relevant laws, regulations and directives in each
jurisdiction in which it purchases, offers, sells or delivers Pfandbriefe or has in its possession or
distributes the Base Prospectus or any other offering material.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a "Relevant Member State"), each Dealer has represented and agreed,
and each further Dealer appointed under the Programme will be required to represent and agree, that
with effect from and including the date on which the Prospectus Directive is implemented in that
Relevant Member State (the Relevant Implementation Date) it has not made and will not make an
offer of Pfandbriefe which are the subject of the offering contemplated by this Base Prospectus as
completed by the final terms in relation thereto to the public in that Relevant Member State except that
it may, with effect from and including the Relevant Implementation Date, make an offer of such
Pfandbriefe to the public in that Relevant Member State:

(a)   if the final terms in relation to the Pfandbriefe specify that an offer of those Pfandbriefe may be
      made other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member
      State (a "Non-exempt Offer"), following the date of publication of a prospectus in relation to
      such Pfandbriefe which has been approved by the competent authority in that Relevant Member
      State or, where appropriate, approved in another Relevant Member State and notified to the
      competent authority in that Relevant Member State, provided that any such prospectus has
      subsequently been completed by the final terms contemplating such Non-exempt Offer, in
      accordance with the Prospectus Directive, in the period beginning and ending on the dates
      specified in such prospectus or final terms, as applicable, and the Issuer has consented in
      writing to its use for the purpose of that Non-exempt Offer;

(b)   at any time to any legal entity which is a qualified investor as defined in the Prospectus
      Directive;

(c)   at any time to fewer than 100 or, if the Relevant Member State has implemented the relevant
      provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than
      qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent
      of the relevant Dealer or Dealers nominated by the Issuer for any such offer; or

(d)   at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Pfandbriefe referred to in (b) to (d) above shall require the Issuer or any
Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a
prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer of Pfandbriefe to the public" in relation
to any Pfandbriefe in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and the Pfandbriefe to be offered so as to
enable an investor to decide to purchase or subscribe the Pfandbriefe, as the same may be varied in
that Member State by any measure implementing the Prospectus Directive in that Member State, the
expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including
the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and
includes any relevant implementing measure in the Relevant Member State and the expression
"2010 PD Amending Directive" means Directive 2010/73/EU.

United Kingdom

Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will
                                                  - 98 -


be required to represent and agree, that:

(a) in relation to any Pfandbriefe which have a maturity of less than one year, (i) it is a person whose
    ordinary activities involve it in acquiring, holding, managing or disposing of investments (as
    principal or agent) for the purposes of its business and (ii) it has not offered or sold and will not
    offer or sell any Pfandbriefe other than to persons whose ordinary activities involve them in
    acquiring, holding, managing or disposing of investments (as principal or as agent) for the
    purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose
    of investments (as principal or agent) for the purposes of their businesses where the issue of the
    Pfandbriefe would otherwise constitute a contravention of Sec. 19 of the Financial Services and
    Markets Act 2000, as amended (the "FSMA")) by the Issuer;

(b) it has only communicated or caused to be communicated and will only communicate or cause to be
    communicated an invitation or inducement to engage in investment activity (within the meaning of
    Sec. 21 of the FSMA received by it in connection with the issue or sale of any Pfandbriefe in
    circumstances in which Sec. 21(1) of the FSMA does not apply to the Issuer; and

(c) it has complied and will comply with all applicable provisions of the FSMA with respect to
    anything done by it in relation to any Pfandbriefe in, from or otherwise involving the United
    Kingdom.

Republic of Italy

The offering of the Pfandbriefe has not been registered pursuant to Italian securities legislation and,
accordingly, no Pfandbriefe may be offered, sold or delivered, nor may copies of the Base Prospectus
or of any other document relating to the Pfandbriefe be distributed in the Republic of Italy, except:

(a)   to "qualified investors" ('investitori qualificati') according to Article 100 of Legislative Decree
      No. 58 of 24 February 1998, as amended, (the "Italian Financial Services Consolidation Act")
      and Article 34-ter, paragraph 1, letter (b) of CONSOB regulation No. 11971 of 14 May 1999 (the
      "Issuers Regulation"), as amended from time to time; or

(b)   that it may offer, sell or deliver the Pfandbriefe or distribute copies of any prospectus relating to
      such Pfandbriefe in an offer to the public in the period commencing on the date of publication of
      such prospectus, provided that such prospectus has been approved in another Relevant Member
      State and notified to CONSOB, all in accordance with the Prospectus Directive, as implemented
      in Italy under the Italian Financial Services Consolidation Act and the Issuers Regulation, and
      ending on the date which is 12 months after the date of publication of such prospectus; or

(c)   in any other circumstances where an express exemption from compliance with the public
      offering restrictions applies, as provided under the Italian Financial Services Act, or the Issuers
      Regulation, as amended from time to time.

Furthermore and subject to the foregoing, each Dealer has represented and agreed, and each further
Dealer appointed under the Programme will be required to represent and agree that any such offer, sale
or delivery of the Pfandbriefe or any document relating to the Pfandbriefe in the Republic of Italy
must be made by:

(i)   investment firms, banks or financial intermediaries allowed to conduct such activities in Italy in
      accordance with Legislative Decree No. 385 of 1 September 1993, as amended (the "Italian
      Banking Act"), the Italian Financial Services Consolidation Act and Regulation No. 16190 of 29
      October 2007, (the "Intermediaries Regulation"), as amended, and any other applicable laws
      and regulations; and ;

(ii) to the extent applicable, in compliance with Article 129 of the Italian Banking Act, as amended,
     and the implementing guidelines of the Bank of Italy, as amended from time to time, pursuant to
                                                - 99 -


     which the Bank of Italy may request post-offering information on the issue or the offer of
     securities in the Republic of Italy; and

(iii) in compliance with securities, tax, exchange control and any other applicable laws and
      regulations and any other applicable notification requirement or limitation imposed, from time to
      time, inter alia, by CONSOB or the Bank of Italy.

Investors should also note that, in any subsequent distribution of the Pfandbriefe in the Republic of
Italy, Article 100-bis of the Italian Financial Services Consolidation Act may require compliance with
the public offer and prospectus requirement rules provided under the Italian Financial Services
Consolidation Act and Regulation No. 11971. Furthermore, where the Pfandbriefe are placed solely
with "qualified investors" and are then systematically resold on the secondary market at any time in
the 12 months following such placing, purchasers of Pfandbriefe who are acting outside of the course
of their business or profession may in certain circumstances be entitled to declare such purchase void
and to claim damages from any authorised person at whose premises the Pfandbriefe were purchased,
unless an exemption provided for under the Italian Financial Services Consolidation Act applies.
                                              - 100 -


                                                                      Part I of the Base Prospectus
                                                                          Description of the Issuer

                               DESCRIPTION OF THE ISSUER

1.   Information about the Issuer

General Information

ING-DiBa AG (the "Issuer" and, together with its consolidated subsidiaries, "ING-DiBa Group")
acts under its legal and commercial name "ING-DiBa AG". The Issuer's predecessor, the
"Bankhaus Lunk und Co. GmbH" was incorporated on 22 April 1955 and was granted the
permission to commence its business activities under the laws of the Federal Republic of
Germany in April 1955. On 31 August 1956, its legal name changed to "Kreditbank Hagen
GmbH". After the place of business was transfered from Hagen to Frankfurt, its corporate form
was changed to a stock corporation with the legal name "Bank für Sparanlagen und
Vermögensbildung Aktiengesellschaft" on 11 October 1965. It was registered in the commercial
register (Handelsregister) of the Frankfurt am Main local court on 21 October 1965 under
No. HRB 7727. It began as a specialist financial institution to invest employer contributions to
employees' tax-deductible savings schemes. Four years later, it began offering mortgage
financing.

On 20 September 1976, Bank für Sparanlagen und Vermögensbildung Aktiengesellschaft changed
its legal name to "BSV Bank für Sparanlagen und Vermögensbildung".

On 14 May 1993, the legal name was changed to "Deutsche Direktbank Aktiengesellschaft" and
thereafter to "Allgemeine Deutsche Direktbank Aktiengesellschaft". Until 1998, the share capital
was fully owned by a union-owned company called BGAG Beteiligungsgesellschaft der
Gewerkschaften AG (Frankfurt). In the same year, the ING Group bought a 49 per cent. stake in
the Issuer; it acquired full ownership in 2003. Since 1 July 2005, the Issuer has been operating in
the market under the name "ING-DiBa AG".

On 31 August 2011, the Issuer took over the German commercial banking business of ING Bank
N.V. by legally integrating the German branch of ING Bank N.V. (ING Bank N.V., Frankfurt
Branch) into ING-DiBa AG.

The Issuer is incorporated as a stock corporation (Aktiengesellschaft) under the laws of the
Federal Republic of Germany.

The head office is located at Theodor-Heuss-Allee 106, 60486 Frankfurt am Main, Germany. Its
telephone number is +49 69 27 222 0.

Employees

As at 31 December 2011, ING-DiBa AG had 2,986 employees (including trainees).

2.   Overview on principal business activities

The Issuer is a universal bank with a direct bank model for its retail bank part. It offers private
customers a wide range of products and services of a retail bank. Furthermore, the Issuer provides
commercial customers with core banking services such as inter alia lending, payments and cash
management solutions and treasury services.

However, the Issuer does not have physical branches. Instead, the products are distributed to
customers primarily through direct channels, i.e. through online or telephone services or by mail,
including electronic mail, or fax. The exception is residential mortgage lending, for which the
                                             - 101 -


Issuer also cooperates with carefully chosen mortgage brokers and commercial banking where
relationship managers individually attend to the Issuer’s commercial customers’ needs. The
products offered by the Issuer to retail customers range from payment and savings accounts,
investment funds and securities brokerage to various types of private consumer loans and
residential mortgage financing and products offered to commercial customers range from
payments and cash management solutions, advice on mergers and acquisitions to structured
finance and syndicated loans.

The Issuer divides its business activity into the three segments retail customer assets (Retail-
Kundenvermögen), retail customer loans (Retail-Kundenkredite) and commercial banking,
subdivided into the core products as described below.

a.     Retail customer assets (Retail-Kundenvermögen)

The segment retail customer assets includes all investment products offered by the Issuer:
savings deposits, securities business and current accounts.

As at 31 December 2011, total customer deposits (including savings accounts, current accounts
and term deposits) amounted to EUR 87.5 billion.

Savings deposits (Spargelder)

The Issuer offers its customers standard savings products and special savings products with built-
in tiered interest rates (Zinswachstums-Konto) as well as savings bonds and savings schemes
within the scope of capital contribution benefits (vermögenswirksame Leistungen). It also offers
fixed-term deposits with various terms.

As at 31 December 2011, the Issuer held a total of around 7.3 million savings accounts (including
current accounts) for its customers (as at 31 December 2010: around 6.8 million) with a total
portfolio volume (retail volume including current accounts) for savings deposits in the area of
retail customer business amounting to EUR 87.5 billion (as at 31 December 2010: EUR 81.7
billion).

Current accounts (Girokonten)

The Issuer offers current accounts with the possibility to withdraw cash at no cost from any
automated teller machine (ATM) within the Eurozone with a Visa debit card.

As at 31 December 2011, the Issuer managed approximately 858,000 current accounts (as at 31
December 2010: approximately 730,000).

Securities business (Wertpapiergeschäft)

The Issuer offers customers securities accounts with low transaction costs. The assets deposited
with the securities accounts include securities, shares in investment funds and exchange traded
funds (ETF), the volume of the latter having particularly increased in 2011.

As at 31 December 2011, the number of securities accounts managed by the Issuer amounted to
approximately 874,000 (as at 31 December 2010: approximately 833,000). The total volume of
deposits in the securities accounts (Depotvolumen) stood at EUR 16.0 billion as at 31 December
2011 (as at 31 December 2010: EUR 17.4 billion). As at 31 December 2011, EUR 5.7 billion
thereof were related to funds (as at 31 December 2010: EUR 6.4 billion).

b.     Retail customer loans (Retail-Kundenkredite)

The segment retail customer loans covers all lending products offered by the Issuer: (i) mortgage
                                               - 102 -


loans; and (ii) consumer loans.

Mortgage loans (Baufinanzierung)

The Issuer offers initial financing and follow-up financing for retail property owners with up to
fifteen years terms as well as financing models in connection with programmes offered by KfW
(Kreditanstalt für Wiederaufbau). In addition to this, it offers forward loans with a lead time of up
to three years by means of which a present interest level may be used for a later follow-up
financing. The Issuer finances predominantly owner-occupied properties. Loans for properties that
are intended as a capital investment are only granted in exceptional cases and under very specific
conditions. The residential mortgage loan business takes place through direct channels; in addition
the Issuer works with carefully chosen brokers.

As at 31 December 2011, new business accounted for EUR 8.4 billion (as at 31 December 2010:
EUR 8.0 billion). Hence, the volume of outstanding mortgage loans resulted in EUR 56.5 billion
as at 31 December 2011, compared to EUR 51.5 billion as at 31 December 2010, an increase of 10
per cent.

Consumer loans (Verbraucherkredite)

The Issuer is able to cover the entire segment of consumer loans by designing products which are
specifically tailor-made to costumers' needs. In addition to the traditional loans based on regular
instalments, the Issuer offers flexible lines of loans that can be drawn daily based on a pre-
approved limit. Special consumer loan offers for the acquisition of automobiles and the
acquisition or modification of privately owned homes round off the product range.

As at 31 December 2011, the volume of consumer loans amounted to EUR 3.1 billion (as at 31
December 2010: EUR 2.7 billion). As at 31 December 2011, the number of loan accounts held
with the Issuer amounted to 364,000 (as at 31 December 2010: 330,000).

c.      Commercial banking

The segment commercial banking combines the Issuer’s banking business with commercial
clients. Clients comprise German medium-to-large/large corporations and commercial enterprises
as well as other international customers of the ING Group that have a branch in Germany.

Apart from core banking services such as lending, the Issuer also offers inter alia short to long
term export financing. Furthermore, in the area of financial markets, the Issuer offers financial
products for hedging currency and interest rate risks as well as payment and cash management
solutions and treasury services. As at 31 December 2011, the loans and advances to customers of
the segment commercial banking amounted to EUR 1.6 billion.

3.   Organisational Structure

The subscribed capital of the Issuer is fully owned by ING Deutschland GmbH (Frankfurt am
Main). The Issuer is part of ING Direct N.V., the international direct banking group of the
Netherlands-based ING Groep N.V. (together with its consolidated subsidiaries, "ING Group"),
and a wholly owned subsidiary of ING Bank N.V. The following chart shows the Issuer's position
within the group and its subsidiaries (with 100% per cent. ownership) and branches ING Bank,
eine Niederlassung der ING-DiBa AG and ING-DiBa Direktbank Austria as of the date of the
Base Prospectus.
                                              - 103 -




In accordance with § 17 para. 2 of the German Stock Corporation Act (Aktiengesetz), it is
assumed that a majority owned enterprise is dependent on the company holding the majority
interest and the majority in voting rights.

4.   Trend Information

There has been no material adverse change in the prospects of the Issuer since the date of its last
published audited consolidated financial statements as at 31 December 2011.

5.   Administrative, Management and Supervisory Body

The corporate bodies of the Issuer are:

(i) the "Executive Board" (Vorstand); and

(ii) the "Supervisory Board" (Aufsichtsrat); and

(iii) the "General Meeting of Shareholders" (Hauptversammlung).
                                             - 104 -


The Executive Board

In accordance with the Articles of Association (Satzung), the Executive Board consists of two or
more members. The Supervisory Board determines the number of the members of the Executive
Board and can appoint the chairman of the board (Vorsitzender des Vorstands).

As at the date of this Base Prospectus, members of the Executive Board are:

Name and Position         Functions                         Other Mandates
Roland Boekhout           Corporate communications,         Member of the supervisory board
(chairman of the          treasury operations, human        of ING Bank Slaski S.A.,
Executive Board)          resources, audit services,        Managing director of ING
                          quality management, legal         Holding Deutschland GmbH;
                                                            managing director of ING
                                                            Deutschland GmbH; managing
                                                            director of ING Direct N.V.
Bas Brouwers              Treasury, accounting,             Managing director of ING
                          controlling, purchasing           Deutschland GmbH; managing
                          department                        director of ING Holding
                                                            Deutschland GmbH

Bernd Geilen              Consumer loans, risk              Managing director of ING
                          management, market risk           Holding Deutschland GmbH
                          management, compliance and
                          anti-money laundering

Katharina Herrmann        General marketing, call centre,   none
                          marketing of mortgage
                          financing, product and target
                          group management

Martin Krebs              Securities brokerage, ING-        Member of the supervisory Board
                          DiBa Direktbank Austria, ING      of Degussa Bank GmbH; advisor
                          Bank Commercial Banking           of the Bundesbank,
                                                            Hauptverwaltung Hessen

Herbert Willius           Customer service centre,          Advisor of Schufa Holding AG;
                          mortgage financing, IT, project   member of the management board
                          management, facility              of VISA Deutschland
                          management, logistics

The business address of the members of the Executive Board is Theodor-Heuss-Allee 106, 60486
Frankfurt am Main, Germany.

The Supervisory Board

In accordance with the Articles of Association, the Supervisory Board consists of twelve
members. As at the date of this Base Prospectus, members of the Supervisory Board are:
                                                              - 105 -



Name and Position                                         Other Mandates

Simonis Maria Hubertus ("Ben")                            none
Tellings
(chairman of the Supervisory Board)

Professor Dr. Wolfgang Gerke                            Member of the supervisory board of Credit Suisse
                                                        Asset Management KAG; member of the
                                                        supervisory board of Nürnberger Pensionskasse AG;
                                                        member of the supervisory board of Nürnberger
                                                        Pensionsfonds AG; member of the supervisory
                                                        board of Société Générale SGSS KAG, member of
                                                        the supervisory board of St. Galler Kantonalbank
                                                        Deutschland AG

Dick Herman Harryvan                                    Member of the supervisory board of ING Bank of
                                                        Canada Ltd Toronto, Canada

Dr. Claus Dieter Hoffmann                                 Chairman of the supervisory board of EnBW;
                                                          member of the advisory board of Ejot GmbH &
                                                          Co. KG; member of the advisory board of Leuze
                                                          GmbH & Co. KG; member of the supervisory
                                                          board of De Boer BV

Cornelis Petrus Adrianus Joseph ("Eli")                   Managing Director of ING Direct N.V.; member of
Leenaars                                                  the executive board of ING Bank N.V.; member of
                                                          the executive board of ING Support Holding B.V.;
                                                          member of the board of directors of Capital One
                                                          Financial Corporation

Hermann Zeilinger                                         none

Birgit Braitsch *)                                        Representative of German trade union ver.di

Rüdiger Köppel*)                                          none
Alexander Klein *)                                        Representative of German trade union ver.di

Rainer Pfeifer *)                                         none

Christine Stürtz-Deligiannis *)                           none

Christopher Walker *)                                     none

*)
     Employee representatives according to the Co-Determination Act (Mitbestimmungsgesetz).


The business address of the members of the Supervisory Board is Theodor-Heuss-Allee 106,
60486 Frankfurt am Main, Germany.

General Meeting of Shareholders

The General Meeting of Shareholders, which is called by the Executive Board or by the
Supervisory Board, as the case may be, is held at the head office of the Issuer. An ordinary
shareholder meeting takes place within the first eight months of every financial year of the Issuer.
The voting right of each individual share gives entitlement to one vote.
                                               - 106 -


Potential Conflicts of Interest

The members of the Executive Board and the Supervisory Board have additional positions as
described above which may result in potential conflicts of interest between their duties towards
the Issuer and their private interests and other duties, in particular insofar as some of the members
of the Executive Board and the Supervisory Board have additional functions within ING Group.
As at the date of this Base Prospectus, there are no conflicts of interest in connection with
the issue of Pfandbriefe under the Programme.

6.   Statutory Auditors

For the financial years ended 31 December 2010 and 31 December 2011, the statutory auditor of
the Issuer was Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart, office
Eschborn/Frankfurt am Main, Mergenthalerallee 3-5, 65760 Eschborn, Germany ("Ernst &
Young"). Ernst & Young is a member of the German chamber of public accountants
(Wirtschaftsprüferkammer), Berlin.

7.   Major Shareholders

As of the date of this Base Prospectus, the subscribed capital of the Issuer is EUR 100,000,000
divided into 100,000,000 shares. The share capital of the Issuer is fully owned by ING
Deutschland GmbH (Frankfurt am Main) (for more information see also "3. Organisational
Structure" above).

8.   Financial information

Historical Financial Information

For the financial year ended 31 December 2011, the Issuer's consolidated financial statements,
including the Consolidated Statement of Financial Position, the Consolidated Income Statement,
the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flows, the Notes to the IFRS Consolidated Financial
Statements, and the respective Auditors’ Report (together with the respective Group Management
Report, the "Consolidated Financial Information 2011") are set out in Annex A to the Base
Prospectus (pages F-1 to F-153).

For the financial year ended 31 December 2010, the Issuer's consolidated financial statements,
including the Consolidated Statement of Financial Position, the Consolidated Income Statement,
the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flows, the Notes to the IFRS Consolidated Financial
Statements, and the respective Auditors’ Report (together with the respective Group Management
Report, the "Consolidated Financial Information 2010") are incorporated by reference into this
Base Prospectus as set out in the table under "Documents incorporated by reference" within the
section "General Information" below.

For the financial year ended 31 December 2011, the Issuer's unconsolidated financial statements,
including the Annual Balance Sheet, the Income Statement, the Notes to the Financial Statements,
and the respective Auditors’ Report (the "Unconsolidated Financial Information 2011") are set
out in Annex B to the Base Prospectus (pages G-1 to G-36).

The consolidated financial statements for the financial years ended 31 December 2010 and 31
December 2011 have been prepared on the basis of International Financial Reporting Standards,
as adopted by the European Union, ("IFRS") and the additional requirements of German
commercial law pursuant to § 315a (1) of the German Commercial Code (Handelsgesetzbuch).

The unconsolidated financial statements for the financial year ended 31 December 2011 have been
                                             - 107 -


prepared on the basis of the principles pursuant to the German Commercial Code
(Handelsgesetzbuch), the Order on the Accounting of Credit Institutions and Financial Services
Institutions (RechKredV) (Verordnung über die Rechnungslegung der Kreditinstitute und
Finanzdienstleistungsinstitute), the Pfandbriefgesetz and the Aktiengesetz.

Auditing of Historical Financial Information

The statutory auditors of the Issuer have audited the consolidated financial statements as well as
the respective group management report for the financial year ended 31 December 2011, the
consolidated financial statements as well as the respective group management report for the
financial year ended 31 December 2010 and the unconsolidated financial statements for the
financial year ended 31 December 2011 in accordance with § 317 of the German Commercial
Code (Handelsgesetzbuch) and German generally accepted standards of the audit of financial
statements promulgated by the Institute of Public Auditors in Germany (Institut der
Wirtschaftsprüfer in Deutschland e.V. – IDW) and have issued an unqualified auditors' report
(uneingeschränkter Bestätigungsvermerk) in each case.

Legal and Arbitration Proceedings

The Issuer is not involved in any governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which the Issuer is aware), during a period
covering at least the previous 12 months which may have or have had in the recent past,
significant effects on the Issuer's and/or ING-DiBa Group's financial position or profitability.

Significant Change in the Issuer’s Financial or Trading Position

There has been no significant change in ING-DiBa Group’s financial or trading position since the
date of the last published consolidated financial statements of ING-DiBa Group as at
31 December 2011.
                                                 - 108 -


                                                                           Part J of the Base Prospectus
                                                                                    General Information

                                    GENERAL INFORMATION


General

The Issuer may issue Pfandbriefe under the Programme from time to time. The maximum aggregate
principal amount of Pfandbriefe which may be offered under the Programme is Euro 10,000,000,000,
provided that the Issuer may, subject to compliance with the relevant provisions of the Programme
Agreement, increase or decrease such amount by appropriate action in which case a new Base
Prospectus relating to the Programme will be filed for approval with the relevant competent authority.

Use of Proceeds

The net proceeds of the issue of each Tranche of Pfandbriefe will be applied by the Issuer to meet part
of its general financing requirements or, in relation to a Tranche of Pfandbriefe, to such specific
purpose as set out in the relevant Final Terms.

Authorisation

The update of the Programme and the issue of Pfandbriefe under the updated Programme were duly
authorised by the Issuer by resolution of the Executive Board of the Issuer dated 11 March 2012.

Listing and Trading

Application has been made to admit the Pfandbriefe to be issued under the Programme on the
regulated market (regulierter Markt) of the Frankfurt Stock Exchange. Pfandbriefe may, however, be
admitted to trading and listed on such other or further stock exchange(s), or not be listed on any stock
exchange, as specified in the applicable Final Terms.

Ratings

As at the date of this Base Prospectus, the following ratings have been assigned:

Moody’s Investors Service Ltd. ("Moody’s" or the "Rating Agency")

    Mortgage Pfandbriefe issued by the Issuer                        (P)Aaa

    Financial Strength Rating of the Issuer                          C+

    Long-Term Senior Unsecured Rating of the Issuer                  Aa3

    Short-Term Senior Unsecured Rating of the Issuer                 P-1

Moody’s is a credit rating agency established in the European Union and is registered under
Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009
on credit rating agencies as amended by Regulation (EU) No. 513/2011 (the "Regulation").

While the Moody’s rating for the Mortgage Pfandbriefe issued by the Issuer reflects the credit risk
associated with the securities themselves, based on a rating scale from "Aaa" (best rating) to "C"
(worst rating), the financial strength rating of the Issuer represents the Rating Agency’s opinion of the
Issuer’s intrinsic safety and soundness. Moody’s Financial Strength Ratings range from "A" to "E",
with "A" for banks with the greatest intrinsic financial strength and "E" for banks with the least
intrinsic financial strength. The Long-Term Senior Unsecured Rating, based on the same rating scale
                                                      - 109 -


 as the ratings for securities, reflects Moody’s opinion of the Issuer’s ability to honor long-term senior
 unsecured financial obligations and contracts. Moody’s Short-Term rating is the Rating Agency’s
 opinion of the Issuer’s ability to honor short-term financial obligations. Moody’s employs the
 designations "P-1" ("Prime-1") to "NP" ("Not Prime") to indicate the short-term repayment ability of
 rated issuers.

 Pfandbriefe issued under the Programme may be rated or unrated. The ratings above do not
 immediately apply to any individual Pfandbriefe issued under the Programme and no assurance can be
 given that the rating assigned to Pfandbriefe issued under the Programme will have the same rating as
 the rating assigned above. In case the Pfandbriefe are rated, such rating will be disclosed in the
 relevant Final Terms (see Part E.IV "II. Additional Disclosure Requirements – E. Additional
 Information - Rating").

 A security rating is not a recommendation to buy, sell or hold securities and may be subject to
 suspension, reduction or withdrawal at any time by the assigning rating agency. Ratings are based on
 current information furnished to the rating agencies by the Issuer and information obtained by the
 rating agencies from other sources. Because ratings may be changed, superseded or withdrawn as a
 result of changes in, or unavailability of, such information, a prospective purchaser should verify the
 current long-term and short-term ratings of the Issuer and/or of the Pfandbriefe, as the case may be,
 before purchasing the Pfandbriefe. Rating agencies may change their methodology at any time. A
 change in the rating methodology may have an impact on the rating of Pfandbriefe issued or to be
 issued under this Programme (see Part B.I "Risks relating to the Pfandbriefe - Rating of the
 Pfandbriefe").

 Documents available for Inspection

 For a period of which this Base Prospectus is valid, i.e. for a period of 12 months after its publication
 for offers to the public or admission to trading on a regulated market, copies of the following
 documents concerning the Issuer will be available for inspection, and copies thereof will be available
 free of charge upon oral or written request, during normal business hours at the principle office of the
 Issuer:

 (i)     the Articles of Association of the Issuer;

 (ii)    this Base Prospectus and any supplement thereto; and

 (iii)   the Consolidated Financial Information of the Issuer in accordance with IFRS for the financial
         year ended 31 December 2010, as incorporated by reference into this Prospectus, and the
         financial year ended 31 December 2011 and the Unconsolidated Financial Information of the
         Issuer in accordance with the German Commercial Code (HGB) for the financial year ended 31
         December 2011, each as set out in the relevant annex to this Prospectus.

 Documents incorporated by reference

 The following documents shall be deemed to be incorporated into, and to form part of, this Base
 Prospectus:

Document                                                        Page Reference           Incorporation on
                                                                                         page of the Base
                                                                                         Prospectus
A. Consolidated Financial Information of the
   Issuer in accordance with IFRS for the financial
   year ended 31 December 2010:

Group Management Report                                                     F-1 - F-56            Page 106
Consolidated Statement of Financial Position                                      F-57            Page 106
                                                 - 110 -


Consolidated Income Statement                                                 F-58               Page 106
Consolidated Statement of Comprehensive Income                                F-59               Page 106
Consolidated Statement of Changes in Equity                            F-60 – F-61               Page 106
Consolidated Statement of Cash Flows                                          F-62               Page 106
Notes to the Consolidated Financial Statements                        F-63 – F-148               Page 106
Auditors' Report                                                     F-149 – F-150               Page 106

B. Base Prospectus dated 31 May 2011 relating to
   the Euro 10,000,000,000 Programme for the
   Issuance of Pfandbriefe:

Terms and Conditions of the Pfandbriefe
Deutsche Fassung der Emissionsbedingungen für
Pfandbriefe                                                                 45 – 63               Page 74
Terms and Conditions of the Jumbo-Pfandbriefe
Deutsche Fassung der Emissionsbedingungen für
Jumbo-Pfandbriefe                                                           64 - 72               Page 74

 The documents set out in the table above were deposited with BaFin in connection with the approval
 of the base prospectus dated 31 May 2011 (the "2011 Base Prospectus") with regard to the
 Euro 10,000,000,000 Programme for the Issuance of Pfandbriefe. The 2011 Base Prospectus was
 approved by BaFin on 31 May 2011. The 2011 Base Prospectus is available for inspection, and copies
 thereof will be available free of charge upon oral or written request, during normal business hours at
 the principle office of the Issuer. Parts of the documents referred to under A. and B. above which are
 not explicitly listed in the table above are not incorporated by reference into this Base Prospectus and
 are either not relevant for the investor or are covered elsewhere in the Base Prospectus.
                                                 - 111 -


                                               ANNEX A

Consolidated Financial Information of the Issuer in accordance with IFRS for the financial year
                                  ended 31 December 2011
                      (English Translation from the German language)

Group Management Report                                                 F-3 to F-56

Consolidated Statement of Financial Position                            F-57

Consolidated Income Statement                                           F-58

Consolidated Statement of Comprehensive Income                          F-59

Consolidated Statement of Changes in Equity                             F-60 to F-61

Consolidated Statement of Cash Flows                                    F-62 to F-63

Notes to the Consolidated Financial Statements                          F-64 to F-150

Auditors' Report                                                        F-152 to F-153
                        F-1




Consolidated Financial Statements and
Group Management Report


prepared in accordance with IFRS as of
December 31, 2011




ING-DiBa AG, Frankfurt am Main
                                                                                                      F-2




Group Management Report ............................................................................................................................................................................3

    General Conditions .........................................................................................................................................................................................3

    Development of the Segments Retail Customer Assets, Retail Customer Loans, and
    Commercial Banking...................................................................................................................................................................................... 7

    Group Results of Operations................................................................................................................................................................... 11

    Assets, Liabilities and Financial Position .......................................................................................................................................... 12

    Events after the Reporting Date............................................................................................................................................................14

    Risk Report ........................................................................................................................................................................................................14

    Additional disclosures under IFRS 7 ....................................................................................................................................................47

    Internal control system for accounting............................................................................................................................................ 50

    Branches .............................................................................................................................................................................................................52

    Report on Opportunities and Expected Developments............................................................................................................55

Consolidated statement of financial position.....................................................................................................................................57

Consolidated income statement............................................................................................................................................................... 58

Consolidated statement of comprehensive income ...................................................................................................................... 59

Consolidated statement of changes in equity...................................................................................................................................60

Consolidated statement of cash flows................................................................................................................................................... 62

Notes to the IFRS consolidated financial statements ................................................................................................................... 64

    General information.................................................................................................................................................................................... 64

    Significant accounting policies.............................................................................................................................................................. 65

    Notes to the consolidated statement of financial position .................................................................................................. 92

    Other disclosures relating to the consolidated statement of financial position......................................................114

    Notes to the consolidated income statement ........................................................................................................................... 134

    Segment report............................................................................................................................................................................................ 144

    Notes to the consolidated cash flow statement ........................................................................................................................147

    Capital management ................................................................................................................................................................................149
                                                    F-3




Group Management Report




General Conditions


General economic conditions


Economic development in 2011 was characterized by remarkable ambivalence – particularly in Germany.
On the one hand, the economy proved to be extraordinarily robust. On the other, the European debt crisis
put a considerable strain on the markets.


According to current forecasts, gross domestic product (GDP) rose by more than 3 percent while the un-
employment rate was just over 5 percent at the end of the reporting period and thus approximately 50
percent lower than the euro zone as a whole. Thus, the economic momentum already recorded in the pre-
vious year in Germany continued, whereby Germany essentially assumed the role of Europe's economic
engine. Economists largely agree that Germany and France kept the euro zone from stagnating with their
above-average economic growth.


In addition, the encouraging aspects of economic development in the reporting period included the fact
that domestic demand and consumer spending increased significantly. Consequently, growth was no
longer carried primarily by German exports as in the previous year. Increasing income and decreasing un-
employment proved to be motors for consumer spending and diversified the positive economic trend.


The rate of inflation in the euro area, which at the beginning of 2011 was still well below the upper limit of
2 percent for stability defined by the European Central Bank (ECB), accelerated in the second half of the
year. At the end of the reporting period, the rate of inflation was 2.1 percent. The ECB reacted to this in-
crease in prices in April and June 2011 by twice raising the key interest rate by 25 basis points to 1.5 percent
(compared to 1 percent in the first quarter of 2011). Under its new president, Mario Draghi, the ECB low-
ered the key interest rate by 25 basis points to 1.25 percent at the beginning of November 2011, in order to
account for slowing economic prospects. In December, the key interest rate was once again lowered to 1.0
percent.


Economic development in neighboring Austria was equally dynamic. According to a forecast by the
Österreichische Nationalbank, the country's GDP should have grown by more than 3 percent and therefore
just as robustly as in Germany. In particular strong exports and substantial investments on the part of
companies contributed to this encouraging recovery, which ultimately had a positive impact on the labor
market. Austria recorded an absolute record high rate of employment already at the beginning of 2011. The
unemployment rate at the end of the reporting period was just over 4 percent.


This growth dynamic was overshadowed by the dramatically mounting European debt crisis. After 2010
was already characterized by impending sovereign defaults in Greece and Ireland, which led to the estab-
lishment of the European Financial Stability Facility (EFSF), Portugal also had to be bailed out in April 2011.
While the Situation in Greece continued to deteriorate with an open discussion of an orderly national
insolvency and possible withdrawal from the euro zone, the crisis spilled over to Italy and thus Europe's
third-largest economy. The development also created anxiety in Spain.
                                                   F-4




At the beginning of August 2011, the European Central Bank purchased Italian and Spanish government
bonds for the first time on the secondary market, in order to prevent a further rise in interest rates for the
distressed countries. In September, the German Bundestag approved the increase in the EFSF rescue fund
planned by the euro zone countries.


An agreement was reached to trim Greece's debt and expand the EFSF to one trillion euros at another
European crisis summit in Brussels at the end of October. The banks also stated their willingness to waive
approximately 50 percent of their receivables from Greece.


These agreements only temporarily calmed the markets. In November, yields on ten-year government
bonds from indebted euro zone countries rose sharply. Around 7.5 percent had to be paid temporarily for
10-year Italian government bonds. Even bonds from stabile euro zone countries such as Finland, Austria
and the Netherlands came under pressure at times.


Far-reaching savings packages were implemented in the highly indebted countries – in particular in Greece
and Italy – in order to gradually reduce the government deficit. Under the effect of the European debt
crisis, economists expect a slow-down in economic growth and possibly even a recession in some euro
zone countries.



Industry environment


The financial services industry had stabilized in 2010. The institutions were able to win back the trust of
their customers lost in the preceding financial crisis. Successful restructuring measures and sustained
robust growth in Germany had a positive effect on the industry. Overall, the financial center Germany pre-
sented itself in quite stable condition again in 2011.


However, starting in the summer of 2011, concerns grew in connection with the European debt crisis about
the financial distress of banks represented by subsidiaries in euro zone countries at risk of insolvency or
banks that hold a large volume of these countries' bonds. The new managing director of the International
Monetary Fund (IMF), Christine Lagarde, called for affected banks to be provided with new capital that
should come directly from the rescue fund EFSF. The problems of the Belgian-French financial service pro-
vider Dexia sparked fears of a new banking crisis. The breakup of this bank was announced later; further-
more, a total of EUR 95 billion in risky securities are to be transferred to a bad bank.


The heads of state and government of the European Union resolved at an EU summit meeting in Brussels
at the end of October 2011 to recapitalize the banks in connection with the trimming of Greek debt and
the write-off requirements as a consequence of the debt crisis. Thirteen German banks of systemic impor-
tance for the European Economic Area are being requested to present capital of the highest quality – a
core tier 1 capital ratio of nine percent -starting in mid-2012. Institutions that do not reach this percentage
are to avail themselves first and foremost of private sources of financing. If the corresponding institutions
cannot obtain these funds on the market, the relevant country of residence must come to their aid.


As previously mentioned, the trimming of Greek debt entails a significant waiver of debt on the part of
banks. German banks had already prepared for such a development and had already partially written off
their investments in Greek bonds. However, the debt haircut is hitting large French banks especially hard.


The future of German central savings banks (Landesbanken) was once again an import topic in 2011. In the
summer, the owners (Sparkasse savings banks and Federal State of North Rhine-Westphalia) resolved un-
der pressure from the EU to break up WestLB, which was once the most powerful bank under public law in
                                                   F-5




Germany. A planned merger with BayernLB had previously fallen through. In mid-November 2011, the rat-
ing agency Moody’s downgraded the rating of several central savings banks by two to three levels.


The preliminary final draft of the Basel III resolutions – the new regulatory framework to toughen capital
requirements in the financial industry – was published in December 2010. The new rules are to be imple-
mented step-by-step within the countries of the European Union starting in 2013. The new provisions with
respect to the protection of deposits across the EU have applied since the beginning of the reporting pe-
riod. Since then, the statutory limit for the compensation of losses for each customer is EUR 100,000.



            business
Overview of b usiness d evelopment

The overall encouraging economic development in Germany, regardless of the downturn as a result of the
European debt crisis, is also reflected in ING-DiBa's operating results, which enabled us to not only defend
our position as one of the largest savings banks in Germany, but to expand it once again.


In the fiscal year just ended, the Frankfurt branch office of ING Bank N.V., Amsterdam, was spun off to Coni-
fer B.V., Amsterdam, which was merged with ING-DiBa on August 31, 2011. The acquired commercial bank-
ing business is being operated in the newly established branch office of ING-DiBa under the name ING
Bank, Frankfurt, (hereinafter referred to as Commercial Banking or the ING Bank branch). The income
statement includes Commercial Banking's expenses and income recognized since August 31, 2011. The in-
ternational merger was executed at the IFRS carrying amounts of the transferring legal entity. The merger
was entered in the commercial register on August 31, 2011. The bank's organizational structure and risk
management system, spearheaded by ING-DiBa's business and overall risk strategy, was revised as part of
the integration. In addition to traditional corporate lending, including payment transactions, the range of
services offered by the Commercial Banking branch also includes export financing and specialized lending.
The goal is to establish another income pillar in addition to the retail business, with positive effects on the
Bank's stability and profitability.


ING-DiBa does not maintain any local branches. In addition to the corporate center and the newly estab-
lished ING Bank branch in Frankfurt, the financial institution is represented in Hanover, Nuremberg, and
Vienna.


The Bank is managed based on three segments: Retail Customer Assets, Retail Customer Loans, and Com-
mercial Banking. Retail Customer Assets includes the core products savings deposits, securities business
and current accounts. Retail Customer Loans includes mortgage loans and consumer loans.


Business relationships with large companies are managed in the Commercial Banking segment merged
with ING-DiBa in the reporting period. Pure corporate customer business is managed in this segment.


The institution mostly recorded significant rates of growth for all core products. We succeeded in once
again expanding the number of customers at a high level in the six-digit range. As of December 31, 2011,
around 7.4 million customers maintained a business relationship with ING-DiBa (2010: 7.1 million). Just
under 7.0 million of these customers can be attributed to Germany (previous year: 6.7 million) and 492
thousand to Austria (previous year: 471 thousand).


Business volume as of December 31, 2011, comprising the total assets of Retail Customer Assets plus the
securities account volume of the investment services business, Retail Customer Loans, and Commercial
Banking, increased by around 11 percent year-on-year. It increased as of December 31, 2011 to EUR
170.0 billion compared to EUR 153.6 billion in the previous year. Detailed information can be found in the
notes regarding the development of the Retail Customer Assets, Retail Customer Loans, and Commercial
Banking segments.
                                                    F-6




Net interest income in the 2011 fiscal year was EUR 1,326 million (previous year: EUR 1,128 million) and net
commission income was EUR 41 million (previous year: EUR 43 million). The record income from ordinary
operating activities of EUR 494 million generated in the 2010 fiscal year was once again expanded in 2011
with a double-digit rate of growth. ING-DiBa earned a new record pre-tax income of EUR 660 million in
fiscal year 2011.


ING-DiBa's total assets increased from EUR 96.3 billion in 2010 to EUR 109.5 billion in 2011. Equity
amounted to EUR 5.5 billion compared with EUR 4.8 billion in the previous year.


In light of these figures, fiscal year 2011 can once again be regarded as very positive from the Bank's per-
spective. At a time in which many financial institutions have to fight for their customers' trust or win it
back, several hundred thousand customers have once again opted for a business relationship with ING-
DiBa. In particular the long-term product and service philosophy have stood the test of time against the
background of the euro and debt crises. The customers place increasing value on transparent products and
processes that they can understand, as well as on high quality at fair prices.


ING-DiBa consistently applied its strategy of offering an alternative to commission and fee-based consult-
ing with its business model in the reporting period. The Bank has supported the do-it-yourself consulting
of customers in many ways for years. An important milestone in this context was the introduction of the
completely product-neutral financial portal "finanzversteher.de" in September 2010. At this website, users
can find brief, understandable information on important issues surrounding the topics of investment and
retirement savings. In addition, the website provides checklists and a variety of selection and analysis pro-
grams to assist in the decision-making process. ING-DiBa operates this portal because it believes that no
financial institution benefits more from Germans' growing understanding of financial matters than a bank
with simple products. In January 2011, "finanzversteher.de" was enhanced by the function "Preisradar" (price
radar) for automated teller machines. Since then, bank customers have been able to enter information
online regarding the fees charged by third-party banks for cash withdrawals all over Germany using this
function. This price radar creates transparency and has already been heavily used in the months after its
introduction.


Another example of fairness practiced by the Bank in dealing with its customers is the "ING-DiBa Promise"
issued in the reporting period. The Bank assures every customer he or she will be exempt from liability if
third parties abuse his or her access data for Internet banking. The requirement is that the customer noti-
fies the Bank immediately.


The Bank received numerous awards again in 2011. For instance, ING-DiBa won the "Online broker of the
year" competition organized by "Börse Online" magazine for the seventh time and was once again chosen as
Germany's "favorite bank" by the magazine "Euro". In November 2011, the Bank received the "Diversity Prize"
for its "Azubis 50+" program offering individuals over 50 prospects for a new career.


ING-DiBa's business strategy has proven itself in previous years under all kinds of market conditions. It is
based essentially on three pillars:


ING-            bank
ING - DiBa is a b ank without local branch offices. Customers are offered a 24-hour service via telephone
or the Internet. This business model ensures overall lower costs. ING- DiBa passes this advantage – which
also contributes to the Bank's lean processes – on to its customers in the form of attractive terms and
conditions, thus securing its long-term success.


ING-
ING - DiBa offers quality at fair prices. The Bank pays close attention to the high quality of its products
and services; however, it cannot and does not desire to be inexpensive at all costs. Its goal is to offer the
best possible quality at the lowest possible price and customer-friendly conditions.
                                                   F-7




ING-
ING - DiBa is simple – in the best sense of the word. Customers should understand their chosen product.
The Bank intentionally offers a lean product portfolio. The Bank's offering should be transparent and man-
ageable for customers and put them in the position of making their own financial decisions.


The new advertising concept started at the beginning of September 2010, whose focal point is ING-DiBa
customers' positive feeling of having chosen the "right bank", received excellent feedback in the reporting
period.


ING-DiBa looks back overall on a successful 2011 fiscal year. Growth was recorded for all of the Bank's core
products – and we succeeded in outperforming 2010's record profits. This was achieved with 2,986 em-
ployees, including 110 trainees (previous year: 72). Thus, the workforce grew compared to 2010 (previous
year: 2,696). This can be attributed, among other things, to the integration of Commercial Banking. General
and administrative expenses including write-downs amounted to a total of EUR 581 million (previous
year: EUR 543 million).


ING-DiBa's Supervisory Board appointed Herbert Willius, a member of the Bank's Management Board for
many years, as Deputy Chairman of the Management Board in September 2011. Herbert Willius has worked
for the Bank since 1989.




Development of the Segments Retail Customer Assets, Retail Customer
Loans, and Commercial Banking


Retail Customer Assets



General


The Retail Customer Assets segment comprises all of ING-DiBa's products that it offers its retail customers
for investing money at ING-DiBa. These include the core products savings deposits, securities business, and
current accounts.



Savings deposits


In a phase of persistently low interest rates, savings deposits do not currently offer high returns. However,
customers appreciate this stable and predictable form of investment. In the area of savings deposits, the
number of accounts increased to 6.4 million (previous year: 6.1 million). The portfolio volume increased
from EUR 80.4 billion as of December 31, 2010, to EUR 85.9 billion as of December 31, 2011.


Promptly after the ECB raised the key interest rate, ING-DiBa raised the interest rate on the call deposit
account "Extra". The interest rate for deposits in this product was raised to 1.5 percent as of May 16, 2011,
and to 1.75 percent as of July 15 from the first euro with no limit on deposit volume. Customers received 2.5
percent interest p.a. for the first six months on their first Extra account starting on August 1, 2011.


In addition to the Extra account, ING-DiBa offers fixed-term deposit accounts with terms of 3, 6, and
12 months. The Bank pays interest rates between 1.75 percent p.a. (from EUR 10,000, 3 month term) and 2.1
percent p.a. (from EUR 50,000, 12 month term) for deposits to these accounts.
                                                   F-8




In addition to this, the Bank offers interest growth accounts with built-in tiered interest rates, savings
bonds and savings schemes within the scope of capital contribution benefits.



Securities business

The financial markets were characterized by a high degree of volatility in the reporting period. Robust eco-
nomic development in Germany and some neighboring countries, the successful export market, and rising
consumer spending made for a good mood on the stock exchanges, but the European debt crisis always led
to setbacks. The stock exchanges were extremely sensitive to headlines. For instance, there were occasion-
ally sharply contrasting price developments within a single trading day.

The German share index DAX started 2011 at around 7,000 points. The EuroStoxx 50 and leading indices on
the US-based exchanges also showed an upbeat trend at first. But then the worsening debt crisis and ru-
mors that France could lose its AAA credit rating resulted in sharp declines. In August 2011, the DAX at
times lost up to six percent compared to the previous day. On September 12, the German leading index
closed at 5,072 points.

Compared to the beginning of May 2011, when the DAX was quoted at 7,500 points, this signifies a de-
crease of just under 33 percent. In the third and fourth quarters, the index recovered once again with pro-
nounced up-and-down fluctuations and ended 2011 at 5,898 points.

Despite this less-than-ideal environment, ING-DiBa was able to increase the number of securities accounts
maintained at the Bank as of December 31, 2011 to around 874 thousand (previous year: 833 thousand).
Securities account volume fell slightly to EUR 16.0 billion due to decreasing market indices (previous
year: EUR 17.4 billion). The fund volume included in these accounts amounted to approximately EUR 5.7
billion as of December 31, 2011 (previous year: EUR 6.4 billion).

In total, ING-DiBa processed 7.0 million orders for its customers in fiscal year 2011, which represents a
significant increase compared to the previous year (5.9 million) and marks a record amount for ING-DiBa.



Current accounts

Once again, the product "current account" developed very well. The number of current accounts maintained
by ING-DiBa rose to 858 thousand as of December 31, 2011, compared to 730 thousand in the previous
year. Deposit volume in non-interest-bearing current accounts reached EUR 1.6 billion as of December 31 of
the reporting period, compared to EUR 1.3 billion at the end of the previous year, with the debit volume in
current accounts increasing from EUR 160 million to EUR 179 million. Customers appreciate in particular
the fact that these current accounts are maintained without any fees, as well as the opportunity to with-
draw cash free of charge anywhere in the euro area with a VISA card.



Retail Customer Loans


General


The Retail Customer Loans segment comprises all of the Bank's products which its customers can use to
obtain access to a loan from ING-DiBa. This includes two core products: long-term mortgage loans and
typically short-term consumer loans. The retail lending business once again developed very positively in
2011. Existing business trended well in the fiscal year just ended, reflected in decreasing default rates. New
business turned in another convincing performance with high quality, in particular with respect to the
products mortgage loans and installment loans.
                                                   F-9




Mortgage loans


After the German real estate industry enjoyed record sales in the previous year, condominiums and houses
occupied by the owner or purchased as investment properties were also in high demand in fiscal year 2011.
According to the German real estate industry association IVD, real estate agents reported sales increases in
the lower double-digit percentage range. The reasons are obvious: On the one hand, there has never been a
better time to finance real estate due to the low interest rates; on the other hand, investors were hunting
for low-risk real assets. Market demand for mortgage loans rose accordingly.


With new business committed in the amount of EUR 8.4 billion, ING-DiBa was able to further expand its
position as one of the largest German mortgage financiers in fiscal year 2011.


In addition to traditional financing of owner-occupied residential properties with terms between 5 and 15
years and repayment rates between 1 and 10 percent p.a., the Bank offers follow-up financing at terms and
conditions as favorable as they are flexible. At the customer's request, both initial and follow-up financing
can be combined with the respective programs offered by the KfW development bank. Possibilities for
initial financing include the KfW's programs for "residential property" and "residential modernization" as
well as parts of the program for "energy-efficient construction". Follow-up financing can be combined with
the residential modernization program.


Forward loans, with which customers are able to secure the currently low interest rates for follow-up fi-
nancing in the future, also contributed once again in the reporting period to the favorable performance of
the core mortgage loan product. ING-DiBa offers loans such as this with a lead time of up to three years.


As of December 31, 2011, the Bank maintained 673 thousand mortgage loan accounts (previous year: 605
thousand) with a portfolio volume of EUR 56.5 billion (previous year: EUR 51.5 billion). Thus, ING-DiBa suc-
ceeded once again in increasing all mortgage loan figures.



         loans
Consumer loans

Despite the European debt crisis, Germans' propensity to consume remained high in the reporting period.
In light of the continued positive economic conditions in Germany – for example, low unemployment and
higher real incomes – income expectations and the propensity to buy are very stable and could even fur-
ther increase according to a consumer climate survey published at the end of October 2011 by the market
research company GfK. Germans had little fear of losing their jobs and even hoped for higher wages due to
the positive job market situation, which is expected to remain positive in 2012. Consumer spending in
Austria developed in a similarly positive fashion.


The increasing willingness to invest privately resulted in significant growth in the area of consumer loans.
In addition to traditional installment loans, ING-DiBa's product portfolio also includes a flexible line of
credit as a cost-effective alternative to an overdraft facility.


Automobile loans were not only offered in the reporting period at the lowest consumer loan interest rates
in 20 years, they also featured new terms and conditions: For instance, it is possible to enter into the loan
agreement without any fees up to three months ahead of the desired payout date.


Homeowners’ loans apply to owners of real estate. These loans can be used for more than just purchasing
new furniture or implementing modernization projects in the home. They are also appropriate for meas-
ures targeted at increasing energy efficiency in the areas of heating and solar energy.
                                                  F-10




The number of consumer loan accounts rose from around 330 thousand in the previous year to 364 thou-
sand as of December 31, 2011. The portfolio volume amounted to EUR 3.1 billion as of December 31 of the
reporting period (previous year: EUR 2.7 billion). As a matter of principle, ING-DiBa does not offer consumer
loans with price structures based on credit ratings and forgoes receivables that place customers at a dis-
advantage – for example, the conclusion of residual debt insurance policies.



Commercial Banking
Commercial



General

The Commercial Banking segment comprises the corporate customer business. Corporate customers in-
clude large, internationally operating industrial and trading companies as well as other international cus-
tomers of the ING Group with branch offices in Germany.

Our customers profit from the ING Group's international network, in particular in Central and Eastern
Europe.



Corporate customer business

In addition to traditional loans, Commercial Banking also offers its customers short and long-term export
financing, among other products. In the area of financial markets, Commercial Banking also offers products
to hedge currency and interest rate risk as well as solutions for payment transactions, documentary mer-
chandise transactions, and cash management.

As part of its Commercial Banking activities, ING-DiBa successfully advised and supported a number of
reputable German clients in 2011. The quality of the Commercial Banking loan portfolio developed posi-
tively within the framework of the general economic environment and as a result of selectively entering
into new loan agreements.

Loans and advances to customers of Commercial Banking amounted to around EUR 1.6 billion as of De-
cember 31, 2011.

Amounts due to customers amounted to around EUR 0.5 billion as of December 31, 2011.
                                                     F-11




Group Results of Operations


                                                      2011         2010           Change
Inco me Statement                                     €m           €m                €m
Net interest inco me                                 1,326          ,1
                                                                   1 28              198
Net co mmissio n inco me                                41          43                -2
Other net inco me                                     -49            -7              -42
Risk pro visio n                                      -77          -127               50
P erso nnel expenses                                 -203          -186              -17
A dministrative expenses                             -378          -357              -21
P ro fit befo re tax                                  660          494               166
Taxes                                                 -211         -149              -62
P ro fit after tax                                    449          345               104
                Income tax liabilities


Despite the difficult banking environment, the Bank once again successfully improved its results of opera-
tions as compared to the previous year. Profit before tax increased by 34 percent from EUR 494 million in
2010 to EUR 660 million in 2011.

                                                                           2011             2010
                                                                           €m                €m
Interest income
Interest income from lending transactions                                 2,978            2,574
Total interest income from lending transactions                           2,978            2,574
Interest income from available-for-sale securities                         425               381
Interest income from held-to-maturity securities                           256               346
Interest income from other derivatives                                     100               175
Other interest income                                                     – 643             -750
Total interest income                                                     3,116            2,726

Interest expense
Interest expenses on deposits from banks                                  – 204             -156
Interest expenses on amounts due to customers                         – 1,459              -1,228
Interest expenses on securitized liabilities                                –7                 0
Interest expenses on other derivatives                                    – 114             -213
Other interest expenses                                                     –6                -2
Total interest expenses                                               – 1,790              -1,598
Net interest income                                                       1,326             1,128



Although interest rates remained low during the reporting year, the Bank's net interest income again de-
veloped positively. At EUR 1,326 million, net interest income was 18 percent higher than the prior-year
amount of EUR 1,128 million. At the same time, interest income on lending grew through continuing strong
new business. The sustained positive development in deposit volume and the improved conditions for
customers resulted in increased interest expense from amounts due to customers. Other interest income
which also includes the net interest expenses from hedge derivatives declined from EUR -750 million to
EUR -643 million. Overall, interest income rose by EUR 390 million to EUR 3.116 million. Interest expense
rose from EUR 1.598 million to EUR 1.790 million.


The decrease of EUR 2 million in net commission income can be mainly attributed to lower income related
to the introduction of a flat cash withdrawal fee.
                                                       F-12




 Other net income of EUR -49 million (previous year: EUR -7 million) comprises the measurement
 gains/losses from derivatives and hedged items in the amount of EUR -29 million (previous year: EUR -21
 million) and the loss on financial investments and investment property in the amount of EUR 157 million
 (previous year: EUR -34 million) and other income in the amount of EUR 137 million (previous year: EUR 6
 million). The EUR 157 million loss on financial investments and investment property was due in particular
 to EUR 136 million in impairments on Greek government bonds, which were written down to fair value as
 of December 31, 2011. Early terminations of long-term loan agreements with ING-Bank N.V. resulted in
 non-recurring other income in the amount of EUR 167.5 million.


 Administrative expenses increased by 5.8 percent to EUR 378 million. The increase in administrative ex-
 penses is essentially related to the integration of Commercial Banking and the Pfandbrief issue. Marketing
 expenses increased by EUR 3 million in comparison with the previous year. Despite this, the Bank continues
 to focus on processes to optimize cost structures while maintaining or improving quality.


 Personnel expenses increased by EUR 17 million to EUR 203 million as a result of the acquisition of Com-
 mercial Banking and the additional recruitments.


 In comparison to the previous year, expenses for risk provisions decreased by EUR 50 million to EUR 77
 million. At year's end, the Bank's valuation allowances totaled EUR 493 million (previous year: EUR 473
 million).


 Income tax expenses of EUR 211 million comprise the current tax expense of EUR 240 million and positive
 deferred tax income of EUR 29 million. In accordance with the principle of substance over form, and de-
 spite the existence of a consolidated tax group, both the current and deferred income taxes are disclosed in
 the IFRS financial statements by the entity responsible, ING-DiBa AG.



 Assets, Liabilities and Financial Position
                                               12/31/2011       12/31/2010       Change         Change
  Balance sheet                                      €m               €m            €m               %
  Assets
  Loans and advances to banks                         5.8              8.7          -2.9          -33.3
  Loans and advances to customers                    74.7             62.7          12.0           19.1
  Adjustment to portfolio fair value hedges           2.4              1.6           0.8           50.0
  Financial investments                              22.2             20.3           1.9            9.4
  Positive fair value of derivatives                  0.3              0.4          -0.1          -25.0
  Other assets                                        4.1              2.6           1.5           57.7
  Total assets                                      109.5             96.3          13.2           13.7
  Liabilities
  Securitized liabilties                              0.5              0.0           0.5          100.0
  Deposits from banks                                 7.9              5.7           2.2           38.6
  Due to customers                                  90.9              82.2           8.7           10.6
  Negative fair value of derivatives                  3.0              2.1           0.9           42.9
  Equity                                              5.5              4.8           0.7           14.6
  Other liabilities                                   1.7              1.5           0.2           13.3
  Total liabilities and equity                      109.5             96.3          13.2           13.7
Ertragsteuerverbindlichkeiten

 ING-DiBa's total assets grew by 13.7 percent during the course of 2011 to EUR 109.5 billion. There was al-
 ways sufficient liquidity during the fiscal year. Please also see our explanations in regards to this in the risk
 report.
                                                     F-13




Overall, our assets and liabilities and financial position are very satisfactory.


Loans and advances to banks decreased by EUR 2.9 billion to EUR 5.8 billion as a result of the decrease in
interbank transactions.


With respect to liabilities, deposits from banks increased by 38.6 percent to EUR 7.9 billion. Essentially, this
is attributable to an increase in refinancing liabilities from KfW development loans.


The loans and advances to customers totaling EUR 74.7 billion comprise 68.3 percent of total assets. The
increase in loans and advances to customers of EUR 12 billion since 2010 is primarily attributable to the
investment in Dutch residential mortgage backed securities and growth in mortgage lending.


Financial investments increased in 2011 by EUR 1.9 billion to EUR 22.2 billion. The portfolio of financial in-
vestments classified as AfS increased from EUR 13.2 billion to EUR 16.6 billion. The portfolio of financial
investments classified as HtM declined from EUR 7.1 billion to EUR 5.6 billion. Please also see details on the
risk profile of the loan portfolio in the risk report.


The positive fair value of derivatives of EUR 0.3 billion and the negative fair value of derivatives of EUR 3.0
billion are related to the Bank's hedging transactions. Some of the derivatives are part of the Bank's hedge
accounting.


ING-DiBa's entire volume of deposits increased from EUR 82.2 billion at the end of 2010 to EUR 90.9 billion
at the end of the year under review.


Growth was thus 10.6 percent and is primarily attributable to an increase in customer time deposits and
the discount campaigns conducted in 2011 for call deposit accounts in Germany and Austria. As of Decem-
ber 31, 2011 customers maintained approximately 6.4 million savings accounts and current accounts at
ING-DiBa.


Equity increased by EUR 0.7 billion to EUR 5.5 billion.


All of ING-DiBa's share capital was held by ING Deutschland GmbH, Frankfurt am Main, on December 31,
2011.


During the fiscal year, contingent liabilities increased from EUR 4.3 billion to EUR 9.9 billion. The integration
of the German branch of ING Bank N.V. gave rise to the addition of contingent liabilities from the corporate
customer business during the reporting year.


ING-DiBa participates in the deposit protection fund of the Bundesverband deutscher Banken e.V., Berlin,
(Association of German Banks). In addition, based on the German Deposit Protection and Investor Com-
pensation Act (Einlagensicherungs- und Anlegerentschädigungsgesetz, "EAEG") it belongs to the Compensa-
tion Scheme of German Banks (Entschädigungseinrichtung deutscher Banken GmbH, "EdB"), Berlin. It is
also a member of the following banking and other associations: Bankenverband Hessen e.V., Frankfurt am
Main, Bayerischer Bankenverband e.V., Munich, Gesamtverband Niedersächsischer Kreditinstitute e.V., Ha-
nover, Verband der Auslandsbanken Deutschland e.V., Frankfurt, Verband deutscher Pfandbriefbanken e.V.,
Berlin, and Bankenfachverband, Berlin.
                                                     F-14




Events after the Reporting Date


Significant events after the close of the fiscal year


In March 2012, the ING Group approved the exchange of Greek government bonds. In exchange for the
Greek government bonds, ING-DiBa received bonds issued by the European Financial Stability Facility
(EFSF) and new Greek government bonds, in addition to a derivative financial instrument linked to the
development of Greece's gross domestic product. The new government bonds have a step-up coupon.


As part of this successfully implemented exchange, EUR 41.8 million was recognized after the end of the
reporting period. As a result, there was no significant change in the carrying amounts of Greek government
bonds as compared to December 31, 2011.


There were no further significant events after the close of the fiscal year.




Risk Report


Principles of risk management



Risk categories


ING-DiBa is exposed to risks within the scope of its business activities; the following risks were classified as
significant risk categories as part of the annual risk inventory based on the Bank's business model:


Market price risks represent the risk of potential losses due to adverse changes in market prices (e.g.
bonds) or parameters influencing market price (such as interest rates, spreads, or volatilities).


Liquidity risk is defined as the risk of not being able to meet current or future payment obligations in full
or on time (liquidity risk in the narrow sense). In addition, this risk category subsumes potential losses as a
result of the increase in the cost of refinancing funds on the money and capital markets (refinancing risk)
as well as the risk of a shortfall in proceeds from the sale of assets due to market conditions (market li-
quidity risk).


Traditional credit risk is a component of counterparty default risk and represents the risk of a loss due to
the default or deterioration in creditworthiness of an external counterparty.


Operational risk signifies the risk of losses incurred as a result of the inappropriateness or failure of inter-
nal processes, individuals, or systems (e.g. failure of data processing systems, misappropriation of funds,
human error, erroneous processes, structural weaknesses, insufficient monitoring) or as a result of external
events (criminal acts, natural disasters, etc.). This definition also includes legal risks resulting from contrac-
tual agreements or the legal environment.


ING-DiBa is also exposed to reputational risks and model risks in connection with its business activities.
Reputational risk describes the risk of losses resulting from the loss of trust on the part of customers or
                                                   F-15




business partners. Model risk is a theoretical risk that could occur if actual developments differ substan-
tially from modeled values.



Organization


The entire Management Board is responsible for the organization of risk management at ING-DiBa, includ-
ing its branch offices, associated companies and participating interests. It is responsible for determining
the risk profile and establishing the risk strategy and risk-bearing capacity concept. The Management
Board regularly informs the Supervisory Board of developments in ING-DiBa's business and risk situation.


The principles of risk strategy are implemented within the framework of a comprehensive risk manage-
ment system. In addition to specific individual risk strategies for every significant type of risk, this also
includes concepts for the management of the overall risk profile as well as a written directive specifying
the operational implementation of the strategic orientation. The risk management system is set up dy-
namically and is adjusted continuously based on the development of the business and changing operating
environment.




                          Business & Risk Strategy


                                                          Risk Bearing
                Risk Inventory /                            Capacity
               Materiality Analysis
                                                      Stress-Testing
                                                         Concept

                Market        Liquidity          Credit          Operational
                 Risk           Risk              Risk              Risk
               Strategy       Strategy          Strategy          Strategy


As part of the annual risk inventory, the Bank ensures that all significant risks for the ING-DiBa Group are
identified. The entire Management Board of ING-DiBa installed an organizational structure for risk man-
agement based on this risk profile which ensures the functional and hierarchical separation of the risk-
bearing organizational units.


The management of ING-DiBa's market price and liquidity risks – previously handled by Controlling – has
now been taken over by the newly established Market & Liquidity Risk Management department. The Risk
Management department is responsible for the Group-wide management of ING-DiBa's counterparty de-
fault and operational risks. This department is divided into the Retail Credit Risk Management, Institutional
Credit Risk Management, Risk Analytics, Regulatory Risk Management, Information Risk Management, Op-
erational Risk Management, and Collection desks. The Credit Risk Management desk of the ING Bank
branch is responsible for the operational management of credit risks resulting from Commercial Banking
activities. The tasks from the compliance and anti-money laundering areas have been bundled in a sepa-
rate department. All units named report directly to the Chief Risk Officer.
                                                    F-16




Risk committees


The Management Board established the following risk committees as part of its overall responsibility for
the risk management of the Bank:


The Asset and Liability Committee (ALCO) is responsible for managing the market price and liquidity risks
of ING-DiBa's overall portfolio as well as the risk structure of the Bank's institutional investments. Special
tasks include establishing specifications and guidelines for the management of overall risk in connection
with the strategic orientation of the banking book, in particular, limit allocation for market and liquidity
risks and discussing the Bank's earnings and risk situation. The committee is made up of the entire Man-
agement Board as well as the heads of the Market & Liquidity Risk Management, Risk Management, Con-
trolling, Treasury, and Audit Services departments as well as the head of the Accounting department.


The Credit Risk Committee (CRC) deals with the identification, measurement, management, and monitor-
ing of counterparty default risks and/or credit risks. Its special duties include the establishment of specifi-
cations and guidelines for the lending business, the limit allocation for credit risks, the definition of the
limit system, the decision regarding the structure of the risk classification process and the establishment
of standard risk costs. In addition to the entire Management Board, the heads of the back offices (the head
of Real Estate Financing and the heads of the Service Center, Consumer Loans, Risk Management, and
Credit Risk Management departments of the ING Bank branch) as well as the heads of the front offices of
ING Bank branch (Clients and Products) and head of Audit Services are in the CRC.


The task of the Operational Risk Committee (ORC) is to identify, measure and monitor ING-DiBa's opera-
tional risks, and to ensure that appropriate measures are taken to manage operational risks at the man-
agement level by the respective responsible line managers. The committee comprises the entire Manage-
ment Board and the heads of IT & Project Management and Customer Service as well as the Risk Manage-
ment, Legal, Consumer Loans, Partner Sales, and Audit Services departments and the Operational Risk
Management desk. In addition, the Bank's Compliance Risk Officer and the Information Security Officer are
also part of the ORC. In addition to the ORC, the Management Board established various working groups
(including Fraud and Online Security) that deal with operational risks and remain in regular close contact
with the ORC participants.



Risk strategy


The overall risk strategy is in line with the Bank's business strategy and represents a framework for risk
management at ING-DiBa. The Bank's principles of risk strategy and the resulting orientation for the risk
policy, which is consistent with the business strategy are formulated in the overall risk strategy.


Specific individual risk strategies are derived for each significant risk category based on the overall risk
strategy, which complete ING-DiBa's risk management system together with various concepts for the man-
agement of the Bank's overall risk profile (including risk inventory, risk-bearing capacity concept, and
stress-testing concept) and the written directive. In conjunction with the risk-bearing capacity, the overall
risk strategy reflects the Bank's risk appetite.


The deliberate and controlled taking on of risks within a prescribed range with appropriate compensation
for the risk is a core basis for a bank's realization of profits. The goal of all of ING-DiBa's risk management
activities is to ensure the Bank's continued existence, including under adverse conditions. In this context,
risk is defined as the possibility of a negative deviation from an expected financial result. Risk management
comprises all activities concerning the identification, analysis, measurement and communication of risks,
as well as the decision to take on (or not take on) and control of risks.
                                                    F-17




The Bank's risk strategic orientation is derived from the idea of fairness and ING-DiBa's express orientation
on quality, which includes a sound and trustworthy way of doing business. Consequently, risks may only be
incurred with respect to all business activities to the extent necessary to reach the Bank's strategic goals.
An unnecessarily risky and complex business and risk policy is strictly rejected.



Risk-bearing capacity concept
Risk-


ING-DiBa has implemented a Risk-Bearing Capacity Concept for regularly assessing the risk situation at the
overall bank level. The risk-bearing capacity reveals the extent to which the defined risk-taking capital can
carry the risk exposure.


The objective of this concept is that a sufficient amount of risk-taking potential is held at all times. The
Risk-Bearing Capacity Concept is embedded in the Bank's stress-test concept and represents an important
part of ING-DiBa's risk management activities.


In order to determine the overall risk position, the individual risk types are first considered separately. Each
risk type is quantified using appropriate models. When quantifying the counterparty default and opera-
tional risks, the same methods are used as for calculating the economic and regulatory minimum capital
requirements under Basel II (Internal Ratings-Based Approach – IRBA or Advanced Measurement Approach
– AMA). Interest rate and liquidity risks are quantified using the Bank's present value model.


The Risk-Bearing Capacity Concept remained in place in 2011 without any conceptual changes compared to
the previous year. The orderly inclusion of the corporate customer business in the Bank's risk model was
also analyzed and ensured and the Risk-Bearing Capacity Concept was expanded to include the corporate
customer business in connection with the integration of the Commercial Banking segment. The Bank also
methodically refined and enhanced the Risk-Bearing Capacity Concept. In the future, the Bank's risk-
bearing capacity will be assessed from both a going-concern as well as a liquidation perspective. The re-
vised concept was implemented starting January 1, 2012.



Risk-taking potential and risk limits
Risk-


The risk-taking potential is determined by the Bank's capital that is available for covering its risk exposure
and potential risks. Only a portion of the risk-taking potential is ever allocated as risk-taking capital. The
amount of allocated risk-taking capital and the definition of the limit buffer, the overall limit, and the allo-
cation of limits to the individual risk types is determined annually by the ALCO and is based on the busi-
ness strategy and the associated risk appetite of the Management Board.


No diversification effects between the risk types are currently considered. The risks quantified using the
instruments appropriate for the respective risk type are compared to the corresponding limits and regu-
larly monitored to ensure risk-bearing capacity.


The limits or limit allocation can be changed at any time if required. Limit changes must be approved by
the ALCO and subsequently confirmed by the respective responsible committee (ORC or CRC).


Risk-
Risk-bearing capacity in the year under review


The Bank's risk-bearing capacity was ensured at all times during the course of the 2011 fiscal year. The
existing limits were not exceeded.
                                                       F-18




                                   Year under review   Year under review      Prior year           Prior year
                                          12/31/2011           12/31/2011     12/31/2010           12/31/2010
                                             Limits    Utilization of limit      Limits    Utilization of limit

                                                €m                 % limit          €m                 % limit

Credit risks                                   1,650                  72%          1,200                  97%
Market and liquidity risks                     1,250                  75%           500                  26%
Operational risks                               300                  62%            300                   54%

Total limits                                  3,200                   72%         2,000                   73%

Free risk-taking capital                        992                                1,690
  Limit buffer                                  850                                 800
Risk-taking potential                         5,042                               4,490



The limit for counterparty default (credit) risk was increased from EUR 1.2 billion to EUR 1.65 billion at the
beginning of the year in light of the planned growth and in consideration of an adequate buffer. The risk
appetite did not change. The increase in market price risk resulted mainly from an intentional reduction in
the duration of the investments from savings deposits in the second half of 2011. This resulted in a higher
calculated risk of falling interest rates.


The utilization of the entire risk-taking potential amounts to 46 percent as of December 31, 2011 (previous
year: 32 percent). The risks from the ING Bank branch's Commercial Banking business were included in the
calculation of risk-bearing capacity for the first time in the third quarter of 2011. The effect on the Bank's
overall risk exposure was insignificant; therefore, it was not necessary to adjust the management frame-
work.


The following graphic compares the utilization of limits and the risk-taking potential. The utilization of
limits decreased slightly in comparison with the previous year and amounted to 72 percent as of December
31, 2011 (previous year: 73 percent).




Stress tests


The performance of stress tests within ING-DiBa is a key component of risk management and serves along-
side other risk management concepts (such as risk inventory and risk-bearing capacity) for managing the
Bank's overall risk profile.
                                                   F-19




ING-DiBa established other stress procedures in addition to observing representative stress scenarios
within the framework of the Risk-Bearing Capacity Concept. These procedures are observed within the
Risk-Bearing Capacity Concept and, in addition to standardized risk category-specific stress tests con-
ducted periodically each quarter, they also include integrated ad hoc stress tests and inverse stress tests.


The effects of a strong global recession are examined for all significant risk types in the representative
stress scenarios and observed in the context of the Risk-Bearing Capacity Concept. The objective is to re-
view the Bank's risk-bearing capacity in the event of a potentially sharp economic downturn. An increase in
probabilities of default (PD) and losses given default (LGD) was assumed for counterparty default risks to
simulate a strong recessionary phase. The effects of the strong recession on market price and spread risks
are modeled by changing in market interest rates and/or spreads. A stress factor for the economic capital
was assumed for the operational risks. The results of the representative stress tests across risk categories
conducted as of December 31, 2011, show that the available risk-taking capital also sufficiently covers the
overall risk exposure under stress.


The effects of various recessive macroeconomic trends on economic and regulatory capital are analyzed as
part of the standardized integrated stress tests for counterparty default risk. The Bank defined standard-
ized scenarios for various degrees of economic downturn for all sub-portfolios in the retail and institu-
tional business as well as in Commercial Banking, whereby the recession scenarios are simulated using an
increase in the probability of default as well as elevated losses given default. With respect to the standard-
ized stress tests for market price risk, the impact of market interest rate shocks, interest rate adjustments,
and changes in volume on the expected result are observed, with the changes in market interest rates
modeled using parallel shifts (shocks) of yield curves and tilting scenarios.


The appropriateness of stress scenarios are reviewed annually and adjusted as needed.


For the integrated ad hoc stress tests, the Bank installed an expert committee made up of board members
and specialists in management positions which defines one or more scenarios for the Bank – taking the
current economic operating environment into account – that could arise in particular from a combination
of various economic parameters. The results of the stress tests are assessed in the expert committee
against the background of risk-bearing capacity. Potential management impulses are also derived for the
future. As part of the ad hoc stress tests, the Bank developed and analyzed three stress scenarios during
the reporting year. In addition, the Bank performed inverse stress tests for the first time in 2011.


The two departments Risk Management and Market & Liquidity Risk Management are responsible for car-
rying out stress tests, the performance of which is part of the Bank's risk management process and internal
process for ensuring risk-bearing capacity (Internal Capital Adequacy Assessment Process, ICAAP).



Risk concentration


With its focus on retail business, ING-DiBa consciously accepts certain concentrations at the product level
in this business line. These concentrations are qualified by the broad diversification within the individual
portfolios of the standardized retail business. A homogeneous distribution in the retail portfolio is ensured
by defining certain product features and specifying maximum loan and limit amounts as well as maturities.


A broader diversification was achieved for the Bank's overall portfolio with the integration of Commercial
Banking. The intentional concentrations on selected clients, industries, and asset classes in the institutional
business and in Commercial Banking occur against the background of size specifications and target cus-
tomer definitions. These are regularly monitored.
                                                    F-20




The objective of risk management activities is to identify risk concentrations within the scope of analyses
and to find opportunities for diversification, if necessary. The Bank defined specific limits outside the Risk-
Bearing Capacity Concept for the management of concentrations. The limits are reviewed regularly and
adjusted if necessary. In addition, all loan portfolios are analyzed for potential concentrations in separate
concentration reports. The results are a part of regular reporting in the risk committees (CRC, ALCO).


ING-DiBa implemented a country limit system through which the country risks from all business segments
are monitored for the management of concentrations at the country level. Commercial Banking activities
were integrated in the country limit system for the purposes of holistic management of all risks from in-
ternational transactions.


Concentrations with respect to interest rate risk could arise as a result of too narrow a focus on individual
points of the yield curve. Corridors for each maturity bucket are defined for the net cash flow profile in
order to avoid these concentrations in individual maturity buckets


In terms of liquidity risk, refinancing is intentionally concentrated on retail savings deposits, comprised in
turn of a very granular portfolio in light of ING-DiBa's business model with its focus on the retail business
in Germany. The issue of mortgage Pfandbriefe as well as global loans from the Kreditanstalt für Wied-
eraufbau (KfW) for the granting of home construction loans represent other long-term sources of refinanc-
ing. In addition, measures are taken to diversify the refinancing. The risk quantification, monitoring and
management of concentrations is carried out within the framework of special analyses, scenario simula-
tions, and stress test analyses.



Risk reporting


The Market & Liquidity Risk Management and Risk Management departments as well as the ING Bank
branch's Credit Risk Management are responsible for risk reporting, which is directed to the Chief Risk
Officer or the entire Management Board as well as to members of the corresponding risk committees de-
pending on the focus of the risk. The Supervisory Board is informed by the Management Board on a regular
basis, at least four times per year.


Reporting is tailored to the significance of the risks and is prepared on a daily, weekly, monthly or quarterly
basis. In the event of changes in important parameters of risk calculation or relevant factors of influence in
the market environment, the decision-makers are promptly made aware of all relevant information.


The risk-bearing capacity is generally calculated quarterly, or also on a monthly basis if necessary. The re-
sults are presented to the participants of the ALCO as well as other risk committees if applicable.


Documentation of the risk utilization by individual risk type is provided through a regular report from both
departments mentioned above and includes all units belonging to the ING-DiBa Group.



Monitoring and management of market price risks


Risk definition


Market price risk is generally understood as the potential loss resulting from a change in market parame-
ters.
                                                    F-21




Due to its business model and the strategy pursued, ING-DiBa is only exposed to a limited number of mar-
ket price risks. Essentially, the Bank differentiates between general interest rate risk (risk of changing inter-
est rates) as the potential loss resulting from a change in the risk-free interest rate and the spread risk,
which ING-DiBa defines as residual risk, i.e., the risk that the value of a financial instrument changes at a
higher or lower rate than the overall market.


The assumption of currency risk (also exchange rate risk), i.e., the risk of impairment of a position resulting
from changes in one or more foreign currency exchange rates, is not part of the Bank's core business activi-
ties. Foreign currency transactions are only entered into in connection with customer transactions and are
generally hedged directly using corresponding countertransactions. Open foreign exchange positions are
not actively entered into and arise as residual amounts.


Volatility risks arise in two forms at ING-DiBa:


Explicit options – associated with the risk that the value of an option position reacts due to potential
changes in value resulting from market fluctuations of the volatilities applied for the option valuation.
These changes can result in impairment of the position (caps, floors, swaptions). The Bank currently holds
no positions in explicit options. Consequently, the volatility risk from explicit options is insignificant.


Implicit options – associated with the risk of changes in customer behavior due to market fluctuations.
Implicit options are taken into account in particular in the model risk in the area of other risks.


The area of share and fund price risk as well as commodities risk is irrelevant for ING-DiBa's business.



Organization


The Management Board commissioned the Market & Liquidity Risk Management department with moni-
toring compliance with market price risk regulations. This responsibility includes application of methods
and models for risk identification and measurement, monitoring limits and the reporting function. The
Treasury department is responsible for the implementation of operational management measures. Within
the scope of the segregation of functions, trade activities of the Treasury are organizationally separate from
the settlement activities of the Back Office.



Market price risk strategy


The strategic orientation of market price risk management is based directly on the business strategy.


Market price risks are generally incurred only in connection with asset/liability management and thus form
the basis for pursuing the general corporate policy goals in the Retail and Commercial Banking segments.


Intentionally open positions are not entered into in order to bet on certain changes in market price pa-
rameters. The Bank does not carry out any trading transactions with the intention of generating short-term
profits by taking advantage of market price fluctuations. Therefore, the Bank does not use a trading book
and holds the positions in its banking book. In light of this, ING-DiBa pursues a passive strategy in the area
of interest rate risk.


As a matter of principle, ING-DiBa stipulates that market price risks may only be incurred in line with the
risk tolerance established by the Management Board. The primary goal of the market price risk strategy is
                                                   F-22




to ensure that the sum of all market risks incurred always remains smaller than the risk-taking capital
allocated for this type of risk.


The following goals are cited with respect to the Bank's continued existence as a going concern:

   •     Ensuring the sustainability of the earnings and capital base as well as the security of customer
         deposits

   •     Also taking unexpected market developments into account and/or avoiding unbearable market
         price risk

   •     Ensuring sufficient leeway to adjust terms and conditions in the event of unfavorable changes in
         market interest rates

   •     Limiting investment duration such that a positive net profit can be generated for the period
         and/or there is no significant negative impact on the present value of the Company in the event of
         unexpectedly significant changes in interest rates

   •     Minimizing currency risk

   •     Generating transparency of actual and potential market price risks

   •     Complying with statutory and regulatory as well as internal and Group-wide guidelines



Operational risk management and risk controlling


The management of ING-DiBa's market price risk includes the following core elements for which the Mar-
ket & Liquidity Risk Management department is responsible:

   •     Ensuring the correct entry of position data

   •     Reviewing adherence to limits and approval for exceeding limits

   •     Identification, measurement, and management of market price risks

   •     Preparation, maintenance, and further development of market price risk models

   •     Keeping the management adequately informed of the risk situation

   •     Conducting scenario analyses and stress tests.


The Bank pursues a dual management approach in the area of interest rate risk. ING-DiBa analyzes the
effects of interest rate risk on the one hand from a periodic perspective for net interest income and on the
other hand in the present value analysis for the economic value of the Bank.


The Earnings at Risk (E@R) approach is used for analyzing the effects on net interest income. This approach
involves simulation calculations for a 36-month planning horizon, which forecast net interest income as
well as its change for various scenarios and reflects planned future new business. Market and business
parameters (e.g. volume growth, customer terms and conditions) are changed and their effects are exam-
ined as part of the analysis.
                                                   F-23




A warning limit was set to monitor the analysis results within the scope of the E@R approach. The indica-
tor is calculated from the ratio of the scenario's forecasted net interest income to the planned total costs
and is designed to ensure that the income generated from business activities exceeds the costs under all
observed scenarios.


ING-DiBa applies the Economic Value at Risk (EV@R) on the basis of a detailed present value model as a
metric for measuring the present value effect of interest rate risk. The metric describes the sum of the
carrying amount of shareholders’ equity and "added value", which is defined as the present value of all
future cash flows from continuing operations and represents an indicator for the increase in value of the
banking book.


Within the regular monthly simulation analyses, the effects of changes in market interest rates on the
present value of the portfolio are analyzed. The risk amount is determined as the respective difference in
present value under a defined interest rate scenario from the present value of the base scenario. ING-DiBa
uses internal models to calculate the present value of customer transactions. Appropriate assumptions are
made for products with unknown capital commitments and for options contained in the products. The
assumptions applied are validated through regular backtesting.


The Basel II ratio serves as the standard limit for the deviation of the Economic Value at Risk. This metric
limits the negative change in present value for a defined interest rate scenario to 20 percent of the Bank's
liable capital. The relevant scenario is determined based on the corresponding specifications of the super-
visory authorities.


In contrast to retail banking and the institutional business, the Bank enters into foreign exchange positions
in Commercial Banking in connection with customer transactions. However, these transactions are gener-
ally hedged through corresponding countertransactions in order to minimize the remaining risk. The Bank
quantifies and limits currency risk using two metrics. Firstly there is a position limit that limits the net
sum of all open foreign exchange positions. In addition, a Foreign Currency Value at Risk (FX VaR) was es-
tablished and limits were defined. Both metrics are calculated on a daily basis.



Sensitivity analysis in the year under review


The sensitivity of net interest income measures the effect on net interest income in the next 12 months in
the event of a shock-like increase or decline in the yield curve. Following the ad hoc change, the analysis
assumes that the interest rate remains at the changed level for one year.


The following graphic depicts the results from the sensitivity analysis of net interest income for an interest
rate shock of 100 basis points (BP) upwards and downwards in all maturity bands:


Sensitivity o f net interest inco me                                2011                      2010

Scenario                                                            n
                                                                    i %                       n
                                                                                              i %

+100bp                                                             -0.73                     -2.07


-100bp                                                               1
                                                                    1 .81                    14.85




As of December 31, 2011, assuming a parallel interest rate increase of +100 basis points, results of the sen-
sitivity analysis show a decline of -0.73 percent (previous year: -2.07 percent) in net interest income com-
pared with the starting point. Assuming a parallel interest rate decrease of 100 basis points, net interest
income would have increased by 11.81 percent (previous year: 14.85 percent) based on the existing low
                                                   F-24




market interest rate level. The decrease in volatility compared to the previous year was primarily the result
of a slight decrease in the duration of investments from savings deposits and the associated elevated
speed of adjustments on the assets side to reflect changes in market interest rates.


The following graphic depicts the results of the sensitivity analysis on economic value. The analysis illus-
trates the impacts of interest rate changes on the present value of the overall Bank. The change in the
present value of the overall Bank cannot be linked directly to the impact on the income statement or eq-
uity. The greatest portion of the changes in present value arises from items not measured at fair value;
changes in the value of those items thus have no impact on the statement of financial position. During the
sensitivity analysis, an ad hoc parallel shift of the yield curve of +/- 100 basis points in all bands is as-
sumed:


Eco no mic value sensitivity                                        2011                     2010


Scenario                                                            n
                                                                    i %                      n
                                                                                             i %

+100bp                                                             3.57                     -0.68

-100bp                                                             -5.66                     3.39




Assuming an interest rate shock of +100 basis points, the Economic Value would increase by 3.57 percent
(previous year: -0.68 percent), whereas a negative change of -5.66 percent would result from a decrease in
the interest rate (previous year: +3.39 percent). The reason for the negative exposure given falling market
interest rates is the shorter duration of investments made with the call demand deposits.



Limitation


The direction, extent and timing of changes to market interest rates are by nature unknown and cannot be
predicted. ING-DiBa manages its portfolio accordingly by limiting the effects of changes in the market
interest rate on financial earnings power and capital base. At ING-DiBa, market price risks are monitored
using a system of risk limits based on sensitivity and present value analyses.


The ALCO approves the limits and is regularly informed of limit utilization. The Management Board and the
ALCO are informed immediately if a limit is exceeded.



       price
Market price risk reporting


Timely information on relevant developments which could impact net interest income or the Economic
Value at Risk, for example, is an essential element in ING-DiBa's market price risk management organiza-
tion.


As an independent unit, the Market & Liquidity Risk Management department prepares the relevant re-
ports on a daily, monthly, and quarterly basis. Reporting lines exist to the local ALCO and the ALCO of the
parent company, although the respective members of the board are also automatically included. Reporting
provides information on monitoring of the limits and requirements in place. The Supervisory Board is in-
formed of the risk situation on a quarterly basis at a minimum. In addition, in the event of special or unex-
pected developments, reports are provided on an ad hoc basis.
                                                     F-25




Monitoring and management of liquidity risks


Risk definition


Liquidity risk is not an actively generated risk; instead, it is a by-product of core business activities. Disrup-
tions in the liquidity of individual market segments (e.g. in crisis situations), unexpected events in the loan
and deposit business (withdrawal of deposits, late payments, etc.), or the deterioration of the Bank's refi-
nancing basis (e.g. as a result of a decrease in its rating) can result in the institution no longer being able
to meet its payment obligations in an extreme case or can be reflected in a decrease in net income.


With respect to liquidity risk, the Bank accordingly differentiates between

    •     The risk of insolvency (liquidity risk in the narrow sense) as the risk that the Bank can no longer
          meet its current and future payment obligations in full or on a timely basis

    •     Refinancing risk (liquidity maturity transformation risk) as the risk of only being able to raise ad-
          ditional refinancing funds at increased market interest rates on the money and capital markets

    •     Market liquidity risk as the risk of only being able to liquidate assets (e.g. securities) on the mar-
          ket with discounts as a result of extraordinary circumstances



Organization


The Management Board bears the responsibility for structuring the organization and tasks within liquidity
risk management. Methods and processes for risk management along with the related responsibilities
were established on the basis of the liquidity risk strategy.


Due to ING-DiBa's business model, liquidity risk dovetails closely with market risk. The Management Board
commissioned the Market & Liquidity Risk Management department with monitoring compliance with
liquidity risk regulations. This responsibility includes application of methods and models for risk identifica-
tion and measurement, monitoring limits and the reporting function.


The Treasury department is responsible for the implementation of operational management measures.



Liquidity risk strategy


As a result of its specific business model, ING-DiBa's assets are normally less liquid than its liabilities, the
majority of which are comprised of technically short-term demand deposits by retail customers. Conse-
quently, ING-DiBa's greatest liquidity risk is an adverse trend in the volume of retail deposits given a fixed
commitment of longer-term assets (no growth and/or withdrawal of deposits). Such a case can result in
losses if assets either have to be liquidated or alternatively refinanced via the money and capital markets.
In an extreme case, the aforementioned development can lead to insolvency.


Consequently, the primary goal of the liquidity risk strategy is ensuring a stable and comfortable liquidity
position that prevents in particular insolvency as well as potential losses from the liquidation of assets or
refinancing on the money and capital markets. The following goals are cited with respect to the Bank's
continued existence as a going concern:
                                                     F-26




    •    Ensuring solvency at all times (provision of adequate liquidity reserves) under normal conditions
         and in stress situations

    •    Ensuring the adequate management of liquidity risk in the narrow sense for the management of
         the Bank's expected liquidity requirements

    •    Provision of an appropriate liquidity buffer in order to close financing gaps in a crisis situation

    •    Compliance with statutory and regulatory as well as internal and Group-wide guidelines

    •    Maintaining an adequate liquidity crisis organization



Liquidity contingency plan


ING-DiBa has established a liquidity crisis plan that specifies actions to be taken by the Management
Board and the ALCO, Treasury, and Market & Liquidity Risk Management to deal with liquidity crisis situa-
tions. The liquidity crisis plan represents the core element of liquidity management in crisis situations. It
includes the following aspects:

    •    Defined criteria to initiate the liquidity crisis plan

    •    Strategy for covering liquidity shortages in emergency situations

    •    Rules for tasks, responsibilities, and decision-making authority in a crisis

    •    Rules for informing management and preparing the information in a timely manner

    •    The internal/external paths of communication used in the event of a liquidity shortage

    •    Measures that are continuously reviewed for their ability to be executed and adjusted if necessary

    •    The results of stress tests to be taken into account

    •    Planning of alternative refinancing sources (customer deposits, central bank deposits, money
         market transactions, sale of liquid assets, securitization of assets, Pfandbrief issues), taking any in-
         come shortfall into account.


In the event of a crisis, the liquidity crisis management team will be convened to determine and initiate all
necessary measures and activities. This special committee is made up of members of the Management
Board and the responsible departments.


The most important tasks include assessing the crisis situation and activation and execution of the liquid-
ity contingency plan. The chairman of the local liquidity crisis management team liaises with ING Direct
N.V. and the ING Group.



Operational risk management and risk controlling
Operational


ING-DiBa's liquidity risk management includes the following core elements for which the various units in
the Market & Liquidity Risk Management, Treasury, Trade Settlement, and Accounting departments are
responsible:

    •    Ensuring the correct entry of position data
                                                      F-27




      •     Review of adherence to limits and approval for exceeding limits

      •     Determination of medium and long-term refinancing structure within the scope of multi-period
            planning

      •     Liquidity risk measurement and management

      •     Preparation, maintenance, and further development of the liquidity risk model

      •     Keeping the management adequately informed of the risk situation

      •     Execution of stress tests

      •     Determination of internal transfer prices for liquidity

      •     Monitoring of transactions with Group-affiliated companies from a liquidity perspective

    •       Development and implementation of a contingency plan for liquidity risks


Under normal conditions, customer deposits serve as ING-DiBa's main refinancing basis. The following
table depicts the Bank's refinancing structure at the last two reporting dates:

Refinancing structure                                                 12/31/2011            12/31/2010
                                                                           in %                  in %
Due to customers                                                             83                    85
  of which variable-interest savings deposits                                60                    63
  of which fixed-interest savings deposits                                   19                    20
  of which deposits in current accounts                                       2                     2
  of which other deposits                                                     2                     0
Other liabilities                                                            12                    10
Equity                                                                        5                     5
Equity and liabilities                                                      100                   100



The table above shows ING-DiBa's refinancing structure. The sum of equity and liabilities is broken down
according to amounts due to customers, other liabilities, and equity. In addition to traditional variable and
fixed-interest savings deposits, the portfolio of amounts due to customers includes customer deposits to
current accounts and other deposits from institutional customers and recorded an increase of over EUR 8.6
billion in the reporting period. At 83 percent (previous year: 85 percent), the ratio of amounts due to cus-
tomers to total equity and liabilities was at a similarly high level as on December 31, 2010. In addition to
Pfandbrief issues, other liabilities essentially include securitized liabilities in connection with the Pfandbrief
issue and amounts due to banks and have increased slightly compared to December 31, 2010, to 12 percent
(previous year: 10 percent). With a share of 5 percent, equity remains stable at prior-year levels.


ING-DiBa operates its banking business as a fully licensed bank. On this basis, it has direct access to Euro-
pean money and capital markets as well as to the investment and refinancing opportunities offered by the
European Central Bank (ECB).
                                                     F-28




Thus, ING-DiBa has sufficient flexibility at all times for both its daily liquidity management as well as for
liquidity crisis management. In addition to retail customer deposits as the main source of refinancing, ING-
DiBa can also use other alternative refinancing sources:

   •     Money market transactions and repos with other counterparties

   •     Sale or pledge of asset positions (e.g. from the portfolio of highly liquid securities)

   •     Securitization of assets (e.g. securitization of private mortgage loans from ING-DiBa's portfolio)

   •     Use of KfW global loans for lendings related to residential properties

   •     Long-term refinancing on the capital market through Pfandbrief issues


On June 22, 2011, ING-DiBa placed its first mortgage Pfandbrief with a 5-year maturity in the amount of
EUR 500 million on the capital market. Despite the difficult market environment, the order book was over-
subscribed by 100 percent. Investors were convinced by ING-DiBa's creditworthiness as well as the under-
lying cover assets (exclusively granular, retail mortgage loans in Germany), whose top quality was reflected
in the Aaa rating issued by Moody’s rating agency. With the Pfandbrief issue, ING-DiBa succeeded in broad-
ening its refinancing basis. ING-DiBa's long-term liabilities were given a Aa3 rating by Moody's.


Insolvency risk is regularly monitored by the Market & Liquidity Risk Management department using sce-
nario analyses on the basis of a gap calculation based on cash flow and quantified using the presentation
of the liquidity ratio. The refinancing risk can be classified as low due to ING-DiBa's low dependency on the
money and capital markets as a source of refinancing. Market liquidity risk is taken into account as part of
the calculation of risk-bearing capacity.


The funding matrix for the next 12 months is observed within the scenario analyses under various assump-
tions with respect to future development.


In addition to the base scenario, other scenarios are regularly prepared in which unfavorable assumptions
for liquidity development are made. The liquidity gaps are determined and cumulated for the individual
periods subsequent to the calculation of cash flows from assets and the liquidity requirements of liabilities
for each period. In order to assess the development of liquidity, the cumulative liquidity gaps are compared
to the securities and loans against borrower's notes available for sale in the respective periods.


In this context, the liquidity ratio is calculated from the quotient of the portfolio of freely available securi-
ties and cumulative liquidity requirements: A surplus must be guaranteed at all times, in all scenarios and
in all maturities, i.e., the liquidity ratio must be at least 1.0.
                                                   F-29




The development of the liquidity ratio over the course of the last three years is presented in the illustration
below for the observation period of one month. The least favorable of the scenarios observed during the
periodic risk analysis is applied. Despite the worst assumptions, in particular in the form of massive out-
flows of customer deposits, the ratio was always above the limit:




The liquidity ratio showed a decreasing trend in the reporting period. The reason for this was an extraordi-
narily high level of short-term money market positions at the beginning of 2011, which normalized over the
course of the year.


The results of the scenario analyses are presented in monthly meetings of the ALCO and/or the Manage-
ment Board if necessary. The design of the scenarios is further developed and optimized on an ongoing
basis.



Limitation


The Bank sets limits for both the risk of insolvency as well as the risk of financial effects from liquidity
crises. To ensure solvency, limits are placed on maximum liquidity gaps in the simulation analysis maturity
bands. Within the scope of the Risk-Bearing Capacity Concept, limits are set for the liquidity risk in the
form of risk-taking capital in order to limit possible effects in a liquidity crisis.



Liquidity risk reporting


The Market & Liquidity Risk Management department is responsible for reporting on liquidity risks. The
reports are adapted to the significance of the risks, include all important regulatory and/or internally re-
quired contents, and are regularly prepared at daily, weekly, monthly, or quarterly intervals. The reports are
addressed to the entire Management Board of ING-DiBa as well as the members of the corresponding risk
committees, depending on the specific topics addressed. In addition, there is a separate reporting path for
ING Direct N.V. The Supervisory Board is normally informed of the liquidity situation by the Management
Board on a quarterly basis. The regular reports are supplemented by reports on the results of the scenario
analyses and stress tests. The relevant parties are promptly informed in the event of changes in important
parameters of risk calculation or relevant influential factors in the market environment as well as during
crises (ad hoc reporting).
                                                     F-30




Monitoring and management of credit risks


Risk definition


The Bank defines credit risk and/or counterparty default risk as the risk of potential loss of value which can
arise due to changes in creditworthiness or due to illiquidity ranging to the insolvency of a business part-
ner. Counterparty default risk is substantiated as follows:


Creditworthiness and default risks constitute the risk of a loss due to changes in creditworthiness or the
non-repayment of capital loaned to the borrower. This is the traditional credit risk in the retail and com-
mercial banking businesses. In the institutional business, it can be further differentiated as issuer or coun-
terparty credit risk and settlement risk.


Issuer and counterparty credit risk includes potential losses in value resulting from the default of a con-
tractual partner or the deterioration of their credit rating. In association with this, there are risks for unre-
alized gains on executory contracts. This risk is also called the replacement risk. This consists of the addi-
tional expense resulting from the necessity of concluding a new transaction for the lost transaction.


Settlement risk constitutes the risk of a contractual partner not fulfilling their end of a contract after the
Bank has already fulfilled its obligations or, when performance is mutually offset, the compensatory pay-
ment is not made. Settlement risk can be ruled out if the equivalent is acquired in advance with good
value from the contractual partner or is to be acquired in the form of delivery against payment or if there is
sufficient cover.


Country risks are understood as potential losses in value that arise despite the debtor's solvency and
willingness to pay due to overriding government impediments (transfer risk).



Organization


Within the framework of its overall responsibility, the entire Management Board has defined basic loan
policy for all business activities and also established methods and processes for credit risk management
with the corresponding responsibilities and competencies.


The Risk Management department was commissioned by the Management Board with managing credit
risks for ING-DiBa. It was also given the responsibility for the applied methods and models for identifying,
quantifying, and managing the credit risks as well as for the function of reporting and monitoring opera-
tional limits. In addition, Risk Management formulates the basic rules for dealing with credit risk positions,
including specifications for management at the portfolio level, based on the credit risk strategy approved
by the entire Management Board.


The Management Board transferred responsibility for the operational management of credit risks resulting
from Commercial Banking in the ING Bank branch to the Credit Risk Management department, which is
located directly in the branch office. Similarly, the Risk Management department in the Austrian branch is
responsible for the operational management of credit risks.


The functional and hierarchical separation of the business is ensured by the division of responsibilities
according to ING-DiBa's organizational chart.
                                                    F-31




Credit risk strategy


ING-DiBa's credit risk strategy is oriented on the Bank's basic risk strategy of only incurring risk as neces-
sary to achieve the strategic goals. Accordingly, ING-DiBa's loan policy is designed conservatively. Value is
placed on high product quality and a balanced ratio of returns and risk for all loan transactions. In addition,
the Bank practices a strict risk selection and concentrates on creditworthy borrowers.


ING-DiBa's credit risk strategy is based on three pillars:




                                   Credit Risk Strategy


           Retail                       Commercial                    Institutional
       Credit Portfolio                  Banking                     Credit Portfolio

           Mortgages                 Investment Finance          Bonds & Promissory Notes
        Consumer Loans              Working Capital Finance             ABS / MBS
        Current Accounts               Export Finance            Money Market Transactions
                                     Acquisition Finance                Derivatives

       Core Business               Integrated Business              Balance sheet
                                         Segment                 structure & Liquidity

       Customer and                Individual customer               Capital market
      product oriented                   oriented                      oriented

                           Balanced relation of risk and return




In its core segment of Retail Banking, ING-DiBa concentrates on customers with low, calculable risk domi-
ciled in Germany or Austria. With respect to products, the Bank focuses on simple, understandable loan
products. For the most part, this is not risk-relevant business as defined under the Minimum Require-
ments for Risk Management (MaRisk). The focus is on mortgage loans, although the high-volume real es-
tate business forms the exception and is intentionally held at a low level.


The ING Bank branch's Commercial Banking business is focused on individual financing solutions. Accord-
ingly, ING-DiBa's Commercial Banking services also include products in the area of export and specialized
lending, in addition to traditional corporate lending, including payment transactions. The focus lies on
companies with investment grade ratings, in particular on large corporates with sales in excess of EUR 1
billion. In the area of export financing, the loans are guaranteed to a high degree through government
export credit insurance.


The capital market-oriented institutional business includes the management of assets and liabilities and
the Bank's liquidity management. Hence, the guiding principle for the institutional loan business is "secu-
rity and liquidity before returns". ING-DiBa established a restrictive spectrum of permitted counterparties
and transactions in the institutional business based on this goal. For instance, the Bank only enters into
transactions denominated in euros. Investments in shares are explicitly forbidden. In addition, no new
investments have been made in the ABS/MBS asset class for a number of years. New business in this area is
limited to investments in securitizations of Dutch retail mortgage loans granted by ING Bank
N.V. (ING Bank). In light of the sovereign debt crisis in Europe, the Bank intentionally avoids exposures in
critical countries and has reduced existing exposures.
                                                         F-32




Operational risk management and risk controlling


ING-DiBa has implemented various management elements at all levels of credit risk management in order
to manage and monitor credit risks. All building blocks of credit risk management represent important
measures for implementing the Bank's loan policy.

                           Control elements of the Bank's credit risk strategy
                                  Credit risk                 Credit risk
    Credit risk policy                                                              Credit risk controlling
                                 measurement                 management
▪ Strategic                 ▪ IRBA models               ▪ Credit policy            ▪ Limit review
   guidelines               ▪ EL & risk costs           ▪ Processes                ▪ Reporting
▪ Product policies            (PBIA & SIA)              ▪ Resources
▪ Risk appetite             ▪ UL, RWA                   ▪ Monitoring/
  & scoring                                               early identification

                                                        ▪ Portfolio management


EL: Expected loss; UL: Unexpected loss; SIA: Specific impairment allowance; PBIA: portfolio-based impairment allowance;
RWA: Risk weighted assets

            policy
Credit risk po licy


The Bank's product policy emphasizes a high quality of products and services for its customers in accor-
dance with ING-DiBa's general strategic orientation and the guidelines for the loan business defined in the
credit risk strategy.


According to this principle, product policy in the retail business is geared toward simple, easily understood
products that facilitate standardized, scalable processes. For mortgage loans, lending is focused on financ-
ing owner-occupied residential units. Other retail lending business includes consumer loans, in particular
installment loans and lines of credit in the form of revolving credit and overdraft lines of credit on current
accounts.


In order to offer Commercial Banking customers a high degree of service and product quality, product
policy in the Commercial Banking segment is oriented on comprehensive and individual financing solu-
tions. ING-DiBa strives to win long-term customer loyalty by means of a "multi-product" customer rela-
tionship.


The catalog of authorized products is set up conservatively in the institutional business and is concen-
trated on transparent, plain-vanilla products without share price or foreign currency risks. The focus – also
with respect to Basel III – lies clearly on government or covered investments.


Based on the risk-averse orientation of the Bank, the defined willingness to assume risk (risk appetite) is
further substantiated in the specific lending criteria and criteria for setting limits, as well as the approval
and authority structures.


Credit
Credit risk measurement


ING-DiBa uses the advanced IRB approach (IRBA model according to Basel II / Solvency Regulation (Solva-
bilitätsverordnung, “SolvV”)) for risk measurement and assessment. This approach complies with the me-
                                                    F-33




thodical and procedural/organizational requirements of the banking authorities (BaFin). In addition to
supporting the loan decision process, the rating results also serve in particular the calculation of expected
and unexpected losses of the Bank's positions exposed to counterparty default risk.


The internal rating models in the retail business were developed in coordination with the Group parent
company ING. In the commercial banking and institutional business, ING-DiBa uses global IRBA models
that were modeled centrally by ING for Group-wide implementation. Within the scope of monitoring the
ratings system, Risk Management routinely reviews, among other things, the forecast quality, accuracy and
stability of the models, and ensures their functionality and proper application. In addition, the models are
reviewed on an annual basis independently of ING's Group-wide model validation unit. In this way, poten-
tial changes in the loss history with effects on the functionality of the ratings system can be identified early
and adjusted if needed within the scope of the applicable model governance guideline. The Bank's Man-
agement Board receives regular information on the functionality of the IRBA models as well as on the re-
sults of the ratings performed as part of the management reporting process.



Credit risk management


Policies and processes: Credit policies substantiate the specifications for entering into credit risk posi-
tions defined in the Bank's credit risk strategy and regulate all important operational management meas-
ures and loan processes. Credit approvals are provided according to an established system of authorities,
which act as a framework within which decision-making individuals or bodies are authorized to approve
lending transactions.


The adequate segregation of functions between the Front Office, Back Office and Risk Monitoring in accor-
dance with regulatory requirements (KWG, MaRisk) is essential for loan approval. The majority of ING-
DiBa’s standardized retail business is not risk-relevant. For real estate loans in the retail business classified
as risk-relevant (equal to or in excess of EUR 1.5 million), the loan decision-making authority lies with ING-
DiBa's entire Management Board. The Bank has established an authority matrix for decision-making powers
in the commercial banking lending business based on the riskiness of the transactions. Approval in the
institutional business is granted within the scope of the limit system established by the entire Manage-
ment Board.


The strategic principle of efficient processes is taken into account in the entire lending process. The Bank
has largely standardized its lending processes in the retail business. Credit approval, processing and proc-
ess control are heavily automated by integrating the appropriate application controls and approval au-
thorities in the corresponding IT systems.


Monitoring the risk profile and early risk identification: In order to identify changes in the risk struc-
tures early in the individual portfolios, the Bank regularly conducts loan portfolio analyses and stress test
scenarios. These are based on, among other things, advanced IRBA models to determine value at risk or the
expected and unexpected losses for portfolios subject to counterparty default risk.


The efficient management of the risk profile in commercial banking and in the institutional loan business is
also carried out through the approval processes. These are embedded in the Group-wide Credit Risk Man-
agement department of ING Bank and include both the comprehensive credit assessment of each cus-
tomer as well as an estimate of the suitability of the planned transaction volume. Industry, market, and
rating changes are also observed on an ongoing basis. The standard measures for early risk identification
also include the monitoring of late interest and capital payments. Conspicuous customers with elevated
risk are closely monitored on the watch lists for the commercial banking and institutional business.
                                                    F-34




In addition, the development of the credit spreads is monitored in the institutional business as an en-
hanced measure for risk monitoring. Stress tests are also carried out periodically for the entire ABS/MBS
portfolio in order to obtain early indications of any existing requirement to set aside loan loss provisions.


Collateral management: ING-DiBa places strict requirements on the quality of collateral taken on deposit.
For instance, mortgage loans are always secured by means of an enforceable, senior, registered land charge
on the property to be financed. Property accepted as collateral must be domestic and used mostly for
residential purposes. The valuation for all mortgage loans is based on a conservative approach.


The Bank follows the fair value fluctuation concept developed by the German banking industry for residen-
tial units of the Bundesverband deutscher Banken e.V., Berlin, (Association of German Banks). The fair value
fluctuation concept has been recognized by BaFin and the Deutsche Bundesbank as a statistical method
under the German Banking Act (Kreditwesengesetz, "KWG"). The Bank uses this method to ensure that sig-
nificant house price fluctuations are identified during the annual analysis. In addition, ING-DiBa carries out
an annual update of the valuation for properties in the credit risk-relevant real estate loan business. The
relevant real estate markets are also periodically analyzed.


For other retail loans (installment loans, credit lines and overdraft facilities on current accounts), the loan
application already includes the assignment of wage and salary claims. This assignment is not disclosed to
the borrower's employer until expiration of the deadline set in the letter of termination at the earliest.


The Bank strives to obtain cover in the commercial banking business through collateral, in particular guar-
antees. Economic and political risk within the scope of structured export financing is covered by govern-
ment export credit insurance.


The majority of investments in the institutional loan portfolio are covered investments (covered bonds,
securities with government guarantees). Generally, pre-settlement transactions (repo and swap transac-
tions) may only be entered into if there is a collateral agreement. In the case of swap transactions with a
collateral agreement, collateral must be provided in cash in euros; in the case of reverse-repo transactions,
only high-quality securities are accepted.


Credit monitoring and problem loan procedures: ING-DiBa monitors all risk-relevant loan exposures at
least annually as part of a comprehensive analysis of a borrower’s economic situation and conducts addi-
tional ad-hoc analyses as deemed necessary.


Prior to the date on which the lending commitment is terminated, intensified management of retail loans
in arrears is the responsibility of the teams specialized in dunning procedures within the mortgage loan
and other retail loans product areas. After termination of the exposure, the Collection desk of the Risk
Management department takes over responsibility for the market sale, foreclosure sale and collection.


If payment interruptions, negative market developments, or negative industry trends occur in the commer-
cial banking or institutional business, or information is obtained about a borrower's financial difficulties,
the affected loan exposure is placed on a watch list and closely monitored. Prompt and meaningful report-
ing to all decision-makers, including the Management Board, is a crucial component of intensified monitor-
ing on the part of the responsible Risk Management department. This ensures that corresponding meas-
ures to limit the risk are taken in a timely manner.


Portfolio management: ING-DiBa's goal is to avoid inappropriate concentrations, thereby ensuring an
adequate capital situation for the Bank at all times. Specific loan granting and product design criteria and
approval processes serve as management instruments. A differentiated limit system also contributes to
sustaining the defined risk profile both on the level of the individual borrower as well as at the portfolio
                                                    F-35




level. In addition, efficient portfolio management is ensured through periodic monitoring of the risk struc-
tures and potential concentrations in the individual loan portfolios both in new as well as existing busi-
ness.


In order to minimize country risks, ING-DiBa has implemented a country limit system through which all
risks associated with international transactions are managed and monitored comprehensively. In order to
ensure a low-risk structure of the institutional portfolio, additional country restrictions apply for the insti-
tutional business.



Credit risk controlling


Limit review: ING-DiBa has set up corresponding lines in the limit systems for all approved loans taking
the respective term to maturity into account. Compliance with the extended credit lines is monitored daily.
In addition, the specific limits at the product or product group level as well as at the country level are
periodically subjected to monitoring.


Reporting: The overview of current changes in the risk structure of the loan portfolios and the results of
detailed risk analyses are a part of the periodic reporting to the Management Board and/or the responsible
committees of ING-DiBa and ING. In addition, the Management Board and managers of the relevant divi-
sions receive information on the development of risk structures of the loan portfolios on a monthly basis
as well as when otherwise deemed necessary. Reports to the decision-makers also include measures and
recommendations for dealing with credit risks.


The monthly credit risk reporting is supplemented with the quarterly credit risk report in accordance with
MaRisk provided to the overall Management Board and the credit committee of the Supervisory Board.



Loan portfolio


Unless otherwise noted, all quantitative data referenced below in the risk report is based on nominal val-
ues in the same way as ING-DiBa's management reporting.


Please refer to the section entitled "Additional disclosures under IFRS 7" regarding the reconciliation of the
nominal values to the carrying amounts.



Structural risk profile


The focus in the core Retail Banking segment lies in particular on the mortgage business. Mortgage loans
are available with interest rate commitment periods of five, ten, and fifteen years. Only property serving as
capital that is exclusively used for residential purposes in Germany can be financed. The mortgage loans are
focused on the standardized retail business with a total commitment of up to EUR 1.5 million. This ensures
a high granularity within the mortgage portfolio. The Bank offers consumer loans as additional retail loan
products in the form of installment and special-rate loans as well as lines of credit (revolving credit lines).
In addition, the Bank's range of products in the retail lending business also includes overdraft facilities on
current accounts.


In 2011, new business for mortgage loans was once again favorable. The committed volume was around
EUR 8.4 billion (previous year: EUR 8.0 billion). Overall, the risk profile of new business remained at the
                                                    F-36




previous year's very positive level. ING-DiBa's existing mortgage portfolio also showed a high degree of
stability without structural changes in the risk profile over the course of the year.


Demand for ING-DiBa's consumer loans remained high over the course of the year, supported by a friendly
consumer climate. The newly committed loan volume rose year-on-year by 38 percent and was around EUR
1.1 billion at the end of the year (previous year: EUR 0.8 billion). In the area of current accounts, 2011 was
also characterized by greater demand.


The loan business in the Commercial Banking segment mostly encompasses the financing and provision of
tailored financing solutions for reputable German corporate customers and their foreign and domestic
subsidiaries. The focus lies in particular on large corporates with sound creditworthiness. In addition to
traditional loan products for the financing of investments and working capital, the product range also
includes the hedging of customers' payment risks in transactions with selected foreign banks. Individual
credit solutions in the area of long-term export financing form another point of focus, whereby ING-DiBa
strives for the most effective coverage of the financing package possible through government export credit
insurance in order to cover the associated economic and political risks.


The new business in the Commercial Banking segment concentrated on customers with investment grade
ratings in accordance with the selective approach of entering into loan transactions.


ING-DiBa's investment policy in the institutional business strives primarily for security and liquidity. Pursu-
ing this objective, the Bank is restrictive when establishing the spectrum of permissible transactions and
the credit criteria for counterparties, issuers or issues and does not enter into any trading book positions.
The investment focus lies on interest-bearing bonds of German development banks as well as in collateral-
ized (i.e., covered) bonds. In light of the persistent turbulence on the international financial markets, the
Bank consciously decided in the fiscal year to make greater use of the attractive investment opportunities
within the Group within the scope of asset/liability management. Intra-Group investments primarily con-
sist of fully collateralized RMBS securitizations of ING Bank, selected based on top-rated asset pools. The
sound risk profile is reflected in a Aaa rating. This decision was made against the background of high qual-
ity assets and regular access to data (including at the level of the individual accounts), which enable ING-
DiBa to form a comprehensive view of the quality of the investments on a regular basis. Geographically, the
institutional business focuses on selected countries of the European Union, with Germany at 36.8 percent
(previous year: 43.8 percent) and the Netherlands at 26.1 percent (previous year: 11.2 percent) comprising
the main share. In light of the debt crisis in Europe, ING-DiBa is careful to avoid exposures in critical coun-
tries and to systematically reduce existing exposures. Direct exposure to Greece, Spain, Italy, and Hungary,
including municipalities in these countries, was reduced in nominal terms by 62 percent to less than EUR
0.6 billion. There are no corresponding exposures in Portugal or Ireland.


In addition to the repo business with selected financial institutions, ING-DiBa is active on the money mar-
ket providing short-term lendings to German municipalities and municipal enterprises.


In order to ensure that the investment portfolio has a low-risk structure, the product catalog for the insti-
tutional business does not provide for any investments in shares or credit derivatives. Derivative financial
instruments are used primarily to manage duration. New lines for counterparties and/or issues are only
granted if they have a rating of at least A3/A-/A-(Moody’s, Standard & Poor’s, Fitch). The lowest of all avail-
able ratings applies. The entire institutional portfolio exhibits a very positive risk structure with around 82
percent comprising AAA/AA-rated exposures as of the end of the year (previous year: 71 percent).

Industry structure of the loan portfolio


The overviews below present the composition of the loan portfolio broken down by sectors. The presenta-
tion in all tables of the risk report is based on nominal values unless otherwise indicated and includes
                                                                   F-37




contingent liabilities entered into in the Commercial Banking segment. The disclosures for the retail busi-
ness are based on the main loan business (mortgage loans, installment loans, line of credit, current ac-
counts) in Germany. Since the Austrian branch's only retail loan product is selectively offered installment
loans, the lending business of the Austrian branch is classified as irrelevant. The Austria branch's install-
ment loan portfolio comprised EUR 83.1 million in receivables as of December 31, 2011 (previous year: EUR
70.7 million). In addition, ING-DiBa has a gradually decreasing amount of legacy mortgage loans to legal
entities amounting to EUR 14.2 million at the end of 2011 (previous year: EUR 16.6 million). Given the inac-
tive business operations of this segment and the immateriality, this portfolio is not at the center of focus
of management decisions, and is not classified as risk-relevant.

Distribution of the overall portfolio according to sector (distribution based on percent)


%                                 2011       2010       2011       2010      2011    2010      2011       2010
Retail Customers                 100.0        100        0.0          0       0.0      0       58.4        59.9
Pfandbriefe/Covered
             (1)                     0          0        32.7       33.9        0      0        12.5       13.6
Securities
Governments/
                                     0          0        32.4       35.1        0      0        12.4       14.1
Local Authorities
Banks/Financial Institutions
                                     0          0         1.3        1.8        0      0         0.5        0.7
(unsecured)
          (2)
ABS/MBS                              0          0        25.6        10         0      0        9.8         4.0
Repos                                0          0         4.4       11.4        0      0         1.7        4.6
Corporate Lending                    0          0          0          0       56.4     0         1.9         0
Structured Finance                   0          0          0          0      36.6      0         1.2         0
Intercompany (ING)                   0          0         3.6        7.8        7                1.6        3.1
Total                              100      100.0        100      100.0       100     0.0       100      100.0




Distribution of the overall portfolio according to sector (nominal values)
                                                                   values)


                                  2011       2010       2011       2010      2011    2010      2011       2010
Retail Customers               59,393.1   53,870.3       0.0         0.0      0.0     0.0   59,393.1   53,870.3
Pfandbriefe/Covered
             (1)                   0.0        0.0    12,763.6   12,212.9      0.0     0.0   12,763.6   12,212.9
Securities
Governments/
                                   0.0        0.0    12,639.7   12,651.9      0.0     0.0   12,639.7   12,651.9
Local Authorities
Banks/Financial Institutions
                                   0.0        0.0      495.0       647.0      0.0     0.0     495.0       647.0
(unsecured)
          (2)
ABS/MBS                            0.0        0.0    10,012.2    3,619.9      0.0     0.0   10,012.2    3,619.9
Repos                              0.0        0.0     1,701.8    4,108.5      0.0     0.0    1,701.8    4,108.5
Corporate Lending                  0.0        0.0        0.0         0.0   1,896.3    0.0    1,896.3        0.0
Structured Finance                 0.0        0.0        0.0         0.0   1,233.2    0.0    1,233.2        0.0
Intercompany (ING)                 0.0        0.0     1,409.2    2,798.8    234.3     0.0    1,643.5    2,798.8
Total                          59,393.1   53,870.3   39,021.6   36,039.0   3,363.8    0.0 101,778.5    89,909.3


(1) Covered securities include covered bonds such as Pfandbriefe, cédulas, etc., as well as securities covered by government
guarantees.
(2) ABS/MBS also include intra-Group securitizations in the amount of EUR 8.0 billion.
                                                          F-38




                         loan
Regional division of the loan portfolio


The Bank is exposed to country risks as part of its investment business on the money and capital markets
as well as through the ING Bank branch's business activities. The retail lending business is not exposed to
country risk, since according to the strategic focus, loans are only granted to borrowers residing in Ger-
many. The regional distribution of ING-DiBa's loan portfolio is as follows:

Risk concentration by geographic area 1


                                                           2011            2011            2010            2010
                                                            €m               %              €m               %

    m
G er any                                                  254.
                                                        75,  1             73.
                                                                             9           6714
                                                                                       69, .                 5
                                                                                                           77.
EM U                                                      ,  9
                                                        21092.             20.
                                                                             7          7,  4
                                                                                       1 502.               9.
                                                                                                           1 5

   her
O t EU                                                    41 7
                                                         2, 0.              2.
                                                                             4            ,  0
                                                                                         1893.               1
                                                                                                            2.

N on-EU                                                  020.
                                                        3,  8               3.
                                                                             0               5
                                                                                          842.               9
                                                                                                            0.

Total                                                   01778.
                                                       1 ,   5            1 0
                                                                           00.         89,909.3           100.0



(1) Presentation based on nominal values, including contingent liabilities entered into in the Commercial Banking segment.


A total of 73.9 percent of the loan portfolio can be attributed to exposures in the domestic market Ger-
many (previous year: 77.5 percent). An additional 20.7 percent of the overall loan portfolio comprises re-
ceivables from debtors within the Economic and Monetary Union of the European Union (EMU) as of the
end of 2011 (previous year: 19.5 percent). Receivables from borrowers in the Netherlands make up the larg-
est share of this loan portfolio at 10.1 percent (previous year: 4.5 percent). Exposures in the so-called Euro-
pean periphery countries, including Hungary, constitute 4.3 percent of the loan portfolio as of December
31, 2011 (previous year: 7.5 percent). The Bank's exposure in Spain was reduced over the course of 2011 from
EUR 4.7 billion to EUR 3.4 billion as of December 31, 2011, and consists mainly of covered securities in the
amount of EUR 2.4 billion (previous year: EUR 3.4 billion) and securitizations in the amount of EUR 0.8
billion (previous year: EUR 0.9 billion) as of the last day of the year. The total volume was also reduced
significantly in Italy from EUR 1.5 billion to EUR 0.5 billion. The total exposure in the remaining periphery
countries Greece, Ireland, Portugal, and Hungary decreased by EUR 37 million to less than EUR 0.5 billion or
0.5 percent of the loan portfolio compared to the previous year (previous year: 0.6 percent).


Developments in the countries impacted by the debt crisis are very closely monitored and are reported to
the Management Board and risk committees on an ongoing basis. The Bank also established special coun-
try limits to limit risk in these countries.


The increase in exposures in countries outside the European Union results from the integration of the
Commercial Banking segment. These exposures are mainly transactions in the area of structured export
finance that are covered by government export credit insurance (e.g. Hermes coverage).

Credit quality structure of the loan portfolio


For purposes of risk management, the Bank routinely relies on the internal rating used for the capital ade-
quacy requirement. This is based on the issuer rather than the issue rating. Only in the institutional lending
business in the area of ABS/MBS investments is the internal rating derived from the external issue rating of
the tranche.


Within the ING Group, all internal ratings are depicted on a uniform master scale that assigns every ratings
result a risk class or a certain probability of default. The rating classes of 1 to 22 are based on the classifica-
tion by the rating agency Standard & Poor’s, whereby the exposures of the risk classes 1 to 7 are to be re-
                                                                F-39




garded as exposures with low risk. The risk classes 8 to 13 are categorized as intermediate risk; risk is high
starting with risk class 14.


The distributions of the credit risk-bearing portfolios over the individual risk classes of the ING master
scale provide information about the credit quality structure and thus about the credit quality of the overall
portfolio and show ING-DiBa's conservative orientation across all business segments.



Credit quality of financial instruments in the retail business that are neither delinquent nor impaired 1
                                                                                               im


                                           t
                                       M or gage Loans                her  ai
                                                                   O t R et lLoans                       Total


€m                                         2011          2010            2011           2010         2011           2010

      sk
Low R i                                 3,  0
                                       1 850.         4,25.
                                                     1 1 3              349.
                                                                           4              0
                                                                                        73.        4,99.
                                                                                                  1 1 4            4,98.
                                                                                                                  1 1 3

    um  sk
M edi R i                             40,
                                        632.
                                           5           459.
                                                     35,  2            2,
                                                                        496.
                                                                           0           427.
                                                                                      2,  2         1 5
                                                                                                  43,28.           886.
                                                                                                                 37,  4

 gh sk
Hi Ri                                       4
                                         860.             8
                                                       996.             242.
                                                                           4            33.
                                                                                       1 2          ,02.
                                                                                                   11 8             ,30.
                                                                                                                   11 0

Total                                   342.
                                      55,  9           5813
                                                     50, .             3,
                                                                        087.
                                                                           8           633.
                                                                                      2,  4        430.
                                                                                                 58,  7            21 7
                                                                                                                 53, 4.




(1) Rating distribution based on internal credit risk classification in terms of the default probability without taking into ac-
count any collateral




Credit quality of financial instruments in the institutional business that are neither delinquent nor impaired 1, 2
                                                                                                      im


                                         Uncovered                       C overed
                                                                                                       M
                                                                                                 A B S/ B S
                                              ii
                                         Securtes                             ii
                                                                        Securtes

€m                                         2011          2010            2011        2010         2011           2010

      sk
Low R i                                  191 7
                                        1 , 9.       1 435.
                                                      5,  3         0,
                                                                   1 364.
                                                                        6        736.
                                                                                5,  9           972.
                                                                                               9,  8           61 9
                                                                                                              3, 9.
    um  sk
M edi R i                                    9
                                          448.             7.
                                                         91 0          2,
                                                                        399.
                                                                           0         71 0
                                                                                    2, 2.          4
                                                                                                 39.               0
                                                                                                                  0.

 gh sk
Hi Ri                                        0
                                            0.             0
                                                         30.              0.
                                                                           0           0
                                                                                      0.           0
                                                                                                  0.               0
                                                                                                                  0.

Total                                   2,  6
                                       1 368.         6,  3
                                                     1 382.        1 763.
                                                                    2,  6        448.
                                                                                8,  9           0, 2.
                                                                                               1 01 2          61 9
                                                                                                              3, 9.



                                                                     t t m endi t
                                                                 Shor - er l   ng o
                                       R epos/    ng
                                              Lendi                                                Total
                                                                         ci ii
                                                                    m uni paltes

€m                                         2011          2010            2011        2010         2011           2010

      sk
Low R i                                   ,
                                         1707.
                                             8         1 5
                                                      4,29.             ,
                                                                       1334.
                                                                           4     428.
                                                                                2,  4          35,
                                                                                                 299.
                                                                                                    3           ,  0
                                                                                                              31350.

    um  sk
M edi R i                                    0
                                          655.         ,  0
                                                      1030.               0.
                                                                           0           0
                                                                                      0.        542.
                                                                                               3,  3           659.
                                                                                                              4,  0

 gh sk
Hi Ri                                        0
                                            0.             0
                                                          0.              0.
                                                                           0           0
                                                                                      0.           0
                                                                                                  0.               0
                                                                                                                 30.

Total                                   2,
                                         362.
                                            8          1 5
                                                      5,59.             ,
                                                                       1334.
                                                                           4     428.
                                                                                2,  4            8416
                                                                                               38, .          039.
                                                                                                            36,  0




(1) Rating distribution based on internal credit risk classification in terms of the default probability without taking into ac-
count any collateral
(2) Covered securities include covered bonds such as Pfandbriefe, cédulas, etc., as well as securities covered by government
guarantees.
                                                               F-40




                                               Commercial                                                 im-
Credit quality of financial instruments in the Commercial Banking segment that are neither delinquent nor im-
paired 1, 2, 3


                                          por e   ng
                                      C or at Lendi                r ur     nance
                                                                 St uct ed Fi                   Total


€m                                         2011         2010           2011     2010           2011        2010

      sk
Low R i                                      5
                                          390.            0
                                                         0.             0.
                                                                         6         0
                                                                                  0.             .
                                                                                              3911            0
                                                                                                             0.
    um  sk
M edi R i                                ,  3
                                        1643.             0
                                                         0.           121 1
                                                                       , 3.        0
                                                                                  0.         856.
                                                                                            2,  4             0
                                                                                                             0.

 gh sk
Hi Ri                                        .
                                           916            0
                                                         0.             1.
                                                                         19        0
                                                                                  0.           03.
                                                                                              1 5             0
                                                                                                             0.

Total                                    1 4
                                        2,25.             0
                                                         0.           1225.
                                                                       ,  6        0
                                                                                  0.         3510
                                                                                            3, .              0
                                                                                                             0.




(1) Rating distribution based on internal credit risk classification in terms of the default probability without taking into ac-
count any collateral
(2) Presentation based on nominal values, including contingent liabilities entered into in the Commercial Banking segment.
(3) Corporate lending also includes receivables from companies of the ING Group.



Securitization


With its ABS/MBS portfolio for the core business Retail Banking, the Bank holds comparable assets from
other markets in order to further diversify the investment portfolio (credit substitution business). As of
December 31, 2011, the share of the ABS/MBS portfolio was 10 percent of the overall loan portfolio and
26 percent of the institutional loan portfolio. The very conservative orientation in this segment is reflected
in the large share of AAA/AA-rated investments of around 97 percent. Overall, investments in RMBS have
the highest share (around 94 percent); in addition, the Bank holds partially government guaranteed posi-
tions in ABS consumer loans (without credit card receivables) and auto ABS. The ABS/MBS portfolio only
includes one CMBS investment whose share of 0.08 percent of the ABS/ MBS portfolio is immaterial.


The volume of the securitization portfolio increased significantly in 2011 compared to the previous year and
amounted to around EUR 10 billion on the last day of the year (previous year: EUR 3.6 billion), boosted by
intra-Group investments in the amount of EUR 8.0 billion in the form of top-rated, fully collateralized
RMBS. Excluding intra-Group investments, the ABS/MBS portfolio decreased by 24.3 percent over the
course of the year.
                                                          F-41




Securitization portfolio broken down by rating


                                          ABS                        M BS                Total

€m                                      2011       2010            2011       2010     2011        2010

      sk
Low R i                                   1
                                       552.          .
                                                  7310           9,
                                                                  420.
                                                                     7       888.
                                                                            2,  9     972.
                                                                                     9,  8         61 8
                                                                                                  3, 9.

    um  sk
M edi R i                                 0
                                         0.          0
                                                    0.             39.
                                                                     4          0
                                                                               0.        4
                                                                                       39.           0
                                                                                                    0.

 gh sk
Hi Ri                                     0
                                         0.          0
                                                    0.              0.
                                                                     0          0
                                                                               0.        0
                                                                                        0.           0
                                                                                                    0.

Total                                     1
                                       552.          .
                                                  7310           9,
                                                                  460.
                                                                     1       888.
                                                                            2,  9     0, 2.
                                                                                     1 01 2        61 9
                                                                                                  3, 9.



                                          ABS                        M BS                Total

%                                       2011       2010            2011       2010     2011        2010

      sk
Low R i                                   5
                                         5.          2
                                                   20.             94.
                                                                     1          8
                                                                              79.        6
                                                                                       99.          00.
                                                                                                   1 0

    um  sk
M edi R i                                 0
                                         0.          0
                                                    0.              0.
                                                                     4          0
                                                                               0.        4
                                                                                        0.           0
                                                                                                    0.

 gh sk
Hi Ri                                     0
                                         0.          0
                                                    0.              0.
                                                                     0          0
                                                                               0.        0
                                                                                        0.           0
                                                                                                    0.

Total                                     5
                                         5.          2
                                                   20.             94.
                                                                     5          8
                                                                              79.      00.
                                                                                      1 0           00.
                                                                                                   1 0




                         by
Securitization portfolio b y country


At around 94 percent, the geographical focus of the securitization portfolio lies on European issues (previ-
ous year: 82 percent). Considering the intra-Group Investments, the Netherlands represents the largest
share at around 80 percent, (previous year: 28 percent). The Bank was able to actively further reduce the
share of ABS/MBS investments in the periphery countries over the course of the year.

                                         ABS                        M BS                  Total
€m                                      2011     2010             2011       2010       2011         2010

    m
G er any                                 0
                                        0.          .
                                                  218              0.
                                                                    0           0
                                                                               0.         0
                                                                                         0.            .
                                                                                                     218

EM U                                     6
                                       92.          2
                                                 235.             1 4.
                                                                 9,1 2      2,
                                                                             364.
                                                                                3     206.
                                                                                     9,  8          599.
                                                                                                   2,  5

   her
O t EU                                   2
                                        4.         7
                                                  5.              21 9
                                                                    7.          4
                                                                             345.         1
                                                                                       222.             .
                                                                                                     3511

N on-EU                                   3
                                       455.         3
                                                 468.             1 0
                                                                   28.        79.
                                                                             1 2          3
                                                                                       583.            5
                                                                                                    647.

Total                                     1
                                       552.         .
                                                 7310            9,
                                                                  460.
                                                                     1       888.
                                                                            2,  9     0, 2.
                                                                                     1 01 2         61 9
                                                                                                   3, 9.



                                         ABS                        M BS                  Total

%                                       2011     2010             2011       2010       2011         2010

    m
G er any                                 0
                                        0.         0
                                                  3.               0.
                                                                    0           0
                                                                               0.         0
                                                                                         0.            6
                                                                                                      0.

EM U                                     6.
                                        1 8        2
                                                 32.              96.
                                                                    3           .
                                                                              818         0
                                                                                        92.            .
                                                                                                     718

   her
O t EU                                   8
                                        0.         8
                                                  0.               2.
                                                                    3          2.
                                                                              1 0         2
                                                                                         2.            7
                                                                                                      9.

N on-EU                                  4
                                       82.         0
                                                 64.               14
                                                                    .           2
                                                                               6.         8
                                                                                         5.           7.
                                                                                                     1 9

Total                                   00.
                                       1 0        00.
                                                 1 0              1 0
                                                                   00.        00.
                                                                             1 0        00.
                                                                                       1 0           00.
                                                                                                    1 0




In 2008, the Bank issued a RMBS securitization for which it also acted as investor. Accordingly, the transac-
tion is not included in the securitization portfolio. This was a securitization of private mortgages from the
ING-DiBa portfolio with a volume of EUR 4.7 billion. The securities issued by the special purpose entity
were repurchased in full. This transaction was intentionally executed in this form in order to meet the goal
                                                             F-42




of an additional liquidity buffer of ECB-eligible securities. A potential risk transfer is not the focus of this
transaction.



Delinquent loan volume and problem loans


ING-DiBa monitors the overall loan portfolio regularly with regard to delinquencies and arrears. An obliga-
tion is generally defined as "delinquent" if the agreed interest and capital repayment is more than one day
overdue. If this is the case, the regular dunning process is initiated. In the event of delinquencies of over 90
days, the loans are considered defaulted in terms of the requirements of Basel II/SolvV. The regulatory
definition of default serves to distinguish the current portfolio from the default portfolio. Exposures that
meet the SolvV criteria for unlikeliness to pay are also considered defaulted. The Bank defines defaulted
exposures with a receivable volume of more than EUR 1 million as problem loans.


The tables below show the credit quality of the outstanding receivables as of the indicated reporting date
with their nominal values, including contingent liabilities entered into in the Commercial Banking segment.



Credit quality outstanding loans 1


                                            t
                                        M or gage                        Other                    Tot al
                                          Loans                          ai
                                                                     R et lLoans                 ai    t olo
                                                                                             R et lP or f i

€m                                      2011          2010            2011           2010       2011           2010

   t     i         m   r
N eiherdelnquentnori paied           55,
                                       342.
                                          9           1 3
                                                    50,36.          3,
                                                                     087.
                                                                        8            61 2
                                                                                    2, 2.   58,
                                                                                              430.
                                                                                                 7          748.
                                                                                                          52,  5


   i            m   r
D elnquentbutnoti paied                   1
                                       258.              0
                                                      445.            22.
                                                                        1               .
                                                                                      212        2
                                                                                              280.                2
                                                                                                               466.

m   r
I paied                                   7
                                       568.              .
                                                      5416            1 3.
                                                                       1 5            1 0
                                                                                     1 4.        2
                                                                                              682.                6
                                                                                                               655.

Total                                  1 7
                                     56,69.         511 9
                                                      ,22.           223.
                                                                    3,  4          2,
                                                                                    747.
                                                                                       4      393.
                                                                                            59,  1          870.
                                                                                                          53,  3




                                       nstt i
                                       I iutonal                              ci
                                                                     C om m er al
                                                                                                 Total
                                            t olo
                                        P or f i                       B anking

€m                                      2011          2010            2011           2010       2011           2010

   t     i         m   r
N eiherdelnquentnori paied           38, .
                                       8416           039.
                                                    36,  0          3, .
                                                                     3510              0
                                                                                      0.     00, 3
                                                                                            1 623.          787.
                                                                                                          88,  5


    i           m   r
D elnquentbutnoti paied                   0
                                         0.             0
                                                       0.              0.
                                                                        0              0
                                                                                      0.         2
                                                                                              280.                2
                                                                                                               466.

m   r
I paied                                 80.
                                       1 0              0
                                                       0.             1 8
                                                                       2.              0
                                                                                      0.         0
                                                                                              875.                6
                                                                                                               655.

Total                                  0216
                                     39, .            039.
                                                    36,  0          3,
                                                                     363.
                                                                        8              0
                                                                                      0.     01778.
                                                                                            1 ,   5         909.
                                                                                                          89,  3




(1) The impaired exposures shown are presented in nominal values.




The Bank recognized a portfolio-based impairment allowance for all receivables that are neither delinquent
nor impaired or delinquent but not impaired.


Impairment allowances were recognized in the amount of EUR 274.7 million in 2011 (previous year: EUR
250.1 million) for mortgage loans presented as impaired in the amount of EUR 568.7 million (previous year:
EUR 541.6 million). The loan loss provision for the remaining retail loans classified as impaired in the
amount of EUR 113.5 million (previous year: EUR 114.0 million) amounts to EUR 90.3 million (previous year:
                                                             F-43




EUR 91.4 million). As in the previous year, there were no problem loans in the retail lending business in
2011.


The commercial banking loan portfolio includes receivables and contingent liabilities in the amount of EUR
3.4 billion that are neither delinquent nor impaired as of the last day of 2011. There are no delinquent re-
ceivables that are not impaired. The impaired exposures in the commercial banking loan portfolio in the
amount of EUR 12.8 million are partially collateralized receivables for whose risk share ING-DiBa has recog-
nized specific impairment allowances of EUR 5.4 million. A loan loss reserve was recognized in the form of
provisions for risks arising from contingent liabilities.


The current institutional loan portfolio comprises EUR 38.8 billion as of December 31, 2011 (previous
year: EUR 36.0 billion). As in the previous year, there are no delinquent loans that are not impaired in the
institutional lending business as of the last day of 2011.


Against the background of participation on the part of private investors in the restructuring of Greece's
debt, ING-DiBa recognized an impairment allowance of EUR 0.14 billion as of December 31, 2011, on its
investment in Greek government bonds in the nominal amount of EUR 0.18 billion. This corresponds to a
write-down to the fair value of the securities as of December 31, 2011. ING-DiBa does currently not see any
further need for impairment allowances in the institutional loan portfolio.



Aging analysis (delinquent but not impaired): Outstanding receivables1


                                             t
                                         M or gage                      Other
                                                                                                 Total
                                           Loans                        ai
                                                                    R et lLoans

€m                                       2011         2010           2011         2010         2011         2010

   i       -
D elnquent1 29 days                        .
                                         216            7
                                                      58.             4.
                                                                       8            1
                                                                                   9.            4
                                                                                               26.            8
                                                                                                            67.

   i         59
D elnquent30- days                       86.
                                        1 3              .
                                                      3218           1 3
                                                                      4.            6
                                                                                   9.            6
                                                                                              200.            .
                                                                                                           3314

   i         89
D elnquent60- days                         2
                                         50.            5
                                                      64.             3.
                                                                       0            5
                                                                                   2.            2
                                                                                               53.            0
                                                                                                            67.

Total                                      1
                                        258.            0
                                                     445.            22.
                                                                       1            .
                                                                                  212            2
                                                                                              280.            2
                                                                                                           466.



(1) There are no delinquent receivables in the commercial banking and institutional business that are not impaired.


The year-on-year decrease in outstanding retail receivables can be attributed to an adjustment in the in-
ternal process for the management of delinquent receivables. Taking this adjustment into account, the
ratio of delinquent receivables to the overall retail mortgage portfolio (0.5 percent) remains at the same
level as in the previous year. As with the current portfolio, no significant concentration of any specific type
of credit was observed in the delinquent portfolio segment.



Risk provision


The loan loss provisions in the lending business include portfolio-based impairment allowances and spe-
cific impairment allowances. The need for risk provisions is calculated quarterly and approved by the over-
all Management Board.
                                                     F-44




Development of the risk provision under IFRS


                                                                            2011                 2010

                                                                             €m                   €m

Opening balance                                                             -473                 -396
M erger / changes in the Gro up structure                                    -21                    0

Utilizatio n o f existing allo wance                                         82                    46

A dditio ns to / reversals o f risk pro visio n                              -80                 –123

Other changes                                                                –1                   –0

Clo sing balance                                                            -493                 -473




As in previous years, the largest amount of risk provisions occurs in mortgage lending. In 2011, risk provi-
sions and the risk costs (annual additions through profit or loss) were within budgeted expectations.



Monitoring and management of operational risks



Risk definition


Operational risk is defined as the risk of financial loss through external influence (criminal acts, natural
disasters, etc.) or through internal factors (e.g. failure of IT systems, fraud, human error, faulty processes,
structural weaknesses, insufficient monitoring).


At ING-DiBa, operational risk also includes legal risks that result from contractual arrangements or general
legal conditions.



Organization


The Risk Management department is responsible for coordinating all activities with regard to management
of the operational risk. Its duties essentially include the methodical specifications for identifying, quantify-
ing and managing operational risks and adequate risk reporting to the ORC as well as on a quarterly basis
to ING within the framework of the Non-Financial Risk Dashboard (NFRD). In this function, the Risk Man-
agement department works closely with the respective relevant divisions or functional and staff depart-
ments.


Management of operational risks also includes ensuring compliance with requirements of the Sarbanes-
Oxley Act (SOX 404) and fraud prevention.


Contact persons for SOX and fraud are appointed within the department for this purpose.


The topic of outsourcing services is handled comprehensively in a separate guideline. A risk analysis is car-
ried out for outsourcing within the Group.



Operational risk strategy


Operational risk management is aimed at identifying, analyzing and assessing all of the Bank's material
risks based on a comprehensive and integrated approach. Acceptable and unacceptable risks are differenti-
                                                     F-45




ated. Risk mitigation strategies must be developed for the unacceptable risks and derived measures im-
plemented in order to reduce the risks to an acceptable level. This ensures that the total of all risks is al-
ways covered by the risk-taking capital allocated for this risk type in accordance with the Risk-bearing
Capacity Plan and the Bank's continued existence is ensured.



Operational risk management and risk controlling


Management of the operational risks is based on the Basel II qualitative requirements, compliance with
legal or regulatory provisions and the directives established within the Group and is aimed at ensuring a
high level of information security.



Incident reporting and integrated risk assessments


Operational risk management includes a company-wide incident reporting system, observation and analy-
sis of key risk indicators (KRI), implementation of integrated risk assessments (IRA) in critical divisions and
systematic tracking of requirements resulting from internal or external audits (audit findings tracking).



Information security


The high standards for information security are set forth in detailed IS guidelines. Compliance with these
guidelines is continuously monitored by the Risk Management department.



Legal security


To safeguard against legal risks, the Bank generally uses standardized basic or master agreements reviewed
by the Legal department.



Business continuity plan


Customized individual contractual arrangements are reviewed by the Legal department.


ING-DiBa has a detailed Business Continuity Plan (BCP) for all three sites and its Vienna branch, ING-DiBa
Direktbank Austria, which are integrated in a comprehensive Business Continuity Management (BCM) plan.


This plan includes detailed communications plans, instructions, system documentation and codes of con-
duct, which ensure the maintenance and/or restoration of operations in an emergency (system outage,
destruction of an office through fire, natural disasters, terrorist attacks, etc.). The BCM and all of its sub-
parts are subject to regular tests (e.g., evacuation drills, power blackout simulations, testing the notifica-
tion chain, etc.).


The Risk Management department is also responsible for maintenance and lifecycle management of the
BCM. The BCP was updated as scheduled during the year under review. The updated plans were subse-
quently tested and checked for their further applicability.
                                                     F-46




Risk management at the portfolio level


The Bank manages operational risk at the portfolio level by setting limits under the Risk-bearing Capacity
Plan. The economic capital requirement is determined using the Advanced Measurement Approach (AMA)
in accordance with Basel II/SolvV. This risk model was centrally developed by ING.


The Bank is in involved the process of determining the regulatory capital charge and the allocation required
for ING-DiBa's operational risk.


In a first step, the overall risk is scaled at the ING Group level. In a second step, the risk is allocated to the
Bank proportionally based on its relative size.


In the AMA model, the capital amount required for operational risks is determined using a seven step
process. The starting point is an external incident database (Fitch/Algo OpData). This database includes
data from the ING Group as well as losses of other companies. After reviewing the recorded losses for spe-
cific relevancy with regard to the business transaction and the operational risk affected for ING, losses are
classified into models and adjusted for inflation. Scaling according to size drivers (e.g. total assets) is con-
ducted on the basis of this. Capital is determined using a normal distribution with a confidence level of
99.9 percent and allocated to ING-DiBa based on its relative size (internal size drivers). The minimum capi-
tal requirement calculated in this way can be influenced by ING-DiBa on the basis of a bonus malus system
through the quality of the internal control system.


This model is currently undergoing a thorough revision. The previous external loss data collection is being
replaced by the more comprehensive data collection of the Operational Riskdata eXchange Association
(ORX). Values from historical internal loss data and risk costs that are calculated from scenario analyses as
well as from risk self-assessments will be included in future calculations. The modeling will take place in
the future at the level of ING's business lines and will be allocated to the respective business units using
capital and risk-relevant metrics. The bonus/malus system is being replaced by the inclusion of internally-
collected data. The first-time application of the new model is planned for 2012.
                                                                     F-47




Additional disclosures under IFRS 7


Maximum default risk for each class of financial instrument

                                                                            12/31/2011   12/31/2010
                                                                                  €m           €m
Assets from statement of financial position
Cash reserve                                                                    2,783         1,417
Loans and advances to banks
  Payable on demand                                                             3,061         2,197
  Other loans and advances                                                      2,730         6,512
Loans and advances to customers
  Mortgage loans                                                               56,586        51,550
  Consumer loans                                                                3,320        2,839
  Public sector loans and other loans and advances                              3,945         5,294
  Corporate loans                                                                1,598           0
  Asset-backed securities / mortgage-backed securities                           9,776       3,485
  Risk provision                                                                – 493        – 473
Adjustment to portfolio fair value hedges                                       2,366         1,665
Derivatives with positive fair value
  Hedging derivatives                                                             237          250
  Other derivatives                                                                80          161
Financial investments
  Held-to-maturity                                                              5,643        7,099
  Available-for-sale                                                           16,559        13,178
Other assets
  Interest accrued on loans and advances to banks                                  28            0
  Interest accrued on AfS financial investments                                   301          254
  Interest accrued on HtM financial investments                                   168          214
  Interest accrued on receivables (ABS / MBS)                                      86            6
  Interest accrued on hedging derivatives                                         110          137
  Interest accrued on other derivatives                                            52          108
  Other                                                                            68           26
Maximum default risk for assets in statement of financial position            109,005       95,918
Financial guarantees                                                              623            2
Irrevocable loan commitments                                                    7,246        4,288
Other business                                                                      0           30
Maximum default risk                                                          116,874      100,238
                                                                     F-48




Reconciliation of IFRS carrying amounts to risk report

                                                                 12/31/2011    12/31/2011         12/31/2010     12/31/2010
                                                                    IFRS                             IFRS
                                                                               Risk report                       Risk report
                                                                  carrying                         carrying
                                                                                nominal                           nominal
                                                                  amount                           amount
                                                                          €m            €m                 €m              €m
Assets from statement of
                                 Descriptions from risk report
financial position
Cash reserve                                                           2,783                             1,417

Loans and advances to banks                                            5,791          3,872             8,709             6,481

  Payable on demand                                                    3,061                            2,197
                                 Corporate lending                                          18                                 0
  Other loans and advances                                             2,730                            6,512
                                 Reverse repo                                         2,363                              4,109
                                 Uncovered securities (1)                               724                               2,272
                                                      (1)
                                 Covered securities                                     655                                100
                                 Corporate lending                                           21                                0
                                 Structured finance                                         91
Loans and advances to
                                                                      74,732         75,093            62,694           62,562
customers
  Mortgage loans                 Mortgage loans                       56,586         56,170            51,550            51,123

  Consumer loans                 Other retail loans                    3,320          3,223             2,839             2,747
  Public sector loans, other
                                                                       3,945                            5,294
  loans and advances
                                 Short-term lending to
                                                                                      1,334                              2,428
                                 municipalities
                                 Uncovered securities (1)                             2,582                               2,782
                                 Corporate lending                                           0
                                 Structured finance                                         27
  Corporate loans                                                      1,598                                0
                                 Corporate lending                                      937                                    0
                                 Structured finance                                     895                                    0
  Asset-backed securities (ABS)
  / mortgage-backed securities ABS/MBS                                 9,776          9,924             3,485            3,482
  (MBS)
  Risk provision                                                       – 493                            – 473
Adjustment to portfolio fair
                                                                       2,366                            1,665
value hedges
Derivatives with positive fair
                                                                         317                              411
value
  Hedging derivatives                                                    237                              250
  Other derivatives                                                      80                               161
Financial investments                                                 22,202         21,439            20,277            19,815
  Held-to-maturity                                                     5,643                            7,099
                                 Uncovered securities (1)                             1,090                               1,125
                                                      (1)
                                 Covered securities                                   4,646                              5,826

                                 ABS/MBS                                                 88                                138
  Available-for-sale                                                  16,559                           13,178
                                 Uncovered securities (1)                              8,152                            10,203
                                                      (1)
                                 Covered securities                                   7,463                               2,523

Other assets                                                            814                               745
                                                                        F-49




                                                                   12/31/2011        12/31/2011        12/31/2010       12/31/2010
                                                                      IFRS                                IFRS
                                                                                     Risk report                        Risk report
                                                                    carrying                            carrying
                                                                                      nominal                            nominal
                                                                    amount                              amount
                                                                           €m                 €m               €m                 €m

Assets from statement of
                                   Descriptions from risk report
financial position

  Interest accrued on loans and
                                                                                28                                  0
  advances to banks

  Interest accrued on AfS
                                                                           301                                 254
  financial investments
  Interest accrued on HtM
                                                                           168                                  214
  financial investments
  Interest accrued on
  receivables from customers                                                86                                      6
  (ABS/MBS)
  Interest accrued on hedging
                                                                            110                                 137
  derivatives
  Interest accrued on other
                                                                                52                             108
  derivatives
  Other                                                                     68                                  26
Maximum default risk for assets
in statement of financiial                                             109,005            100,404            95,918            88,858
position
Repos/lending (2)                                                               0                  0                0            1,051

Guarantees and letters of credit                                            813                                     0

                                   Corporate lending                                          748                                     0
                                   Structured finance                           0                 54                                  0
Financial guarantees                                                                                                0
                                   Corporate lending                                          407                                     0
                                   Structured finance                                         165                                     0
Total assets                                                            109,818           101,778            95,918            89,909



(1) This item includes secured and unsecured loans against borrower's notes.
(2) These are securities lending transactions with the ING Group in accordance with IFRS 7.15 not recognized on the statement
of financial position. They are reported under collateral held in accordance with IFRS 7.15.
                                                    F-50




Internal control system for accounting


Goal of the internal control and risk management system


In preparing the annual financial statements for publication, the highest priority is placed on dependable
compliance with the generally accepted accounting principles. In doing so, all regulatory and legal re-
quirements relevant for ING-DiBa must be followed. The internal control and risk management system for
accounting (ICS Ac) assists in achieving this objective. Risks arise through misstatements in financial re-
porting. For this reason, processes in the preparation of financial statements are backed with appropriate
controls.



Risks associated with accounting

Because of unintended errors or fraudulent actions, financial statements may suggest a view of the net
assets, financial position, and results of operations that does not represent a true and fair view. This is the
case when data or disclosures in the notes included in the financial statements differ materially from
proper disclosure. Variances are considered material when they can influence economic decisions made on
the basis of these financial statements by recipients of the financial statements. Under certain circum-
stances, these risks are associated with legal sanctions, such as the intervention of banking authorities. In
addition to this, investor trust may be unfavorably affected, as can the Bank's reputation. Therefore, the
goal of the ICS Ac established by the management of ING-DiBa is avoiding these main risks. Such a system
can offer reasonable assurance that errors in financial statements can be avoided to the greatest extent
possible. In this regard, however, there is no absolute assurance.



General conditions for ICS Ac

The Bank orients itself on the Minimum Requirements for Risk Management (MaRisk) with its ICS Ac. These
set forth the principles for designing the Bank's own internal control system.

In designing the control system, the Bank relies on the framework for internal control systems of the
Committee of Sponsoring Organizations of the Treadway Commission, which is intended to help improve
the quality of financial reporting through ethical actions, effective internal controls and good management.


Control objectives for accounting are the

•   existence and accuracy of assets and liabilities recognized and transactions reported

•   completeness of transactions and account balances reported in the financial statements

•   measurement at the applicable values for assets, liabilities and transactions

•   consideration only in the case of existing beneficial ownership

•   presentation and reporting in accordance with statutory requirements

•   protection of assets


The principles of efficiency were considered in establishing the ICS Ac. Specifically, this means that the
benefits of controls on one hand and the cost aspect on the other hand were balanced responsibly. As with
                                                  F-51




all processes and systems, by nature, absolute assurance cannot be guaranteed for the identification and
avoidance of errors in accounting despite the greatest care.

Organization of the ICS Ac


In addition to the single-entity financial statements in accordance with HGB (Handelsgesetzbuch, “HGB”),
ING-DiBa also prepares consolidated financial statements in accordance with IFRS. In doing so, the Bank
takes into account the applicable commercial laws and German Accounting Standards (GAS). The Bank
manages the Group using a management accounting system based on the IFRS figures. The overall Man-
agement Board is responsible for the organization and improvement of the ICS Ac. The Accounting depart-
ment is responsible for the application of proper accounting in all financial statements in accordance with
national and international accounting standards. The Accounting department also carries out the recon-
ciliation of funds for customer securities transactions.


International Accounting is responsible for reporting to the ING Group and preparing ING-DiBa consoli-
dated financial statements including all financial information (IFRS notes). The separate financial state-
ments for the companies are aggregated, and the necessary consolidation steps are executed. Intra-Group
transactions are eliminated and the proper implementation and approval of adjusting processes is moni-
tored.


Certain activities in connection with accounting are conducted in other functions and departments:

•   Risk Management calculates the risk provision for counterparty default risk in the lending business. It
    provides relevant information on the counterparty default risk for the risk report. Operational Risk
    Management assesses operational risk within the scope of the Advanced Measurement Approach
    (AMA) in accordance with Basel II. Market & Liquidity Risk Management provides important informa-
    tion for market risk (interest rate risk) and liquidity risk for presentation in the risk report.

•   Controlling is responsible for the analysis of the operating result from a management accounting
    perspective, based on the IFRS figures. Treasury is responsible for asset liability management with re-
    spect to liquidity management. All proprietary trading transactions falling under the scope of the
    MaRisk are processed and monitored by the Total Quality Management department. The Personnel de-
    partment provides data necessary for calculating provisions for pensions and other personnel-related
    provisions.

•   The Legal department manages pending litigation and determines the claim value for calculating pro-
    visions for the statement of financial position. Corporate Communications provides certain informa-
    tion for the consolidated financial statements and coordinates the preparation and design of financial
    reports.


The Supervisory Board's Audit Committee is responsible for receiving and processing complaints from
employees, shareholders and third parties. Complaints about accounting and other accounting-related
issues can be submitted anonymously. In this way, employees are given the opportunity to report viola-
tions of internal guidelines without the fear of repercussions. Consequently, the whistleblower principle
applies here.


The ICS Ac includes many internal controls and processes intended to minimize the risk of errors in the
financial statements. The processes and tasks, authorities, responsibilities, controls and communication
channels associated with these are clearly defined and coordinated.


The framework for the ICS Ac is documented in the Bank's organizational handbook. This handbook also
contains the guidelines and work directives for the entire company. These are also accessible via the intra-
net. The guidelines and work directives are regularly reviewed for accuracy and currentness. Likewise, the
                                                   F-52




controls for compliance with the internal set of regulations and requirements for the segregation of func-
tions are reviewed on a regular basis.


Uniform work directives and guidelines exist for ING-DiBa's Accounting department. In addition, exact job
descriptions and authorizations exist for the individual activities. The question of adequate substitutes in
the event of employee absences is also addressed. Detailed accounting requirements ensure proper ac-
counting for business transactions. In addition, ING-DiBa's IFRS accounting is aligned with the ING Group
accounting manual for exercising options. Detailed schedules are published during the preparation of the
annual financial statements. Changes to the accounting guidelines are communicated in a timely manner.
Specialized training prepares the employees for upcoming changes in national and international account-
ing.


Business transactions are recorded centrally by Accounting and also decentrally in the functional depart-
ments. Entries are made in accordance with the principle of dual control. In addition, ING-DiBa conducts
system-integrated, automatic controls in the form of control sums, check digits or plausibility checks. Many
controls and reconciliations are carried out in accounting in order to ensure the accuracy and consistency
of the different data sources with the general ledger, the national accounting, reporting and Group ac-
counting.


The process of issuing and administering user access is automated and centrally organized. Applications for
access are collected electronically by the system in the functional departments and released by the respec-
tive manager after review. The IT department is responsible for the technical access calibration and admini-
stration. For accounting, there are different access profiles. In this way, tiered read and write access can be
granted for the systems and subsystems needed for accounting.


Internal audit supports the Management Board by assessing the ICS Ac and providing recommendations. In
this way, it contributes to ensuring the propriety of accounting.



Branches


Austrian Branch



General economic conditions in Austria


ING-DiBa AG has a branch in Vienna, ING-DiBa Direktbank Austria, serving the entire Austrian market. After
the crisis in 2009 brought about a real decline in GDP by 3.8 percent, the Austrian economy recorded a
clear recovery both in 2010 with a real increase of 2.3 percent as well as in 2011 with an expected real in-
crease of 3.3 percent.


Whereas the Austrian economic research institute WIFO considers 2011 an "excellent year" for the domestic
economy, the forecast for 2012 appears lackluster with economic growth of 0.4 percent. However, in light
of the stagnating euro zone, economic researchers expect a sustained "Austria bonus": In 2012, Austria will
also grow more robustly than the average of Western European countries – for the tenth time in a row.


The reason for the expected dip in growth, according to economic researchers, is that the sovereign debt
crisis has meanwhile reached the real economy, investment activity has slowed, and consumers have also
lost their appetite for spending. For 2013, the WIFO expects economic growth of 1.6 percent for Austria
thanks to correspondingly expected momentum from emerging markets, assuming the crisis does not
worsen.
                                                    F-53




The unemployment rate was around 4.1 percent in Austria in autumn 2011 and thus far below the average
of 10.3 percent in the euro area (Eurostat, October 2011). With an annual rate of inflation of 3.6 percent for
November 2011, the country tops the list of all member states of the Economic and Monetary Union of the
European Union and also exceeded the European average for annual inflation for the third time in a row.



The industry environment in Austria


The banking industry in Austria experienced some turbulence over the course of the 2011 reporting period.
Of three participating large banks, two passed the EBA's first stress test with satisfactory results, while one
institution was certified as requiring action. In the course of overcoming the debt crisis, the EBA calculated
the additional need for core tier 1 capital in December 2011 for Erste Group Bank AG, Raiffeisen Central
Bank Austria AG, and Oesterreichische Volksbank AG at a total of EUR 3.9 billion by the end of June 2012 in
order to then reach the required core tier 1 capital ratio of nine percent.


Like Germany, the number of bank branches in Austria also seems to be higher than average. According to
statistics from the Oesterreichische Nationalbank, there is one bank branch to every 2,000 residents. Their
high level of involvement in Central and Eastern Europe, particularly neighboring, crisis-plagued Hungary, is
a burden to the major banks of this country. ING-DiBa Austria, in contrast, concentrates only on the do-
mestic retail business.



ING-
ING-DiBa Direktbank Austria business performance


ING-DiBa Direktbank Austria concentrates on savings products; in addition, its product range also includes
investments in investment funds and the lending business. ING-DiBa Direktbank Austria does not offer
mortgage loans and current accounts.


Under the management of CEO Roel Huisman and CFO Thomas Geis, the institution's number of customers
as of the reporting date rose year-on-year from around 471 thousand customers to 492 thousand. The
portfolio volume of customer deposits increased even more clearly by 6 percent from EUR 6.3 billion as of
December 31, 2010, to EUR 6.7 billion as of December 31, 2011. This can be considered an indicator that,
under the effects of the financial market crisis, customers were also searching for stable investment oppor-
tunities in 2011, and placed their trust in ING-DiBa Direktbank Austria as Austria's leading direct bank.


Following the positive experiences in Germany, ING-DiBa Austria focused more intensely on the lending
business in the reporting period – with a modernized range of lending products expanded by fixed interest
offers and variable payouts. The introduction of mobile banking with apps for all popular smartphones,
promotional actions in the federal states, and the launch of the information portal "Gut mit Geld" helped
increase the Bank's already positive image.


ING-DiBa Austria also continued its established cooperation in advertising with Niki Lauda in 2011. Quite
well known among Austrian consumers by now, the motto of the television commercials, "Because I haven't
a cent to waste", shows Niki Lauda owning up to his thrifty ways with humor and charm.



Commercial Banking

The new branch's business lines mainly include corporate lending, export financing, commercial real estate
financing, payment transactions, and access to financial markets. The customer structure is made up exclu-
sively of commercial and institutional customers.
                                                   F-54




Commercial Banking is well-positioned internationally and takes leading positions in Eastern Europe and
the Benelux countries.

The commercial banking business of the former German branch of ING Bank N.V., Amsterdam, was taken
over with the goal of bundling the strong ING-DiBa retail brand and the corporate customer business un-
der a single German roof. Correspondingly, the European presence of the ING Group will be built up into an
international bridgehead for customer activities in Central and Eastern Europe by expanding the corporate
customer business in the key market Germany.

For this purpose, ING-DiBa AG is focusing on solid growth by taking advantage of the market opportunities
arising from the consolidation of commercial banks and the refinancing challenges faced by the central
savings banks (Landesbanken).

The individual business lines performed as follows in 2011:

In the lending business, Commercial Banking established itself as a strong partner of the German economy.
As of December 31, 2011, loans and advances to banks amounted to EUR 0.2 billion and loans and advances
to customers EUR 1.6 billion.

The other business lines Financial Markets, Transaction Services, International Business Clients, and Pay-
ment Transactions also performed well in 2011 and exhibited positive growth rates.
                                                    F-55




Report on Opportunities and Expected Developments
The uncertainty regarding how the European debt crisis will further develop makes it extraordinarily diffi-
cult to make an economic forecast for 2012. Admittedly, economists agree in their estimate that a signifi-
cant decline in economic growth is to be expected. Experts expect a "soft landing" if the debt crisis does not
continue to deepen in the coming months and the implemented restructuring measures reassure the
markets. In its report presented in the fall of 2011, the German Council of Economic Experts assumes GDP
growth of 0.8 percent in Germany and even a small further reduction in the unemployment rate. The eco-
nomic research institute (Wifo) expects growth of 0.8 percent for Austria. Other forecasts are more pessi-
mistic and regard even stagnation as well as a decrease in GDP on at least a quarterly basis as probable.

Nevertheless, the expected economic development in Germany and Austria should turn out considerably
better than in other member states of the Economic and Monetary Union of the European Union. For in-
stance, the OECD only expects GDP growth of 0.3 percent for the euro zone in 2012.

The European Commission expressed a rather pessimistic opinion in an economic forecast presented in
November 2011 by the European Commissioner for Economic and Financial Affairs, Olli Rehn. According to
his report, there is a risk of a renewed recession, because the slowing real economy, the unstable public-
sector finances, and the vulnerable financial sector are stuck in a vicious downward spiral. In light of the
uncertain economic situation, many companies in the euro zone have withheld planned investments for
the time being. In addition, the European Commission warned of a new credit crunch.

Above all two factors of uncertainty are weighing heavily on all economic forecasts:

The European debt crisis: If more countries are directly infected by the crisis, if large countries such as Italy
spin out of control, if other countries in addition to France lose their top credit rating, and if the massive
austerity measures implemented in the crisis countries lead to a deep recession with severe social unrest,
then the forecasts published at the end of 2011 could prove to be too optimistic. In contrast, if the markets
calm down, economic growth in the third and fourth quarters of 2012 could once again gain momentum.

Uncertainty factor China: Strong demand from the Middle Kingdom contributed significantly toward the
surprising recovery of the global economy – and in particular the German economy – after the financial
crisis of 2007 to 2009. Chinese growth weakened at a high level in the second half of the reporting period.
At the same time, significant credit risks were identified for banks – in particular the country's "shadow
banks".

The German industrial sector has recorded an increase in incoming orders with improving earnings quality
since mid-2010. Positive cash flow effects, including from implemented cost-saving measures, frequently
led to a reduction in financial liabilities and/or the consolidation of liquidity positions. In addition, many
companies took advantage of the favorable environment on the capital markets to issue new bonds.

The interest rate level can be expected to remain low against the background of the slowdown in economic
activity to be expected at least for the short to medium term. A noteworthy decrease in consumer spend-
ing in 2012 appears unlikely in light of the continued positive employment situation. Solid growth is still
expected in the retail business for 2012.

Overall, ING-DiBa has prepared itself for a difficult economic environment in 2012; nevertheless, we remain
optimistic that we will be able to further expand our position as one of the largest German savings banks
(Sparbanken) and once again increase our business volume.

In the Retail Customer Assets segment, ING-DiBa expects sustained high demand for stable savings prod-
ucts. The financial institution would like to once again generate noteworthy growth in 2012 with its well-
established call deposit and fixed term deposit accounts.
                                                   F-56




Despite the sharp volatility on the financial markets in past months, ING-DiBa expects positive results for
its securities business. Most of the Bank's customers are investors focused on the long-term who regard
securities as a nearly indispensable part of a balanced asset portfolio. Moreover, despite strong earnings in
the reporting period, growth prospects for the "current account" product remain positive.

Since we expect the interest rate level to remain low and for real assets to continue to be in demand, we
expect demand for real estate financing to be stable in 2012. Finally, we expect growth in the area of con-
sumer loans.

The Bank's objective for 2012 in the Commercial Banking segment is to double the volume of transactions
reported on the statement of financial position. In 2013, rise in volume should be at the same level in ab-
solute terms.

Following the record earnings in 2011 and the significant increase in profits, the Bank expects pre-tax profit
in 2012 to decline slightly by approximately 10 percent if economic conditions do not deteriorate signifi-
cantly. We consider the main reason for this decrease in earnings to be increased margin pressure due to
greater competition. It is no longer so easy for some banks to refinance themselves on the capital market.
Therefore, more and more foreign banks have also learned to appreciate retail customer deposits as a
highly valuable and comparatively inexpensive source of capital.

In contrast, the increase in business volume should reach approximately the level of the fiscal year just
ended. While business volume in 2013 is expected to remain at the level of 2012, we expect a volume-based
increase in pre-tax profits compared to 2012 in the upper single-digit percentage range.

At this time, we would like to thank our 7,446,295 customers and all employees of our Bank. They have
made the encouraging figures shown in this annual report possible.
                                                 F-57




Consolidated statement of financial position




                                                        12/31/2011   12/31/2010
                                                              €m           €m
Assets
Cash reserve                                1               2,783         1,417
Loans and advances to banks                 2                5,791       8,709
Loans and advances to customers             3               74,732      62,694
Adjustment to portfolio fair value hedges   4               2,366         1,665
Financial investments                       5              22,202        20,277
Derivatives with positive fair value        6                 317           411
Investment property                         7                  12           13
Property and equipment                      8                  51           42
Intangible assets                           9                  28           29
Income tax assets                           10                   1           3
Deferred tax assets                         11                381          329
Other assets                                12                814          744
Total assets                                              109,478       96,333



Equity and liabilities

EQUITY
Subscribed capital                                            100          100
  Reserves                                                   5,378        4,731
Non-controlling interest                                        0            0
Equity                                      13               5,478        4,831
LIABILITIES
  Securitized liabilities                   14                497            0
  Deposits from banks                       15               7,955        5,670
  Due to customers                          16             90,860       82,223
  Derivatives with negative fair value      17              3,003        2,092
  Income tax liabilities                    18                  8            3
  Deferred tax liabilities                  19                412          337
  Non-current provisions                    20                 56           52
  Other liabilities                         21              1,209         1,125
Total equity and liabilities                              109,478       96,333
                                                                   F-58




Consolidated income statement




                                                                            2011      2010
                                                                            €m        €m
Interest income                                                             3,116    2,726
Interest expense                                                          – 1,790   – 1,598
Net interest income                                                  31    1,326      1,128
Commission income                                                            146       139
Commission expense                                                         – 105      – 96
Net commission income                                                32       41        43

Net gains / losses on measurement of derivatives and hedged items    33     – 29        21

Other net gains / losses on financial investments and investment
                                                                     34    – 157      – 34
property
Other income                                                         35      137         6
Total income                                                                1,318     1,164


Risk provision                                                       37       77       127
Amortization and write-downs of intangible assets                    38        0         3
Personnel expenses                                                   39      203       186
Other administrative expenses                                        40      378       354
Total expenses                                                               658       670


Profit before tax                                                            660       494
Income tax                                                           41    – 211     – 149
Profit after tax                                                             449       345
                                                                 F-59




Consolidated statement of comprehensive income




                                                                        Amount before                         Amount after
                                                                            tax             Income tax           tax
                                                                            2011              2011               2011
                                                                            €m                 €m                 €m
Profit after tax                                                                                                             449
Other comprehensive income
Measurement of available-for-sale financial investments         5,13                18                   6                    12

Realized gains and losses transferred to the income statement   33,13               20                   6                    14

Change in the cash flow hedge reserve                           23,13              – 14              –5                      –9
Impairment losses                                               5,13               136                   44                   92
Other remeasurements                                            5,13                    0                0                    0

Actuarial gains /l osses from defined benefit pension plans      20                     0                0                    0

Consolidated other comprehensive income                                            160                   51                  109
Total comprehensive income                                                                                                   558
                             Income tax liabilities

                                                                        Amount before                         Amount after
                                                                            tax             Income tax            tax
                                                                            2010              2010               2010
                                                                            €m                 €m                 €m
Profit after tax                                                                                                             345
Other comprehensive income
Measurement of available-for-sale financial investments         5,13                63                   20                   43

Realized gains and losses transferred to the income statement   33,13               32                   10                   22

Change in the cash flow hedge reserve                           23,13               19                   6                    13

Impairment losses                                               5,13                    0                0                    0
Other remeasurements                                            5,13                    0                0                    0

Actuarial gains / losses from defined benefit pension plans      20                     0                0                    0

Consolidated other comprehensive income                                             114                  36                   78
Total comprehensive income                                                                                                   423
                                                     F-60




Consolidated statement of changes in equity




                                                    Subscribed                     Total
                                                                  Other reserves
                                                        capital
                                                                                    2011
                                                          2011             2011

                                                          €m               €m       €m
Consolidated equity as of Jan. 1                           100             4,731   4,831
Remeasurement of available-for-sale financial
                                                             0               12       12
investments after tax
Realized gains / losses transferred to the income
                                                             0               14       14
statement
Changes in the cash flow hedge reserve after tax             0              –9       –9
Impairment losses                                            0               92       92
Other remeasurements                                         0                0        0
Consolidated other comprehensive income                      0              109     109


Subtotal as of Jan. 1                                      100            4,841    4,941
Other changes                                                0                2        2
Merger / changes the group structure                         0              245     245
Profit transfer                                              0            – 394    – 394
Contribution from tax group (push-down method)               0              236     236
Profit after tax                                             0              449     449


Consolidated equity as of Dec. 31                          100            5,378    5,478


                                                    Subscribed
                                                                  Other reserves   Total
                                                        capital
                                                         2010              2010    2010


                                                          €m               €m       €m
Consolidated equity as of Jan. 1                           100            4,399    4,499
Remeasurement of available-for-sale financial
                                                             0               43       43
investments after tax
Realized gains / losses transferred to the income
                                                             0               22       22
statement
Changes in the cash flow hedge reserve after tax             0               13       13
Impairment losses                                            0                0        0
Other remeasurements                                         0                0        0
Consolidated other comprehensive income                      0               78       78


Subtotal as of Jan. 1                                      100            4,477    4,577
Other changes                                                0                 1       1
Merger / changes in group structure                          0                0        0
Profit transfer                                              0            – 290    – 290
Contribution from tax group (push-down method)               0              200     200
Profit after tax                                             0              345     345


Consolidated equity as of Dec. 31                          100             4,731   4,831
                                                   F-61




For detailed disclosures on the equity accounts, refer to note 13.


The revaluation reserve is included in reserves in this summary. Note 13 reports on changes in the revalua-
tion reserve.


There were no retrospective changes in accordance with IAS 8 due to the correction of errors or due to
transition effects arising from the change in accounting policies.
                                                                  F-62




Consolidated statement of cash flows




                                                                               12/31/2011   12/31/2010
                                                                                     €m           €m
Profit before tax                                                                    660          494
Non-cash items included in profit before tax and reconciliation to cash flow
                                                                                       0            0
from operating activities
   Depreciation and write-downs of property and equipment, write-downs of
   loans and advances and financial investments, and reversals of impairment         298           211
   losses on these items
   Increase in provisions                                                             42           48
  Gains or losses on disposal of financial investments and property and
                                                                                      21           34
  equipment
  Other non-cash expenses and income                                                  29          – 21
Subtotal                                                                           1,050          767



Cash changes in operating assets and liabilities

  Loans and advances to banks                                                      3,201       – 1,774
  Loans and advances to customers                                               – 10,998       – 6,732
  Other operating assets                                                           – 282         – 134
  Positive and negative fair values of derivatives                                    13          – 18
  Deposits from banks                                                                638         1,229
  Due to customers                                                                 8,096        6,945
  Other operating liabilities                                                        322           32
Net cash flows from operating activities                                           2,040          314


Investing activities
Proceeds from
  Disposal of securities                                                           2,468         2,707
  Maturity of securities                                                            1,445        2,133
  Additions to cash resulting from the merger                                        357            0
Payments for investments in
  Financial investments                                                          – 5,609       – 4,340
  Property and equipment                                                            – 20           –5
  Intangible assets                                                                  – 11         – 12
Net cash flows from investing activities                                          – 1,370         484
                                                  F-63




Financing activities

   Issuance o f securitized liabilities                   497       0

   P ayments to shareho lders                            – 290   – 286

Net cash used in financing activities                    – 290   – 286



Net cash flo w                                            877      511

Cash and cash equivalents at start o f perio d           4,999   4,488

Cash and cash equivalents at end o f perio d             5,876   4,999



The statement of cash flows is explained in note 42.
                                                  F-64




Notes to the IFRS consolidated financial statements




General information

ING-DiBa AG is a German stock corporation (Aktiengesellschaft) with activities in the banking sector.


Its business is primarily focused on direct banking with retail customers (retail business). The commercial
banking business of the former German branch of ING Bank N.V., Amsterdam, was transferred to ING-DiBa
AG in the course of a multi-stage reorganization. The Bank's activities thus expanded to include the "Com-
mercial Banking" business segment as of August 31, 2011. This is discussed in greater detail in the section
"Significant accounting policies".


ING-DiBa AG is domiciled at Theodor-Heuss-Allee 106, 60486 Frankfurt am Main. The Company is regis-
tered under HRB 7727 in the commercial register at the Local Court of Frankfurt am Main.


The Company operates a branch in Vienna, Austria, trading as ING Direktbank Austria. An additional branch,
established during the fiscal year and domiciled in Frankfurt am Main, has been responsible for continuing
the business activities of the former German branch of ING Bank N.V. since August 2011. That branch trades
under the name ING Bank, a branch of ING-DiBa AG.


ING-DiBa AG's operation in Germany has offices in Frankfurt am Main, Nuremberg, and Hanover.


ING-DiBa AG is the parent company of a subgroup. All companies in the subgroup are domiciled in Ger-
many. The activities of the subsidiaries are focused on property and asset management; none of them op-
erates banking business. One company is a special purpose entity created to securitize ING-DiBa AG's
mortgage loans (note 28).


All of ING-DiBa AG's share capital was held by ING Deutschland GmbH, Frankfurt am Main, at the end of
the reporting period. The annual financial statements of ING-DiBa AG are included in the consolidated
financial statements of ING Groep N.V., Amsterdam.


The share capital of ING-DiBa AG is not listed on the stock exchange.


The Management Board signed these consolidated financial statements on April 23, 2012 and sent them to
the Supervisory Board for approval.


Where these Notes use the term "consolidated financial statements", they refer to the consolidated finan-
cial statements of the ING-DiBa subgroup. This applies accordingly to all parts of the subgroup's consoli-
dated financial statements and the term "consolidated subgroup". The consolidated financial statements of
other consolidated groups and other consolidated groups themselves will be identified as such. To distin-
guish the subgroup's management report clearly from the management report for the single entity ING-
DiBa AG, the subgroup's management report will be referred to as the "Group management report".
                                                   F-65




In fiscal year 2011, ING-DiBa issued its first Pfandbrief on the market (a listed mortgage Pfandbrief; ISIN DE
00A1KRJA0; see note 14) and thus acquired the status of a capital-market-oriented company under Ger-
man commercial law.

These consolidated financial statements for the fiscal year ended December 31, 2011 were prepared on the
basis of article 4 of Regulation 1606/2002 (EC) dated July 19, 2002 in accordance with the International
Financial Reporting Standards (IFRS), as adopted in the European Union. In addition, the commercial law
provisions in accordance with section 315 a (1) HGB in conjunction with article 57 no. 1 of the Introductory
Act to the German Commercial Code (Einführungsgesetz zum Handelsgesetzbuch, "EGHGB") were also ap-
plied.


The consolidated financial statements comprise the consolidated statement of financial position, consoli-
dated income statement, consolidated statement of comprehensive income, consolidated statement of
changes in equity and the consolidated statement of cash flows.


They also include the notes to the consolidated financial statements. In addition, this report also contains a
report on operating segments and the Group management report required under German commercial law.


The risk report in accordance with IFRS 7.31-42 is largely integrated into the Group management report
(see Group management report: Risk report).


The consolidated financial statements are presented in euros. Unless otherwise indicated, all figures are
shown in millions of euros (€ m).

The statement of financial position also presents comparative prior-period figures. It does not include the
operations of the former German branch of ING Bank N.V., which was integrated with ING-DiBa AG as of
August 31, 2011 in the course of a multi-stage reorganization.



Significant accounting policies


                                                  ING-
Transfer of the German branch of ING Bank N.V. to ING - DiBa AG

In fiscal year 2011, the operations of the Frankfurt branch of ING Bank N.V., Amsterdam, a wholly owned
subsidiary of ING Groep N.V., Amsterdam, (ING Groep) were completely spun off in accordance with Dutch
law to a wholly owned sister company of ING Bank N.V., Conifer B.V., Amsterdam. The spin-off and transfer
were completed in exchange for a new share in Conifer B.V. Once the spin-off had entered into effect, ING
Groep transferred its shares in Conifer B.V. along the shareholding chain to the parent of ING-DiBa, ING
Deutschland GmbH. Conifer B.V. was then the subject of a cross-border merger with ING-DiBa pursuant to
sections 122 a et seq. of the German Reorganization Act (Umwandlungsgesetz, "UmwG"), whereby no new
shares in ING-DiBa were transferred as consideration.

The integration of the Commercial Banking segment will represent a further source of earnings in addition
to the retail business, and will have a positive influence on the stability of the Bank's earning power. This
will strengthen the retail (savings) business thanks to greater investment potential as compared to the
capital markets business. Commercial Banking's stronger focus on net commission income in addition to
net interest income as a key earnings component represents a broader diversification with respect to
sources of income.

The merger became effective within the meaning of section 5 (1) no. 6 of the UmwG on January 1, 2011. The
effective date of the merger is the date on which the actions of the transferring entity are deemed inter se
to be carried out for the account of the receiving entity.
                                                  F-66




The merger was entered into the commercial register on August 31, 2011.

The merger constituted a business combination under common control since the ultimate control of the
entities involved was deemed to be held and retained by the same parent company, ING Groep N.V., after
the merger. Business combinations under common control generally do not fall within the scope of IFRS 3.
This is an issue which has previously not been dealt with in IFRS.

On the basis of IAS 8.10 to 8.12, ING-DiBa applies US GAAP in conjunction with IDW ERS HFA 2 (amended).
ING-DiBa AG's consolidated financial statements are thus interpreted as an excerpt of the consolidated
financial statements for ING Groep N.V. as a whole.

Accordingly, the intercompany merger was not treated as an arm's length transaction in analogous applica-
tion of IFRS 3, but rather generally as a transfer of net assets at the carrying amounts recorded in the IFRS
consolidated financial statements of ING Groep N.V. as of the date on which control was transferred.

August 31, 2011 was selected as the acquisition date in accordance with IFRS, as this was the date on which
the transfer of control was also evident to outside parties. The carrying amounts for the net assets of the
German branch of ING Bank N.V. were transferred to ING-DiBa AG's books as of that date and recorded as a
shareholder contribution in equity since the merger took place without the transfer of consideration. The
share capital of the acquiring company was not increased.

Given the fact that the date of the merger for IFRS purposes fell during the fiscal year, the income and
expenses of the acquired business only impacted ING-DiBa's profit or loss for the year during the last four
months of the reporting year (September 1 to December 31, 2011). The figures in ING-DiBa's consolidated
financial statements as of December 31, 2010 have not been restated retrospectively.
                                                       F-67




The IFRS carrying amounts for the acquired branch as of August 31, 2011 were as follows:

                                                                             08/31/2011
                                                                                   €m
Assets
Cash reserve                                                                       216
Loans and advances to banks                                                        964
Loans and advances to customers                                                   1,118
Property and equipment                                                               2
Income tax assets                                                                    3
Other assets                                                                        18
Total assets                                                                      2,321

Equity and liabilities                                                               0
Equity                                                                             245
Equity                                                                             245
Liabilities
  Deposits from banks                                                             1,501
  Due to customers                                                                 540
  Income tax liabilities                                                             5
  Deferred tax liabilities                                                           2
  Non-current provisions                                                             3
  Other liabilities                                                                 25
Total equity and liabilities                                                      2,321



The entity which was merged with the Group will henceforth operate as a dependent branch of ING-DiBa
AG.


The new business operations will expand ING-DiBa AG's range of activities. New business segments will
include

    •          corporate customer financing,

    •          foreign trade finance,

    •          involvement in syndicate banking and

    •          international cash pooling for corporate customers.


The Group management report discusses the business of the new branch in detail.



Changes in the Group structure


On August 19, 2011, Rahmhof Grundbesitz GmbH, Frankfurt am Main, was transferred to ING-DiBa in a
transaction at carrying amounts within the overall ING Group, and has been operated as a subsidiary of
ING-DiBa since then.
                                                            F-68




On December 20, 2011, the formerly wholly owned subsidiary ABK Beteiligungsgesellschaft B.V. & Co. KG,
Frankfurt am Main, was merged with ING-DiBa AG. This merger did not impact the consolidated financial
statements of ING-DiBa.



Consolidation


Basis of consolidation


The following companies are included in the basis of consolidation of the IFRS consolidated financial
statements:
                                                       12/31/2011       12/31/2011          12/31/2010        12/31/2010
                                                                     Equity interest                       Equity interest
                                                   Equity interest                       Equity interest
                                                                           (%) held                              (%) held
                                                 (%) held directly                     (%) held directly
                                                                          indirectly                            indirectly
GGV Gesellschaft für Grundstücks- und
                                                             100                  0                  90                10
Vermögensverwaltung mbH, Frankfurt am Main

ABK Beteilligungsgesellschaft B.V. & Co. KG,
                                                                0                 0                100                  0
Frankfurt am Main

ING-DiBa Service GmbH, Frankfurt am Main                     100                  0                100                  0
Pure German Lion RMBS 2008 GmbH, Frankfurt
                                                                0                 0                   0                 0
am Main
Ingredit Verwaltungs GmbH, Frankfurt am Main                 100                  0                100                  0

Helophant Portfolio GmbH, Frankfurt am Main                     0              100                    0              100

Helophant Portfolio II GmbH, Frankfurt am Main                  0              100                    0              100

Rahmhof Grundbesitz GmbH, Frankfurt am Main                  100                  0                   0                 0



ING-DiBa AG holds all of the shares in GGV Gesellschaft für Grundstücks- und Vermögensverwaltung mbH.


ABK Beteiligungsgesellschaft was merged with ING-DiBa AG in fiscal year 2011.


On December 1, 2008, the Bank sold, as part of an RMBS transaction, a portfolio of mortgage loans with a
nominal volume of EUR 4.7 billion to Pure German Lion RMBS 2008 GmbH, Frankfurt am Main, (Pure Ger-
man Lion), a company established for this purpose in the same fiscal year. On this basis, the special pur-
pose entity issued a securitization in RMBSs (residential mortgage-backed securities). ING-DiBa holds all
securities issued as part of this transaction. The special purpose entity is also included in the consolidated
financial statements in accordance with SIC-12. ING-DiBa does not hold any equity interest in the entity. As
a result of full consolidation, a non-controlling interest is reported under equity, which represents the
shares in Pure German Lion RMBS 2008 GmbH, Frankfurt am Main, amounting to EUR 25 thousand. For
more information on equity and special purpose entities, see notes 13 and 28.


ING-DiBa AG holds all shares in Ingredit Verwaltungs GmbH. ING-DiBa Service GmbH holds all shares in
Helophant Portfolio GmbH and Helophant Portfolio II GmbH.


Rahmhof Grundbesitz GmbH, Frankfurt am Main, has been held as a subsidiary since August 19, 2011.


The consolidated financial statements do not include any investments accounted for using the equity
method.
                                                     F-69




Consolidation methods


In accordance with IAS 27.24, the consolidated financial statements of ING-DiBa AG have been prepared in
accordance with uniform Group accounting policies.


Acquisition accounting uses the acquisition method in accordance with IAS 27.18 in conjunction with IFRS
3.4 et seq.


The acquisition method is based on the fictitious concept that all identifiable assets and liabilities of the
entity to be consolidated are acquired separately. The cost of an acquisition is offset against the propor-
tionate equity of the entity to be consolidated, determined as of the date of acquisition, when it is first
consolidated and at identical values at the end of each subsequent reporting period in the context of sub-
sequent consolidations.


Intra-Group balances, transactions, and profits are eliminated. Business relations between entities in-
cluded in consolidation and any resulting receivables and liabilities as well as expenses and income are
eliminated as part of consolidation accounting.

December 31, 2011 is the reporting date for the financial statements of all entities included in consolida-
tion.



Basis of presentation


The consolidated financial statements of ING-DiBa AG have been prepared on a going concern basis. In-
come and expenses are ratably recognized in the income statement in the period to which they relate
(matching principle).


Recognition, measurement, and reporting policies are applied consistently.


IFRS accounting requires the Company's management to make estimates and exercise judgment that affect
the recognition and measurement of assets and liabilities and of expenses and income. These estimates
and judgments are supported by such data and empirical values that are useful in the given context. Simi-
lar to the background information used, they are subject to continuous review.


The notes to the consolidated statement of financial position and to the consolidated income statement
and statement of comprehensive income report the respective methods used. Reference is made to any
significant effect management judgment may have on the presentation of the net assets, financial position
and results of operations.



Financial instruments



Financial assets and financial liabilities


A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.


In these financial statements, financial instruments are recognized in particular in the following accounts:
                                                    F-70




   •     Cash reserve

   •     Loans and advances to banks

   •     Loans and advances to customers

   •     Financial investments

   •     Derivatives with positive fair value

   •     Securitized liabilities

   •     Deposits from banks

   •     Due to customers

   •     Derivatives with negative fair value



Date of recognition


Financial instruments in the available-for-sale (AfS) and held-to-maturity (HtM) categories and derivatives
are recognized in the statement of financial position on the trade date. Financial instruments in the loans
and receivables (LaR) measurement category and non-derivative financial liabilities are recognized as of the
settlement date.



Derecognition


In principle, a financial asset is derecognized when the right to receive cash flows from the respective fi-
nancial asset has expired or substantially all risks and rewards from the asset have been transferred.


If substantially all risks and rewards of ownership of the financial asset are neither retained nor transferred,
the asset is derecognized if the Group has lost the ability to exert control over the asset.


However, if the Group retains control even after transfer, the financial instrument is recognized to the
extent the Group has retained control (recognition in the amount of the continuing involvement). Please
see note 24 for specific details.


A financial liability may only be derecognized if the contractual obligations have been met, revoked, or have
expired.



Offsetting


Financial instruments are offset in accordance with IAS 32.42, if a legally enforceable right to do so exists
and there is an intention to settle on a net basis or to liquidate the relevant asset against the associated
liability simultaneously.
                                                       F-71




Initial recognition


Financial instruments are initially recognized at their fair values. Normally, this corresponds to the fair
value of the consideration, referred to as transaction price. In the case of financial instruments that do not
belong to the "at fair value through profit or loss" (FVTPL) category, transaction costs as defined in IAS
39.AG13 are also included.



Categorization and subsequent measurement of financial assets

The subsequent measurement of financial assets depends on the category to which they have been as-
signed. IAS 39.9 specifies these as

    •     Financial assets at fair value through profit or loss (FVTPL),

    •     Held-to-maturity (HtM) investments,

    •     Loans and receivables (LaR),

    •     Available-for-sale (AfS) financial assets.




Financial assets at fair value through profit or loss (FVTPL)


Financial instruments in the FVTPL category are subsequently measured at their fair values. Any changes in
fair value are immediately recognized through profit or loss.


This category has the "held for trading" and "fair value option" subcategories.


The "held for trading" subcategory only contains derivatives not accounted for under the special hedge
accounting rules of IAS 39. ING-DiBa does not hold any financial instruments for trading as defined in IAS
39.9, Definition of four categories of financial instruments, letter a items (i) and (ii).


The "fair value option" possible under IAS 39, which allows instruments to be allocated to the FVTPL cate-
gory under certain conditions, was not exercised during the periods under review.


This means that the group of financial instruments measured at fair value through profit or loss is made up
exclusively of derivatives not designated as hedging instruments.


The resulting measurement gains or losses are included in the measurement gains or losses caption (note
33), but the associated interest income and expense is reported under net interest income (note 31).


The respective derivatives are reported under "Derivatives with positive fair value" (note 6) or "Derivatives
with negative fair value" (note 17).
                                                   F-72




Held-to -maturity
Held -to-maturity (HtM) investments


Non-derivative financial assets with a fixed maturity that result in fixed or determinable claims for pay-
ment are assigned to the held-to-maturity category, if there is a firm intention to hold them to maturity.


HtM securities are subsequently measured at amortized cost, calculated using the effective interest
method.


The interest calculated in this way is recognized under net interest income (note 31).


HtM securities are only included in the financial investments account (note 5).




Loans and receivables (LaR)


ING-DiBa generally assigns non-derivative financial assets that have fixed or determinable claims for pay-
ment but are not traded in an active market to the loans and receivables category.


They are generally subsequently measured at amortized cost, calculated using the effective interest
method, less any necessary impairment allowances.


The interest income is allocated to the period in which it accrues; it is recognized under net interest in-
come (note 31). The loans and receivables category includes in particular balances with central banks under
the cash reserve (note 1), loans and advances to banks (note 2), and loans and advances to customers
(note 3).


Where the instruments have been allocated to the "available-for-sale" (AfS) category, which is also possible,
this is shown in the notes to the individual accounts.




Available-for -
Available -for-sale (AfS) financial assets


The available-for-sale category primarily contains debt instruments not assigned to any of the above cate-
gories. They are reported in the financial investments account (note 5).


AfS financial instruments are in all cases initially recognized at fair value and subsequent changes in fair
value are taken directly to equity. The measurement gains or losses are recognized in the revaluation re-
serve until the asset is derecognized or an impairment allowance has to be recognized. The revaluation
reserve is part of equity.


Note 13 provides information on changes in the revaluation reserve.


As soon as AfS financial instruments are derecognized or written down for impairment, the changes in fair
value accumulated up to then in the revaluation reserve are reclassified to other gains/losses on financial
investments and investment property (note 34).
                                                      F-73




The interest income is allocated to the period in which it accrues; it is recognized in the Bank's net interest
income. It is based on book interest under amortization of premiums and discounts.


In addition, ING-DiBa AG holds a limited number of immaterial equity investments, which are not relevant
for the net assets, financial position and results of operations. These equity instruments are treated as
financial investments and are allocated to the available-for-sale (AfS) category in accordance with IAS 39.
The shares are not held for trading. To the extent these equity investments are not listed and it is not pos-
sible to reliably measure their fair value, they are recognized at cost (note 5).


Dividends from AfS equity investments are recognized under other gains or losses on financial investments
and investment property (note 34).



Reclassifications


The general rule is that financial instruments have to be allocated to one of the categories defined in IAS
39.9 on initial recognition and kept in this category for subsequent measurement. IAS 39 permits reclassi-
fications from one financial instrument category to another only in a few exceptional circumstances. No
reclassifications were made in fiscal year 2011. During the prior fiscal year, 2010, Greek government bonds
with a volume of EUR 282 million were reclassified from "held-to-maturity" to "available-for-sale".



Financial liabilities


After initial recognition at their fair values, ING-DiBa carries all financial liabilities at amortized cost. The
fair value option is not exercised in this case either.


Liabilities are only measured at their fair values through profit or loss where derivatives are accounted for
without using hedge accounting.


In ING-DiBa's consolidated financial statements, the financial liabilities subsequently measured at amor-
tized cost are reported under securitized liabilities (note 14), deposits from banks (note 15), due to cus-
tomers (note 16), and other liabilities (note 21).



Valuation techniques



Fair value measurement


Fair value is the amount at the reporting date for which a financial asset could be exchanged, or a financial
liability settled, between knowledgeable, willing parties in an arm's length transaction, always assuming
that the entity continues as a going concern.


According to IAS 39, the value to be used by preference is the transaction price as of the end of the report-
ing period. If a publicly quoted market price from an active market is available, this is the best objective
indication of fair value. If it is not possible to sufficiently determine a market price due to inactive markets,
recent transactions or an indicative quote by a market maker may be used as the basis for calculating their
fair value. If such prices cannot be used, fair value is determined using the discounted cash flow method,
taking observable market parameters into account.
                                                   F-74




Note 30 provides comments on the methods used.



Amortized cost and effective interest method


Amortized cost is the amount at which a financial asset or financial liability is initially recognized, minus
principal repayments and any impairment losses, and plus or minus the cumulative amortization, calcu-
lated using the effective interest method, of any difference between the initial amount and the maturity
amount. The effective interest method is used to allocate interest income and interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts all expected future cash flows
to the current net carrying amount of the financial instrument through the expected life of this instrument,
taking into account all relevant transaction costs, fees, premiums and discounts.



Currency translation


ING-DiBa AG's foreign currency transactions relate primarily to monetary items.


Foreign currency transactions are initially recognized in the functional currency, the euro, by applying to
the foreign currency amount the spot exchange rate between the functional currency and the foreign cur-
rency at the date of the transaction. The Bank uses the European Central Bank's mean exchange rate for
this purpose.


The date of a transaction is the date on which the transaction first qualifies for recognition in accordance
with IFRS (trade or settlement date).


In subsequent periods, foreign currency monetary items are translated using the closing rate. Exchange
differences arising on the settlement of monetary items or on translating monetary items at rates different
from those at which they were translated on initial recognition during the period or in previous financial
statements are generally recognized in profit or loss in the period in which they arise. The exchange rates
applicable to the underlying transactions are used to translate foreign currency revenues and expenses.


Currency translation gains and losses are a component of other income.



                   impairment
Risk provision and impairment


Impairment is recognized if there are objective indications that the contractual cash flows can no longer be
generated in the manner agreed.


Allowances for losses on loans and advances as part of risk provision in the lending business are based on
an incurred loss model, i.e., the cause of the impairment, the loss event, must have occurred before the
reporting date.


This results in a two-level impairment process.


First, the existence of objective indications of impairment has to be investigated. Then it has to be estab-
lished whether an allowance should be recognized and in what amount.
                                                    F-75




The requirement to recognize an allowance for losses on loans and advances is established for individually
significant loans and advances and for groups of loans and advances of lesser significance. Individually
significant loans and advances are tested for impairment on a one-by-one basis. If the objective evidence of
impairment is not related to the individual, separately significant financial assets, they are combined in
portfolios with those loans and advances that are individually immaterial and are subject to a similar risk
profile. The whole group is then tested for impairment collectively. Loans and advances of lesser signifi-
cance are generally subject to portfolio testing. Financial assets for which individual allowances have to be
recognized are not subject to collectively assessed allowances.


To the extent it is not necessary to recognize allowances for significant individual loans, they are combined
in portfolios and subjected to a further impairment test at that level. If transactions do not feature similar
risk characteristics, they must not be combined into a portfolio. If the need arises to recognize an allow-
ance on a significant individual loan, it is removed from the portfolio and a specific valuation allowance is
recognized.


An allowance has to be recognized for a financial asset or group of assets if objective indications point to
future events after initial recognition that threaten to negatively affect the future cash flows from the re-
spective financial instruments. It must be possible to estimate the future impact sufficiently reliably.


Indications of a need to recognize an allowance in relation to individual financial assets or a group of assets
may include the following:

   •     There is an increased probability that the counterparty will become insolvent or start financial re-
         construction proceedings.

   •     There is already delay or default on interest or principal payments.

   •     The counterparty is in considerable financial difficulties, which may negatively impact future cash
         flows.

   •     Based on experience and current data, there are clear indications that part of a group of financial
         assets is substantively impaired, although it is too soon for the internal risk management system
         to capture these impairment triggers in respect to individual assets.


By contrast, events expected to occur only in the future are no basis for impairment.


In the case of impairment, loans and advances classified as LaR or HtM financial investments must be re-
ported in such a way that the difference between the carrying amount and present value of the expected
future cash flows, discounted using the original effective interest rate, accurately reflects the risk provision
expense.


The basis for determining the amount of the impairment allowance to be recognized is firstly the contrac-
tually agreed cash flows and secondly the defaults normally expected, based on experience, for similarly
structured products. The amounts determined on the basis of experience are reviewed with the help of
observable current data to eliminate the effects of factors and conditions relating to previous periods.


To determine the amount of impairment allowance to be recognized on a portfolio basis, financial instru-
ments with similar risk structures are combined. In this process, the risk profile provides information on
the current counterparty risk, and thus on the probability with which the counterparty will be able to gen-
erate the contractually agreed cash flows. The portfolio analysis includes a period analysis of the default
probabilities, which takes into account the intervening period that has to be considered between the oc-
currence of the impairment trigger and its detection by the risk management system. This method ensures
                                                    F-76




that impairment triggers that have already occurred but not yet been identified are adequately reflected in
the risk provision.


Allowances for losses on loans and advances to customers are deducted from assets. In the case of uncol-
lectible loans and advances, allowances are generally derecognized against the carrying amount of impaired
financial assets. Loans and advances are usually deemed uncollectible if no payment has been received in
the past twelve months, there is no expectation that there will be a change in solvency, the assets held as
collateral have been liquidated and enforcement measures have been taken, the borrower has submitted
an affidavit and a valuation allowance has been recognized in respect of the full loan and/or advance. Con-
sumer loans are generally written off prior to the expiry of twelve months if the borrower is deceased and
it was not possible to identify a successor or the successors have relinquished their inheritance. Recoveries
on loans and advances previously written off are recognized in the income statement.


Debit and credit card receivables are written down directly following a detailed investigation into a loss
event. The amount written down is the residual of the loss, less the customer's liability and any potential
insurance settlement.


No allowances on loans and advances to banks had to be recognized in the periods under review.


If the need to recognize an impairment allowance relates to an AfS financial investment, the accumulated
losses recognized directly in equity are derecognized from the revaluation reserve and released to profit
and loss.


If AfS equity instruments which are not listed on a stock exchange are recognized at cost because it is not
possible to reliably measure their fair value, the amount of a necessary impairment is calculated as the
difference between the carrying amount of the financial asset and the present value of estimated future
cash flows, which are discounted using the current market rate of return on a comparable financial asset.
No such impairments were recognized in fiscal years 2010 and 2011.

The two-level impairment process (test for indications of impairment, calculation of required impairment)
is also applied to foreign currency assets. The required impairment is calculated as follows: First the asset is
measured in a foreign currency. Next, the foreign currency amount is translated into the functional cur-
rency. On the one hand, the amount requiring impairment is calculated and on the other, it is verified
whether a currency-related impairment has occurred in connection with a permanent devaluation of the
currency.



Derivative financial instruments


Derivative financial instruments are used exclusively for risk management and duration control.


Primarily simply structured OTC interest rate swaps were entered into in the periods under review.


An insignificant amount of currency forwards were used in the corporate customer business to hedge ex-
change rate fluctuations. Hedge accounting was not applied to them.


Derivative financial instruments are initially recognized at fair value at the trade date. They are subse-
quently also measured at their fair values.


As OTC transactions, the derivatives are subject to the market-based mark-to-model valuation of level 2 of
the fair value determination described below (note 30).
                                                   F-77




Unless the derivatives are designated as hedging instruments, changes in fair value are fully recognized in
the income statement. These financial instruments are reported under derivatives with positive or negative
fair value, as appropriate (notes 6 and 17).



Embedded derivatives


An embedded derivative is a component of a structured financial instrument that, in addition to the de-
rivative, also includes a non-derivative host contract. There were no structured financial instruments that
had to be recognized separately in the periods under review.



Hedge accounting


To effectively hedge against interest rate risk, ING-DiBa makes specific use of simply structured interest
rate swaps, which hedge changes in the fair value of hedged items and fluctuations in their future cash
flows with offsetting cash flows.


The Bank accounts for hedges using hedge accounting for both fair value and cash flow hedges.


The hedging strategy is subject to strict documentation requirements. When designating a hedging rela-
tionship, the related hedged items and hedging instruments, the risk to be hedged, and the risk manage-
ment strategy are documented.


An important part of hedge accounting permitted for use in the financial statements is to successfully
measure effectiveness, which is done both ex ante and ex post. The hedges must be highly effective in ac-
cordance with the specified hedging strategy. To be permitted for inclusion in the financial statements,
hedge effectiveness must be in a range of between 80 and 125 percent.


The hedged items continue to be reported under the respective captions in the statement of financial
position, because the nature and function of the hedged item are not affected by the hedging relationship.
Note 23 shows the derivatives broken down by type of hedge. The interest accrued on hedged items and
hedging instruments is netted and recognized under net interest income (note 31).



Fair value hedge accounting


Through fair value hedging, the Bank hedges (portions of) recognized assets and liabilities against changes
in their fair values if they are due to interest rate risk. Hedged items may be individual items (micro fair
value hedging) or consist of entire portfolios (portfolio hedging).


ING-DiBa hedges transactions from the following measurement categories (hedged items):

   •     Financial instruments in the LaR category

   •     Financial instruments in the AfS category


Hedging instruments are measured at fair value and any changes in fair value are recognized through profit
or loss. The carrying amounts of the hedged items are also adjusted for fair value changes through profit or
loss if they are attributable to the hedged risk (hedge adjustments).
                                                   F-78




For hedges which are 100% effective, the net effect of this process is to offset changes in value attributable
to the hedged risk.


If only a portion of the risk exposure of the hedged item is hedged, the unhedged portion is accounted for
according to the policies that otherwise apply to this hedged item. If the hedged item is an AfS financial
instrument, the difference between the total change in fair value and the change in fair value attributable
to the hedged risk is recognized directly in the revaluation reserve under equity. The AfS financial instru-
ment is reported at full fair value.


Fair value hedging of interest rate risks is performed for both individual items (micro hedging) and for
portfolios (fair value portfolio hedging). In such cases, individual items of the portfolio are not designated
as items to be hedged. The effectiveness tests are conducted on the basis of assigned maturity bands. The
amount to be hedged and the hedging instruments are designated in each case for the duration of a hedg-
ing period. Under micro hedging, changes in the fair value of the hedged item which are attributable to the
hedged interest rate risks are allocated to the individual assets as a fair value adjustment. Under fair value
portfolio hedging, fair value adjustments are recognized separately in the statement of financial position
under adjustment to portfolio fair value hedges (note 4).


If a fair value hedge is terminated before the hedging instrument matures, the risk-related adjustments to
fair value included in the carrying amount of the hedged debt instrument are amortized over the remain-
ing maturity of the hedged item. If hedged items are sold, the fair value adjustments are taken into ac-
count when determining the net income from the sale.



Cash flow hedge accounting


A cash flow hedge hedges recognized assets and liabilities against future variability in cash flows that af-
fects profit or loss. ING-DiBa uses interest rate swaps for cash flow hedging to convert variable-rate items
into fixed-rate items, thus hedging against interest-driven variability in cash flows.


As part of this process, the hedged items continue to be measured according to their classification accord-
ing to IAS 39.9.


The hedging instruments are recognized at their fair values. The portion of the fair value changes of the
hedged items that is effective in relation to the hedged risk is recognized directly in the revaluation reserve
for cash flow hedges under equity (notes 13 and 23). Hedge ineffectiveness is the quantification of the
difference between the accumulated changes in the fair value of the hedge derivative used and the changes
in the fair value of a hypothetically perfect hedge. If the cash flow hedge is not 100% effective, but falls
within the effectiveness range required by IAS 39, the amount recognized in the equity account is the lower
of the accumulated changes in the fair value of the hedging instruments and the hedged cash flows.


If a hedged risk is no longer expected to occur, the amounts are released to the income statement imme-
diately.


If instruments to hedge interest-driven cash flow variability are terminated early, the amounts recognized
in equity are amortized as interest income over the remaining maturity of the original hedge.


For more information on hedge accounting, see notes 23 and 33.
                                                   F-79




Repo and reverse repo transactions


Because of the risks and rewards of ownership, securities that are part of repo transactions remain in ING-
DiBa's statement of financial position (note 24). The corresponding liabilities are reported as deposits from
banks, depending on the counterparty (note 15).


Because of the risk distribution, securities purchased under reverse repo transactions are not recognized in
the statement of financial position. The receivables from reverse repo transactions are reported under
loans and advances to banks (note 2) or under loans and advances to customers (note 3), likewise depend-
ing on the counterparty.



Financial guarantees


In accordance with IAS 39.9, a financial guarantee is a contract that requires the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment
when due in accordance with the original or modified terms of a debt instrument. Financial guarantees are
initially recognized by the guarantor at fair value. If the financial guarantee was issued to an unrelated
party in an arm's length transaction, its fair value at inception is generally equal to the premium received.
The subsequent measurement of guarantees by the guarantor must be based on the higher of the amount
determined in accordance with IAS 37 and the amount initially recognized less, when appropriate, cumula-
tive amortization recognized in accordance with IAS 18. If the premium is not paid at inception but rather
over the term of the guarantee, ING-DiBa presents it on a net basis, with the present value of the premium
offset against the present value of the obligation arising from the financial guarantee.


Financial guarantees are both issued and received in the course of corporate customer financing activities.
There are usually contingent assets in this event which, in accordance with IAS 37.31, may not be recog-
nized.



Classes of financial instruments under IFRS 7


IFRS 7 requires certain disclosures to be presented by class of financial instrument. They are related to the
nature of the information disclosed, which means that different classes may be formed for the respective
disclosures. Financial instruments in the same class have significant characteristics in common.

Financial instruments are classified by captions on the statement of financial position. Where necessary,
captions are further subdivided by measurement categories. Wherever appropriate, individual items are
aggregated or further broken down under line items in the statement of financial position. Financial guar-
antees, irrevocable loan commitments and derivatives used as hedges are presented as classes of their
own.



Other items



Investment property


Investment property refers to land and buildings leased to third parties. It also includes bail-out purchases,
although the Bank only holds a very small number of such properties. No property or equipment was reas-
signed from or to Group-occupied property and equipment in the fiscal years under review.
                                                    F-80




Investment property is measured at cost plus transaction costs on initial recognition. Subsequent expendi-
ture, incurred at a later date, that increases the potential future economic benefits of the property beyond
the original extent is also recognized as part of cost. Refurbishment work, on the other hand, is classified as
maintenance expense.


Investment property is subsequently measured at fair value through profit or loss. Fair value is determined
when there are objective indications of a change in value, but at least every five years, by independent
external experts.


Given the lack of comparability in the market, the external experts generally use the income capitalization
approach, under which the value is determined on the basis of discounted cash flows. This method takes
into account secure rental income up to the end of the agreed lease and normal expected market rents
and costs beyond that. In addition, it takes into account possible vacancies and other eligible losses of
rental income. The amounts calculated in this way are discounted using a market interest rate that takes
into account the special attributes of the property, such as its type and location.



Group -occupied property and equipment
Group-


Property and equipment (note 8) comprises Group-occupied land and buildings as well as operating and
office equipment, which includes in particular IT and telecommunication systems and office equipment.


Property and equipment is initially recognized at cost at the date that marks the transfer of beneficial
ownership.


Group-occupied land is measured using the revaluation method. At regular intervals of up to five years, and
when there are objective indications of a change in value, such as construction work, reports are prepared
by independent external experts who determine fair value using the income capitalization approach. This
method is the same as that explained under "Investment property" above and is therefore also subject to
the same type of estimates and management judgment.


Even when the revaluation method is used, the carrying amounts of Group-occupied properties are subject
to straight-line depreciation over their expected useful lives.


Operating and office equipment is subsequently measured at depreciated cost. The carrying amounts are
subject to straight-line depreciation over the useful lives of the assets. The IFRS component approach re-
quires individual components to be depreciated over their individual useful lives, irrespective of whether
their uses and functions are related.



Intangible assets


Intangible assets relate almost exclusively to software and software licenses.


They are eligible for recognition in the statement of financial position if they meet all of the following crite-
ria: they are identifiable, they can be measured reliably, they are expected to lead to future economic
benefits, and the company has control over this resource.


ING-DiBa has both purchased and internally generated intangible assets. They are initially recognized at
cost and subsequently measured at amortized cost. Useful lives of three years are normally assumed for
                                                      F-81




software. Intangible assets are amortized pro rata temporis. Amortization expense is included in "Other
administrative expenses" in the notes to the consolidated income statement (note 39).



Impairment of property and equipment and intangible assets


Once each asset has been depreciated or amortized, including a review of the method and useful life ap-
plied, each component must be tested for impairment as of the end of the respective reporting period.
Indications of impairment are, for example, if

   •        the market value of an asset has declined significantly more than would be expected as a result of
            normal use;

   •        significant changes with an adverse effect on the company have taken place or will take place in
            the technological, market, economic, or legal environment;

   •        market interest rates that affect the discount rate used in calculating an asset's value in use have
            increased and thus decrease the asset's recoverable amount materially as defined in the IFRS;

   •        there is substantial evidence of obsolescence or physical damage of an asset; or

   •        as a result of internal restructuring the asset is no longer suitable for generating benefits for the
            company in the same way as before or evidence is available that the economic performance of the
            asset is worse than expected.


If there are indications of impairment, the recoverable amount is determined and compared with the car-
rying amount. If the carrying amount exceeds the recoverable amount, an impairment loss must be recog-
nized. The recoverable amount is defined as the higher of the asset's fair value less costs to sell and its
value in use. Value in use is the present value of the future cash flows expected to be derived from the
asset, including disposal proceeds. The rate used for discounting is the market interest rate before tax that
reflects the interest effect and the specific risks of the asset. If the recoverable amount cannot be deter-
mined for the individual asset, an impairment test has to be performed at the level of the next higher cash
generating unit.


There were no indications of impairment of investment properties, Group-occupied properties, operating
and office equipment, and intangible assets in the periods under review.



Tax items


A profit and loss transfer agreement in accordance with section 291 (1) of the German Stock Corporation
Act (Aktiengesetz, "AktG") is in place between ING-DiBa AG and ING Deutschland GmbH. This agreement
forms the basis for a tax group for corporate income tax and trade tax purposes. Under this arrangement,
ING-DiBa is a tax group subsidiary and ING Deutschland GmbH is the tax group parent.


In accordance with the principle of substance over form, both the current and deferred income taxes are
disclosed in the IFRS consolidated financial statements by the entity responsible, ING-DiBa AG. In this area,
for which IFRS does not provide any guidance, ING-DiBa thus follows the interpretation of ASC 740 (US
GAAP).


Under the push-down method, corresponding deferred tax assets and liabilities are presented for the de-
ferred income taxes. The current income taxes paid by the tax group parent are presented as a capital con-
tribution by the tax group parent under other reserves.
                                                    F-82




As a separate taxable entity, the ING-DiBa Direktbank Austria branch is subject to Austrian tax law.


The tax assets (note 10) and tax liabilities (note 18) items comprise current tax assets and liabilities for the
current and previous fiscal years.


Future, and therefore deferred, tax effects arising from changes in carrying amounts are reported under
deferred tax assets (note 11) and deferred tax liabilities (note 19). The deferred tax effect is estimated on
the basis of temporary differences between the tax base and the carrying amount in the IFRS statement of
financial position, to which the operation's particular average tax rate is applied.


Depending on the treatment of the underlying item, deferred taxes are taken directly to the respective
equity account or recognized in profit or loss. If they are recognized in profit or loss, they are reported
under income tax (note 40) in the income statement.



Other assets


The other assets account (note 12) is used for accrued interest, accruals, and other assets. Following the
integration of the German branch of ING Bank N.V. into the subgroup, it became necessary to report plan
assets of pension plans (notes 12 and 20).


Accrued interest relates primarily to the presentation of interest on financial investments and derivatives
in the period to which it relates. It is generally determined on the basis of the effective interest method.


The other trade receivables and accruals included in this item are normally reported at their nominal val-
ues, which correspond to their fair values because the timings are close.



Provisions


Pension provisions (note 20) are recognized according to the projected unit credit method for defined
benefit pension plans. The calculation takes into account not only the present value of pension entitle-
ments earned, but also the as yet unrealized actuarial gains and losses arising from changes in the calcula-
tion parameters and irregularities in the risk development. Plan assets which must be integrated have
existed ever since the integration of the German branch of ING Bank N.V. The actuarial gains and losses are
treated in accordance with IAS 19.92. Under this method, known as the "corridor method", actuarial gains
and losses are only recognized in profit or loss if the total gains and losses as of the end of the reporting
period exceed the higher of 10 percent of the present value of the defined benefit obligation and 10 per-
cent of the fair value of plan assets. The excess amount is amortized over the remaining working lives of
employees and recognized in income.


The imputed interest rate for calculating the pension provisions is based on the long-term interest rate for
prime-rated fixed-income corporate bonds.


Actuarial reports are used to measure pension provisions as well as provisions for long-service bonuses
and partial retirement.


In addition to personnel provisions, there is a small amount of non-current provisions (note 20).
                                                   F-83




These include a provision for restructuring expenses, which was increased in the course of the current
Group restructuring.


The amount provided for is based on the best estimate of the settlement amount. Provisions are only dis-
counted, using interest rates for items with matching maturities applicable as of the end of the reporting
period, if the interest effect is material. Interest cost from the unwinding of the discount is in such cases
reported under net interest income (note 31). The interest effect is immaterial in the periods under review,
which means that no interest cost had to be added back to other non-current provisions.



Other liabilities


Other liabilities include above all interest accrued on deposits from banks, amounts due to customers,
derivatives and other financial liabilities, and allocated over the relevant periods.


Other components of this item are primarily short-term deferred income and accrued administrative ex-
penses. Since the interest effect is immaterial, these items are generally recognized at their nominal values.



Contingent liabilities


Contingent liabilities within the meaning of IAS 37 are reported off the statement of financial position, in
the notes to the IFRS financial statements (note 25). Their probability of occurrence is estimated to be
below 50 percent. The estimated settlement amounts are disclosed in the notes. They normally correspond
to the nominal amounts. Contingent liabilities relate primarily to irrevocable and revocable credit com-
mitments, guarantees and letters of credit.



Items in the statement of comprehensive income


Net
Ne t interest income


Interest income and expense (note 31) is recognized in profit or loss for the period. For loans and advances
on which impairment allowances have been recognized, the discount applied to arrive at the present value
as of the end of the subsequent reporting period is unwound through interest income.



Net commission income


Fee and commission income is generally recognized at the time the service is provided. Brokerage commis-
sion payable to sales partners is amortized over the relevant periods using the effective interest method.


Fees for payment transaction services between banks are recognized as commission income and expense.


Net commission income is explained in note 32.
                                                   F-84




Gains/losses on measurement of derivatives and hedged items


The gains/losses on measurement of derivatives and hedged items (note 33) include the changes in fair
value from the measurement of derivatives (whether or not they are designated as hedges) as well as of
hedged items.


In fair value hedges, the total changes in the fair values of the hedging instruments and those changes in
the fair values of the hedged items that relate to the hedged risk are recognized in profit or loss.


In the case of derivatives used in cash flow hedges, the ineffective portion of the amount of change is rec-
ognized in profit or loss.


Income is recognized in the period in which it is earned.



Additional information



Leasing obligations


A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of pay-
ments the right to use an asset for an agreed period of time. The determination as to whether an arrange-
ment is or includes a lease must be based on the substance of the arrangement, and requires an assess-
ment as to whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets
and whether the arrangement conveys a right to use the asset. The assessment of whether an arrangement
contains a lease shall be made at the inception of the arrangement, being the earlier of the date of the
arrangement and the date of commitment by the parties to the principal terms of the arrangement, on the
basis of all of the facts and circumstances. In the event of a change in the contractual terms of an arrange-
ment which go beyond a renewal or extension of the arrangement, the lease must be reassessed. The same
applies whenever there is a change in the determination of whether fulfillment is dependent on a specified
asset or if there is a substantial change to the asset. A reassessment must also be made if a renewal option
is exercised or an extension is agreed to by the parties to the arrangement, unless the term of the renewal
or extension had initially been included in the lease term. A renewal or extension of the arrangement that
does not include modification of any of the terms in the original arrangement before the end of the term
of the original arrangement shall be evaluated in accordance with IFRIC 4.6-9 only with respect to the
renewal or extension period.


A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an
asset. Legal title may or may not eventually be transferred. An operating lease is a lease other than a fi-
nance lease.


ING-DiBa AG only operates as a lessee. All leases are classified as operating leases. The useful lives of the
leased assets, market price assumptions, and discount rates are subject to management judgment. Lease
installments are recognized under other administrative expenses. Note 27 provides a summary of expected
future lease installments.
                                                   F-85




Disclosures related to commercial law


Where the notes to the IFRS financial statements require additional disclosures because of HGB, they are
made on the basis of figures determined according to IFRS. This applies in particular to the different pres-
entations of payments to members of executive bodies (note 29).



Material estimates and uses of judgment


Estimates and judgment used in fair value measurement of financial instruments


In specific cases, the decision as to whether an active market exists and valuations can be based on market
prices or whether no active market exists and a valuation model must be used is subject to the discretion
of the Bank, which also has discretion over the valuation model and parameters selected.


In illiquid markets or markets with significantly declining liquidity, the prices quoted for the same financial
instrument may vary widely, depending on the source. The selection of the most appropriate result within
this range requires management judgment. Depending on the decision, there may be significant variances
in the fair value derived.


Plausibility checks are performed to ensure that the measurements lead to reasonable fair values and have
the appropriate effect on the operating profit or loss.



Estimates and judgment used to determine risk provision and impairment


The measurement of impairment allowances requires a considerable amount of assessments that man-
agement has to make in relation to, among other things, the overall portfolio risk, current market devel-
opments and experience gathered in past periods. Over time, these assessments may be subject to change
and require the impairment allowance to be adjusted.


Both determining that there is an impairment trigger and measuring the allowance are subject to judg-
ment, and any changes in decisions based on such judgment may have a significant impact on individual
cases. For example, the decision reflects not only observable market data, but also assumptions about the
financial standing of the contracting party, expected future cash flows, and achievable net selling prices.


The future cash flows of a portfolio of financial instruments that are collectively assessed for impairment
are estimated firstly on the basis of the contractual cash flows and secondly on the basis of experience
regarding the performance of portfolios with comparable credit risks. The amounts based on past experi-
ence are in turn adjusted for conditions that are no longer applicable and brought up to date by using
observable market data.


To keep to a minimum any variances between impairment allowances recognized and the losses actually
incurred, the method and parameters are subject to regular review.



Other material estimates and uses of judgment


The measurement of financial guarantees issued requires the use of judgment and estimates.
                                                    F-86




The valuation of investment property requires considerable estimates and management judgment, which
have a direct impact on the income statement when there are any changes.


Estimates and management judgment are required to determine useful lives and to allocate depreciation
charges for equipment and Group-occupied property between accounting periods. Any changes in deci-
sions based on estimates and management judgment can have an impact on the income statement and
thus on operating profit or loss.


Like the useful lives applied and the choice of the straight-line method of amortization, the cost of intangi-
ble assets is subject to estimates and management judgment in line with their specific operational use.


Even ING-DiBa's decisions not to recognize impairment losses on property and equipment and intangible
assets are based on estimates and management judgment, and changes in such decisions could have an
impact on the presentation of net assets, financial position, and results of operations.


Decisions based on judgment also include estimates relating to deferred tax effects. This is estimated on
the basis of temporary differences between the tax base and the carrying amount in the IFRS statement of
financial position, to which the operation's particular average tax rate is applied.


The actuarial calculations for personnel provisions make use of parameters based on judgment.


For other provisions and contingent liabilities not recognized in the statement of financial position, esti-
mates and judgment-based decisions relate in particular to probabilities and settlement amounts.



Events after the end of the reporting period


The latest developments regarding the trimming of Greek debt will not have any noteworthy effect on the
Bank's net assets, financial position and results of operations in the current fiscal year.


There were no further significant events after the close of the fiscal year.
                                                                F-87




Disclosures relating to changes in reporting standards


The following Standards, Interpretations, and Amendments to existing Standards are applicable as of fiscal
year 2011:

                                                                       Date          Date          Published in
                                                                       application   application   the Official
                Last
Standard                    English title        German title          becomes       becomes       Journal of the
                amended
                                                                       mandatory     mandatory     European
                                                                       (IASB)        (EU)          Union
                            Presentation of
                                                 Darstellung des
IAS 1           rev. 2010   Financial                                  01.01.2011    01.01.2011    19.02.2011
                                                 Abschlusses
                            Statements
                            The Effects of     Auswirkungen von
IAS 21          rev. 2010   Changes in Foreign Wechselkursänderun 01.07.2010         01.07.2010    19.02.2011
                            Exchange Rates     gen
                                               Angaben über
                                               Beziehungen zu
                            Related Party
IAS 24          rev. 2009                      nahestehenden      01.01.2011         01.01.2011    20.07.2010
                            Disclosures
                                               Unternehmen und
                                               Personen
                            Consolidated and
                                               Konzern- und
IAS 27          rev. 2009   Separate Financial                    01.01.2011         01.01.2011    20.07.2010
                                               Einzelabschlüsse
                            Statements

                            Consolidated and
                                                 Konzern- und
IAS 27          rev. 2010   Separate Financial                         01.07.2010    01.01.2011    19.02.2011
                                                 Einzelabschlüsse
                            Statements
                                                 Anteile an
                            Investments in
IAS 28          rev. 2010                        assoziierten        01.07.2010      01.07.2010    19.02.2011
                            Associates
                                                 Unternehmen
                                                 Anteile an
                            Interests in Joint
IAS 31          rev. 2010                        Gemeinschaftsuntern 01.07.2010      01.07.2010    19.02.2011
                            Ventures
                                                 ehmen
                            Financial
                                                 Finanzinstrumente:
IAS 32          rev. 2009   Instruments:                               01.02.2010    01.02.2010    24.12.2009
                                                 Darstellung
                            Presentation
                            Financial
                                                 Finanzinstrumente:
IAS 32          rev. 2010   Instruments:                               01.07.2010    01.07.2010    19.02.2011
                                                 Darstellung
                            Presentation
                            Interim Financial    Zwischenberichtersta
IAS 34          rev. 2010                                             01.01.2011     01.01.2011    19.02.2011
                            Reporting            ttung
                            Financial
                                                 Finanzinstrumente:
                            Instruments:
IAS 39          rev. 2010                        Ansatz und            01.07.2010    01.07.2010    19.02.2011
                            Recognition and
                                                 Bewertung
                            Measurement
                                                Erstmalige
                            First-time Adoption
                                                Anwendung der
                            of International
IFRS 1          rev. 2010                       International          01.07.2010    01.07.2010    01.07.2010
                            Financial Reporting
                                                Financial Reporting
                            Standards
                                                Standards
                                                Erstmalige
                            First-time Adoption
                                                Anwendung der
                            of International
IFRS 1          rev. 2009                       International          01.07.2010    01.07.2010    24.07.2010
                            Financial Reporting
                                                Financial Reporting
                            Standards
                                                Standards
                                                Erstmalige
                            First-time Adoption
                                                Anwendung der
                            of International
IFRS 1          rev. 2010                       International          01.01.2011    01.01.2011    19.02.2011
                            Financial Reporting
                                                Financial Reporting
                            Standards
                                                Standards
                                                                    F-88




                                                                            Date          Date           Published in
                                                                            application   application    the Official
               Last
Standard                     English title           German title           becomes       becomes        Journal of the
               amended
                                                                            mandatory     mandatory      European
                                                                            (IASB)        (EU)           Union

                             Business                Unternehmens-
IFRS 3         rev.2010                                                     01.07.2010    01.07.2010     19.02.2011
                             Combinations            zusammenschlüsse
                             Financial
                                                     Finanzinstrumente:
IFRS 7         issued 2009   Instruments:                                   01.01.2009    01.07.2010     01.07.2010
                                                     Angaben
                             Disclosures
                             Financial                                                    01.07.2010
                                                     Finanzinstrumente:
IFRS 7         rev. 2010     Instruments:                                   01.07.2010    bzw.           19.02.2011
                                                     Angaben
                             Disclosures                                                  01.01.2011
                             Operating
IFRS 8         rev. 2009                             Geschäftssegmente      01.01.2011    01.01.2011     20.07.2010
                             Segments
                             Customer Loyalty        Kundenbindungs-
IFRIC 13       rev. 2010                                                    01.01.2011    01.01.2011     19.02.2011
                             Programmes              programme
                                                     IAS 19: Die
                             IAS 19: The Limit of
                                                     Begrenzung eines
                             a Defined Benefit
                                                     leistungsorientier-ten
                             Asset, Minimum
IFRIC 14       rev. 2009                             Vermögenswertes,       01.01.2011    01.01.2011     20.07.2010
                             Funding
                                                     Mindestdotierungs-
                             Requirements and
                                                     verpflichtungen und
                             their Interaction
                                                     ihre Wechselwirkung

                             Extinguishing           Tilgung finanzieller
                             Financial Liabilities   Verbindlichkeiten
IFRIC 19       issued 2009                                                  01.07.2010    01.07.2010     24.07.2010
                             with Equity             durch Eigenkapital-
                             Instruments             instrumente




No material impact on equity or profit or loss for the year can be detected as a result of these changes.
There was no significant expansion of disclosures in these financial statements.


The following revised Standard has already been adopted into EU law and is relevant as follows for future
reporting periods. It was not applied early.


                                                                                   Date            Date               P ublished in
                                                                                   applicatio n    applicatio n       the Official
                 Last
Standard                         English title            German title             beco mes        beco mes           Jo urnal o f
                 amended
                                                                                   mandato ry      mandato ry         the Euro pean
                                                                                   (IA SB )        (EU)               Unio n

                                 Financial
                                                          Finanzinstrumente:
IFRS 7           rev. 2010       Instruments:                                      01.07.2011      01.07.2011             1 1
                                                                                                                      23.1 .201
                                                          A ngaben
                                 Disclo sures




The amendments to IFRS 7 adopted by the European Commission will have an impact on financial report-
ing beginning in fiscal year 2012. They stipulate comprehensive new qualitative and quantitative disclo-
sures regarding transferred financial assets which are not derecognized in their entirety and regarding any
continuing involvement as of the reporting date in relation to transferred and derecognized financial as-
sets. The amendments are expected to further enhance disclosures about financial instruments. However,
they will not affect the recognition and measurement of assets and liabilities in the consolidated financial
statements or profit or loss in future fiscal years.


Some (amendments to) Standards have not yet been adopted into European law.


Based on the current business profile of ING-DiBa, IFRS 9 in particular is expected to have a significant
impact.
                                                     F-89




In April 2009, the IASB presented a time schedule for completely revising IAS 39 in three phases (classifica-
tion and measurement, impairment and hedge accounting). As a result, IAS 39 will be replaced by IFRS 9. In
the first phase, the guidance on the classification and measurement of financial assets was revised and the
IASB has now published the approved revisions in the new IFRS 9. On December 16, 2011, the IASB pub-
lished amendments to IFRS 9 "Financial Instruments", which amends the effective date of IFRS 9 to annual
periods beginning on or after January 1, 2015. Furthermore, the provisions relating to comparative figures
and the associated disclosures in IFRS 7 were modified.


IFRS 9 reduces to two the number of classifications for subsequent measurement of financial assets: those
measured at amortized cost and those measured at fair value.


The starting points for classification are the criteria of the "at amortized cost" category. Financial assets may
only be measured at amortized cost if the objective of the entity's business model is to hold the financial
asset to collect the contractual cash flows. Another condition is that the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal outstanding. The interest must reflect the time value of money and the credit risk. Financial as-
sets that do not meet these criteria must be measured at fair value. Changes in value must be fully recog-
nized in profit or loss. There is an exception stipulated for equity instruments not held for trading. Meas-
urement gains and losses for these instruments may optionally be recognized under equity. In spite of this,
the entity may still choose to use the fair value option, but under different conditions.


The decision to opt for a certain business model will not depend on management's intentions at the level
of a single financial instrument, but will be taken at a higher aggregate level. The analysis of the classifica-
tion options for securitizations requires a review of the properties of the underlying financial asset.


With respect to financial liabilities for which the fair value option has been exercised, IFRS 9 stipulates that
a distinction be drawn in terms of changes in value: Any change in fair value triggered by the entity's own
credit risk are recognized in other comprehensive income, i.e., directly in equity, unless this presentation
would lead to an accounting mismatch. Changes in value not resulting from the entity's own credit risk will
still be recognized through profit or loss under IFRS 9, as was the case before.


Other aspects being discussed in connection with IFRS 9 are a complete revision of the impairment meth-
odology for financial instruments and a reform of hedge accounting.


ING-DiBa is currently examining the possible impact of implementing the revised Standard. The full picture
will only become evident once all IASB subprojects aimed at successively replacing IAS 39 have been com-
pleted.


The adoption of IFRS 10 "Consolidated Financial Statements" effectively amended and renamed IAS 27
"Consolidated and Separate Statements", which now contains the unamended provisions relating to sepa-
rate financial statements. The objective of IFRS 10 is to establish principles for the presentation and prepa-
ration of consolidated financial statements when a parent entity controls one or more other entities. IFRS
10 establishes control as the sole basis for consolidation, regardless of the nature or background of the
investee. As a result, IFRS 10 replaces the risks and rewards approach used under SIC-12. SIC-12 "Consolida-
tion – Special Purpose Entities" is superseded in its entirety. IFRS 10 defines three cumulative components
of control: An entity must have power over the investee, it must be exposed or have rights to variable re-
turns from its involvement with the investee, and it must have the ability to use its power over the inves-
tee to affect the amount of the investor's returns. An investor must consider all relevant facts and circum-
stances when assessing whether it controls an investee. The Standard also provides guidance on assessing
control relationships and accounting rules relating to the presentation of consolidated financial state-
ments.
                                                    F-90




IFRS 11 "Joint Arrangements" governs the accounting treatment of items when an entity exercises joint
control over a joint venture or joint operation. The core principle of IFRS 11 is that a party to a joint ar-
rangement determines the type of joint arrangement in which it is involved by assessing its rights and
obligations and accounts for those rights and obligations in accordance with that type of joint arrange-
ment. A joint operator accounts for the assets, liabilities, revenues and expenses relating to its involvement
in a joint operation in accordance with the relevant IFRS while a joint venturer recognizes its interest in a
joint venture using the equity method in accordance with the revised IAS 28 (revised in 2011, "Investments
in Associates and Joint Ventures"). Thus, the option of proportionate consolidation of joint ventures will no
longer be available in the future. IFRS 11 supersedes IAS 31 "Interests in Joint Ventures" and SIC-13 "Jointly
Controlled Entities – Non-Monetary Contribution by Venturers", which had previously contained the rele-
vant provisions for accounting for joint ventures. Going forward, joint ventures will be accounted for solely
using the equity method.


Following the publication of IFRS 10 and IFRS 11, IAS 28 "Investments in Associates" was revised accordingly
and renamed IAS 28 "Investments in Associates and Joint Ventures".


IFRS 12 "Disclosures of Interests in Other Entities" pertains to disclosures in the notes regarding accounting
issues arising from IFRS 10 and IFRS 11. IFRS 12 is a comprehensive standard relating to disclosures in the
notes regarding interests in subsidiaries, joint arrangements, associates and unconsolidated structured
entities. Many of the required disclosures were adopted from IAS 27, IAS 28 or IAS 31, although other new
required disclosures were added.


The Bank's Corporate Accounting department is currently reviewing the significance of the impacts of these
changes.


The new IFRS 13 "Fair Value Measurement" establishes a single comprehensive framework for measuring
fair value where that is required by other Standards, and applies to both financial and non-financial items
measured at fair value. The Standard defines fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Fair value is thus also referred to as the exit price. The Standard also identifies key measurement
attributes which an entity must determine in order to appropriately measure fair value in accordance with
IFRS 13. In particular, entities must determine the unit of account to be subjected to fair value measure-
ment, the principal market in which a proper transaction would take place, and the assumptions made by
market participants in measuring fair value. In addition, the best use of non-financial assets must be de-
termined, i.e., whether they should be used individually or together with other assets or liabilities. IFRS 13
stipulates three valuation techniques to be used if no directly observable transactions are available for use
in measurement. The valuation technique selected should be consistent and based to the greatest extent
possible on relevant observable valuation parameters.


It is not expected that the impacts of IFRS 13 will be significant as compared to the currently existing fair
value measurement.


In June 2011, the IASB published amendments to IAS 1 "Presentation of Financial Statements". The amend-
ments addressed the rules for grouping items of other comprehensive income.


Amendments to IAS 12 "Deferred Tax: Recovery of Underlying Assets" relate to the accounting for deferred
taxes on investment property and where either no income tax is levied on capital gains, or a tax rate that
deviates from the usual rate is used. SIC-21 "Income Taxes – Recovery of Revalued Non-Depreciable Assets"
is superseded in this context.


IAS 19 "Employee Benefits" (issued 2011) is aimed at replacing the existing recognition options for actuarial
gains and losses with an immediate recognition requirement. Actuarial gains and losses and unvested
                                                   F-91




service costs shall no longer be recognized off the statement of financial position pro rata temporis, but
instead immediately in the statement of financial position and be reported in other comprehensive in-
come. The amendment stipulates the disaggregation of pension costs and plan assets.


On December 16, 2011, the IASB published the revised IAS 32 "Financial Instruments: Presentation" and, in
that context, a revised IFRS 7 "Financial Instruments: Disclosures" regarding rules for offsetting financial
instruments. Financial instruments may only be offset when an entity currently has a legally enforceable
right to set off the amounts on the one hand, and intends either to settle on a net basis, or to realize the
asset and settle the liability simultaneously on the other hand. The amendments to IAS 32 clarify the terms
"currently" and "simultaneously". New disclosures in IFRS 7 are intended to facilitate reconciliation between
gross and net items for financial instruments. The disclosures relate to financial instruments which have
been offset and those which have not. The revised IFRS 7 also contains disclosures relating to financial
instruments which are subject to global netting agreements or similar arrangements. Subject to endorse-
ment by the EU, the IASB intends for IFRS 7 to be mandatory beginning in fiscal year 2013 and IAS 32 in
fiscal year 2014.


The Bank is currently reviewing the significance of the impacts of these Standards on its net assets, finan-
cial position, and results of operations, and on its reporting and disclosure requirements.


The expected revisions to IFRS 1 "Amendments: Severe Hyperinflation and Removal of Fixed Dates for First-
Time Adopters" and IFRIC 20 "Stripping Costs in the Production Phase of a Surface Mine" will not be of
relevance to ING-DiBa.


There are also a number of IASB Exposure Drafts on various international accounting issues, which will
attain the status of approved IFRSs in coming reporting periods. Subject to their being adopted into EU
law, they are expected to result in extensive changes.
                                                    F-92




Notes to the consolidated statement of financial position


( 1) Cash reserve

                                                                      12/31/2011           12/31/2010
                                                                            €m                   €m
Cash balance                                                                 78                   92
B alances with central banks                                              2,705                1,325
To tal                                                                    2,783                  ,41
                                                                                                1 7



This item comprises balances with central banks in the European Central Bank System and all cash in the
ATM network.

In fiscal year 2011, the central banks played an increasing role as a safe investment alternative.



( 2) Loans and advances to banks

                                                                      12/31/2011           12/31/2010
                                                                            €m                   €m
P ayable o n demand                                                       3,061                2,197
Other lo ans and advances                                                 2,730                6,512

A llo wance                                                                   0                      0
To tal                                                                    5,791                8,709




All loans and advances to banks are classified as loans and receivables as defined in IAS 39.9. The change in
volume was due primarily to repayments and alternative reinvestment with an improvement in risk expo-
sure.


It is expected that, of the loans and advances to banks as of December 31, 2011, an amount of EUR 875
million will only be realized or settled after 12 months (December 31, 2010: EUR 1,972 million).


No allowances on loans and advances to banks had to be recognized in the fiscal years under review.


The interest accrued on this item is reported under other assets (note 12).


The loans and advances to banks include cash collateral provided for repo transactions of EUR 0 million
(December 31, 2010: EUR 4 million) and for derivatives (notes 6 and 17) of EUR 3,030 million (December 31,
2010: EUR 2,170 million). Please refer to note 24 for information on collateral provided.



Subordinated loans and advances

No subordinated loans or advances were granted in the periods under review.
                                                               F-93




                              transactions
Receivables from reverse repo transactions


Loans and advances to banks also include receivables from reverse repo transactions. They are in each case
related to securities lodged as collateral (note 5). At the end of the year under review (December 31, 2011),
they amounted to EUR 1,202 million (December 31, 2010: EUR 4,109 million). For more information on
repo transactions, refer to notes 5 and 15.



( 3) Loans and advances to customers

                                                                                 12/31/2011   12/31/2010
                                                                                       €m             €m
Mortgages                                                                           56,586          51,550
Consumer loans                                                                       3,320           2,839
Public sector loans and other loans and advances                                     3,945           5,294
Corporate loans                                                                       1,598             0
Asset-backed securities (ABS) / mortgage-backed securities (MBS)                      9,776          3,485
Loans and advances to customers before risk provision                                75,225         63,168
Portfolio-based impairment allowances                                                 – 117          – 112

Specific impairment allowances including those calculated on a portfolio basis       – 376           – 361

Loans and advances to customers after risk provision                                74,732          62,694


It is expected that, of the loans and advances to customers as of December 31, 2011, an amount of EUR
67,547 million will not be realized or settled within 12 months (December 31, 2010: EUR 55,387 million).


All loans and advances to customers are classified as loans and receivables as defined in IAS 39.


The item includes cash collateral provided for derivatives (notes 6 and 17) of EUR 27 million (December 31,
2010: EUR 24 million). No cash collateral had been issued for repo transactions as of the end of the report-
ing periods.


EUR 2,265 million in real estate loans was allocated to the cover pool for the Pfandbrief (mortgage bond)
issued for the first time in 2011 (note 14).


The loans and advances to customers included a volume of EUR 1,648 million (December 31, 2010: EUR
1,646 million) pledged as collateral as part of transactions with the KfW development bank (Kreditanstalt
für Wiederaufbau).


Note 24 provides a summary of the collateral provided.


Loans to corporate customers result from the integration of the German branch of ING Bank N.V. and new
loan agreements in the Commercial Banking business segment acquired.


The increase in the volume of asset-backed securities (ABS) / mortgage-backed securities (MBS) was at-
tributable primarily to targeted investments in Dutch residential mortgage- backed securities.


The interest accrued on these items is reported under other assets (note 12).
                                                                   F-94




                                               custom
Allowances for losses on loans and advances to customers


                                                                                       12/31/2011                   12/31/2010
                                                                                              €m                          €m
Mortgages                                                                                   – 357                       – 335
Consumer loans                                                                              – 129                       – 138
Public sector loans and other loans and advances                                                0                           0
Corporate loans                                                                                –7                         –0
Asset-backed securities (ABS) / mortgage-backed securities (MBS)                              –0                            0
Total                                                                                       – 493                       – 473
                                                                                                 0
Loans and advances to customers before risk provision                                       75,225                     63,168
Risk provision                                                                              – 493                       – 473
Loans and advances to customers after risk provision                                        74,732                     62,694



In accordance with IAS 39.59, an allowance for losses on loans and advances is recognized if there is objec-
tive evidence that an impairment loss has already arisen in the period under review as a result of an event
that occurring after initial recognition of the asset and this loss event has an impact on the expected future
cash flows.



                                    loans
Changes in allowances for losses on loans and advances to customers


                                                                                            Specific impairment
                                                                          Portfolio-based
                                                                                           allowances including
                                                                             impairment                                          Total
                                                                                          those calculated on a
                                                                              allowances
                                                                                                  portfolio basis


                                                                                    2011                    2011                  2011
                                                                                     €m                     €m                    €m
Balance on Jan. 1                                                                   – 112                  – 361                 – 473
Merger / changes in Group structure                                                   –1                    – 20                  – 21
Utilization of existing impairment allowances                                          0                      82                   82
Additions to / disposals from risk provision                                          –4                    – 76                 – 80
Other changes                                                                        –0                      –1                    –1
Balance on Dec. 31                                                                  – 117                  – 376                 – 493


                                                                                    2010                   2010                  2010
                                                                                     €m                     €m                    €m
Balance on Jan. 1                                                                   – 82                   – 314                 – 396
Merger / changes in Group structure                                                    0                       0                    0
Utilization of existing impairment allowances                                          0                      46                   46
Additions to / disposals from risk provision                                        – 29                    – 94                 – 123
Other changes                                                                         –2                       1                   –0
Balance on Dec. 31                                                                   -112                   -361                  -473




Expenses of EUR 77 million arising from risk provision were recognized in the income statement (previous
year: EUR 127 million). Note 36 provides information on expenses arising from risk provision.


As of August 31, 2011, the integration of the German branch of ING Bank N.V. resulted in the addition of
EUR 21 million to allowances for losses on loans and advances to customers. Accordingly, the change in this
amount relates to the period subsequent to that date.
                                                  F-95




( 4) Adjustment to portfolio fair value hedges

                                                                    12/31/2011          12/31/2010
                                                                          €m                  €m
A djustment to po rtfo lio fair value hedges                            2,366                ,
                                                                                            1665
To tal                                                                  2,366               1,665




This item represents the adjustment to the present value of loans and advances to customers included in
portfolio fair value hedge accounting.


Out of the adjustment to portfolio fair value hedges as of December 31, 2011, an amount of EUR 2,350 mil-
lion is only expected to be realized or settled after 12 months (December 31, 2010: EUR 1,647 million).

The hedged items are reported under note 3 (Loans and advances to customers). Further information can
be found under notes 23 (Hedge accounting), 6 (Derivatives with positive fair value), 17 (Derivatives with
negative fair value) and 33 (Net gains/losses on measurement of derivatives and hedged items).



( 5) Financial investments


This item primarily includes bonds and other fixed-income securities in the available-for-sale and held to
maturity categories.

                                                                    12/31/2011          12/31/2010
                                                                          €m                  €m
Available-for-sale

  Bonds and other fixed-income securities                              16,556               13,177

  Equity investments                                                        3                    1
Total AfS                                                              16,559               13,178

Held to maturity
  Bonds and other fixed-income securities                               5,643                7,099
Total HtM                                                               5,643                7,099


Total                                                                  22,202               20,277



In the fiscal years under review, financial investments included equity investments that are of minor im-
portance to the Group's economic position. To the extent these equity investments are not listed and it is
not possible to reliably measure their fair value, they are recognized at cost.


There were no allocations to the trading book.


Out of the available-for-sale financial investments as of December 31, 2011, EUR 15,909 million was due
after 12 months (December 31, 2010: EUR 11,568 million) and out of the held-to-maturity financial invest-
ments as of December 31, 2011, EUR 4,201 million (December 31, 2010: EUR 5,653 million) was due after 12
months; the amounts are expected to be realized or settled accordingly.


The claim for restitution arose in connection with the restructuring of the post-employment benefits at
Commercial Banking.
                                                  F-96




The interest accrued on financial investments is reported under other assets (note 12).



Changes in financial investments

                                                                   AfS
                                                 AfS              equity           HtM
                                              securities       investments       securities         Total
                                                      2011             2011               2011              2011
                                                       €m              €m                 €m                 €m
Balance on Jan. 1                                    13,177                  1           7,099          20,277
Additions                                            5,609                   0                 0            5,609
Amortization                                           -50                   0                -11             -61
Reclassifications                                          0                 0                 0               0

Merger / changes in Group structure                        0                 0                 0               0

Other changes in fair value                            423                   2                 0             425
Impairments and reversals                             -136                   0                 0             -136
Disposals                                             -865                   0                 0            -865
Maturities                                           -1,602                  0          -1,445          -3,047
Currency translation
                                                           0                 0                 0               0
differences
Balance on Dec. 31                                   16,556                  3           5,643          22,202




                                                      2010             2010              2010               2010
                                                       €m              €m                 €m                 €m
Balance on Jan. 1                                    11,293                  1           9,530          20,824
Additions                                            4,340                   0                 0            4,340
Amortization                                           -39                   0                -14             -53
Reclassifications                                      282                   0           -282                  0

Merger / changes in Group structure                        0                 0                 0               0

Other changes in fair value                                6                 0                 0               6
Impairments and reversals                                  0                 0                 0               0
Disposals                                             -792                   0                -51           -842
Maturities                                           -1,913                  0          -2,085          -3,998
Currency translation
                                                           0                 0                 0               0
differences
Balance on Dec. 31                                   13,177                  1           7,099          20,277



In fiscal year 2011, an incurred loss was identified in relation to Greek government bonds. Based on their
market value as of December 31, 2011, this resulted in an impairment loss of EUR 136 million. The Greek
government bonds have been categorized as available-for-sale. A transfer was made from the revaluation
reserve through profit and loss in order to recognize the impairment charge.


In March 2012, the ING Group approved the exchange of Greek government bonds. In exchange for the
Greek government bonds, ING-DiBa received bonds issued by the European Financial Stability Facility
(EFSF) and new Greek government bonds, in addition to a derivative financial instrument linked to the
development of Greece's gross domestic product. The new government bonds have a step-up coupon.


As part of this successfully implemented exchange, EUR 41.8 million was recognized after the end of the
reporting period. As a result, there was no significant change in the carrying amounts of Greek government
bonds as compared to December 31, 2011.
                                                      F-97




There were no reclassifications between measurement categories pursuant to IAS 39.9 in fiscal year 2011.
During the prior fiscal year, Greek government bonds with a volume of EUR 282 million had been reclassi-
fied from "held-to-maturity" to "available-for-sale".


ING-DiBa continues to hold the securities transferred as part of repo and securities lending transactions in
its statement of financial position. Since dated return and repurchase agreements are in place for the
transferred assets, ING-DiBa continues to bear the associated risks and rewards. The risks are described in
the Group management report. Note 24 contains information relating to financial instruments transferred
and pledged as collateral and the corresponding liabilities.



Collateral held in accordance with IFRS 7.15

                                                                       2011                 2010
                                                                        €m                   €m
Reverse repo transactio ns                                             ,31
                                                                      1 8                  4,109
Securities lending transactio ns                                         0                   ,1
                                                                                            1 65
                  Ertragsteuerverbindlichkeiten


Securities accepted as collateral as part of reverse repo and securities lending transactions are not recog-
nized in the statement of financial position under IFRS. The liquidation options are similar to those of
standard international repo transactions. Securities lending transactions were exclusively entered into with
companies of the ING Group.

The collateral held is reported here at fair value.



                       positive
( 6 ) Derivatives with p ositive fair value

                                                                        12/31/2011          12/31/2010

                                                                              €m                   €m

Derivatives
   M icro fair value hedges                                                     0                   61
   P o rtfo lio fair value hedges                                             211                  149

   Used in cash flo w hedges                                                   26                   41

   Other derivatives                                                           80                  161

To tal                                                                        317                  411




All derivative financial instruments are carried at their fair values and reported as positive or negative fair
values. With the exception of cash flow hedges, changes in fair value are immediately recognized in profit
or loss.


Derivatives not accounted for using hedge accounting, reported here under "other derivatives", are used to
hedge interest rate and other market price risk as well as for duration control and, to a lesser extent, to
hedge currency risks.


ING-DiBa makes almost exclusive use of simply structured interest rate swaps, as well as an insignificant
amount of currency forwards. In accordance with IAS 39.9, they are allocated to the "at fair value through
profit or loss" category. Hedge accounting is not applied to any of the currency forwards.
                                                                   F-98




Further information on derivatives and hedge accounting can be found in notes 23 (Hedge accounting), 17
(Derivatives with negative fair value) and 33 (Net gains/losses on measurement of derivatives and hedged
items).


An amount of EUR 298 million (December 31, 2010: EUR 371 million) is expected to be realized or settled
after 12 months.

The interest accrued on derivatives is reported under other assets (note 12) or under other liabilities (note
21).



( 7) Investment property


ING-DiBa holds a small portfolio of properties that it does not use itself. If they generate rental income,
this is recognized under other net income from financial investments and investment property (note 34).


Comments on the valuation methods can be found in the "Basis of presentation" section of this report.



Changes in investment properties

                                                                          12/31/2011              12/31/2010

                                                                                €m                       €m
B alance o n Jan. 1                                                              13                       13
A dditio ns                                                                       0                        0
M erger / changes in Gro up structure                                             0                        0
Reclassificatio ns to / fro m Gro up-o ccupied pro perties                        0                        0
Changes in fair value                                                           –1                         0
Dispo sal                                                                         0                        0
B alance o n Dec. 31                                                             12                       13




All investment property is measured at fair value.



Status of external property valuation reports


                                                                                       P ercentage o f FV o f
                                                                                       investment pro perty



The mo st recent valuatio n repo rt was prepared during the year

2011                                                                                                   100%
2010                                                                                                     0%
No t appraised by external appraisers                                                                    0%
To tal                                                                                                 100%
                                                            F-99




                   owner
( 8) Equipment and owner- occupied property

                                                                                        12/31/2011            12/31/2010
                                                                                              €m                       €m
IT facilities                                                                                  18                       12
Owner-o ccupied pro perties                                                                    15                       14
Other pro perty and equipment                                                                  18                       16
To tal                                                                                         51                       42




                         owner-
Changes in equipment and owner- occupied property


                                                                       Owner-
                                                                      occupied          Other property
                                                 IT facilities        properties        and equipment       Total
                                                           2011              2011                    2011           2011
                                                            €m                €m                     €m              €m
Carrying amount on Jan.1                                         12                14                  16             42
Additions                                                        14                0                    5             19

Merger / changes in Group structure                              0                 0                    2              2

Disposals                                                    –0                    0                    0             –0
Depreciation                                                 –8                –0                     –5             – 13

Impairments / reversals                                          0                 0                    0              0

Changes in fair value due to remeasurement                       0                  1                   0               1

Reclassifications and other changes                              0                 0                    0              0
Carrying amount on Dec. 31                                       18                15                  18             50
Gross carrying amount on Dec. 31                                 84                17                  56             157
Accumulated depreciation as of Dec. 31                     – 66                –2                    – 38           – 106
Cumulative changes in fair value as of Dec. 31                   0                 0                    0              0
Carrying amount on Dec. 31                                       18                15                  18              51



                                                           2010               2010                   2010           2010
                                                            €m                €m                     €m              €m
Carrying amount on Jan.1                                         18                14                  20             52
Additions                                                         4                0                    2              5

Merger / changes in Group structure                              0                 0                    0              0

Disposals                                                    –0                    0                    0             –0
Depreciation                                                – 10               –0                     –6             – 16

Impairments / reversals                                          0                 0                    0              0

Changes in fair value due to remeasurement                       0                 0                    0              0

Reclassifications and other changes                              0                 0                    0              0
Carrying amount on Dec. 31                                       12                14                  16             41
Gross carrying amount on Dec. 31                                 79                18                  48            146
Accumulated depreciation as of Dec. 31                      – 67               –3                    – 32           – 103
Cumulative changes in fair value as of Dec. 31                   0             –1                       0              0
Carrying amount on Dec. 31                                       12                14                  16             42
                                                         F-100




IT facilities and other property and equipment have been measured using the acquisition method under
IAS 16.30. The assets have been depreciated pro rata temporis on a straight-line basis. The depreciation
periods applied correspond to the expected useful lives for the Company.


The revaluation method is used to measure Group-occupied properties.


The following depreciation periods have been applied:



Summary of depreciation periods


                                                                                     Depreciatio n
                                                                                         perio ds

                                                                                         in years
IT facilities                                                                                3-7
Owner-o ccupied pro perties                                                                    50
Other pro perty and equipment                                                               2 - 23




Their fair values are determined in the same way as those of investment properties, using the income capi-
talization approach. The latest external valuation report for Group-occupied properties was issued on De-
cember 23, 2011. Overall, increases in value resulted in a reversal of impairment of EUR 1 million (December
31, 2010: EUR 0 million).


                                                                    12/31/2011          12/31/2010
                                                                          €m                   €m
Fair value after remeasurement                                             15                  14

No tio nal carrying amo unt under acquisitio n metho d                     13                  18




( 9 ) Intangible assets

                                                                    12/31/2011         12/31/2010

                                                                          €m                  €m
So ftware                                                                  28                  29

Other intangible assets                                                     0                   0

To tal                                                                     28                  29




No impairment losses on software and other intangible assets were recognized in the periods under re-
view.


Software and other intangible assets are subject to finite useful lives; they are measured according to the
acquisition method and reduced pro rata temporis by straight-line amortization. The useful life of software
is normally three years.


Amortization expenses are recognized under other administrative expenses (note 39) in the income state-
ment.
                                                  F-101




Any costs of internally generated software expensed through the income statement in accordance with IAS
38.54 and IAS 38.57 are also recognized under other administrative expenses (note 39). In fiscal year 2011,
an amount of EUR 3.6 million was expensed (previous year: EUR 3.7 million).



Changes in intangible assets


                                                                                Other
                                                                              intangible
                                             Software         Goodwill          assets         Total
                                                   2011             2011              2011             2011
                                                    €m               €m               €m               €m
Carrying amount on Jan. 1                               29               0                 0            29
Additions                                                11              0                 0             11
Merger / changes in Group structure                       1              0                 0              1
Disposals                                                0               0                 0             0
Amortization                                        – 13                 0                 0           – 13
Impairments / reversals                                  0               0                 0             0
Reclassifications and other changes                      0               0                 0             0
Carrying amount on Dec. 31                              28               0                 0            28
Gross carrying amount on Dec. 31                        111              0                 0            111
Accumulated amortization as of Dec. 31             – 83                  0                 0           – 83
Carrying amount on Dec. 31                              28               0                 0            28



                                                   2010             2010              2010             2010
                                                    €m               €m                €m              €m
Carrying amount on Jan. 1                               31               0                 3             33
Additions                                               12               0                 0             12
Merger / changes in Group structure                      0               0                 0              0
Disposals                                                0               0                 0              0
Amortization                                        – 13                 0              –3             – 16
Impairments / reversals                                  0               0                 0              0
Reclassifications and other changes                      0               0                 0              0
Carrying amount on Dec. 31                              29               0                 0             29
Gross carrying amount on Dec. 31                        99               0                 9            107
Accumulated amortization as of Dec. 31             – 69                  0              –9             – 78
Carrying amount on Dec. 31                              29               0                 0             29



Additions to software can be broken down into internally generated software at EUR 7 million (previous
year: EUR 4 million) and individually acquired software at EUR 4 million (previous year: EUR 8 million).



  10)
( 10 ) Income tax assets

                                                                         12/31/2011            12/31/2010

                                                                               €m                       €m
Inco me tax assets                                                               1                       3



Any income tax assets are due within 12 months.
                                                      F-102




  11)
( 11) Deferred tax assets

                                                                     12/31/2011           12/31/2010

                                                                              €m                 €m
Deferred tax assets                                                          381                329




Deferred taxes are reconciliation items for temporary differences between the tax base of assets under
national tax law and their carrying amounts in the IFRS financial statements. They are calculated using the
tax rates expected to be applicable at the time the differences are settled.

Deferred taxes are explained further in notes 19 and 40.



  12) Ot
( 12) Ot her assets


                                                                            12/31/2011          12/31/2010
                                                                                   €m                  €m
Accrued interest on loans and advances to banks                                    28                   0
Accrued interest on loans and advances to customers                                86                   6
Accrued interest on AfS financial investments                                      301                 254
Accrued interest on HtM financial investments                                      168                 214
Accrued interest on hedging derivatives                                            110                 137
Accrued interest on other derivatives                                               52                 108
Other accrued interest                                                              0                   0
Net plan assets of pension plans                                                    15                  0
Prepaid expenses                                                                    12                  11
Other assets                                                                        41                  14
Total                                                                              814                 744



"Net plan assets of pension plans" shows the amount by which the plan assets, measured at fair value,
exceed the corresponding obligation. Full details are provided under note 20 (Non-current provisions).


Net plan assets were included in this item as a result of the integration of the German branch of ING Bank
N.V. EUR 30 million of the change in the value of other assets resulted from this transaction.


An amount of around EUR 6 million in other assets (previous year: EUR 7 million) is expected to be realized
or settled after 12 months.



  13)
( 13) Consolidated equity

                                                                12/31/2011               12/31/2010
                                                                      €m                       €m
Subscribed capital                                                    100                      100
Reserves                                                            5,378                     4,731
   Revaluatio n reserves                                              214                      104
   Other reserves                                                   5,164                    4,627
To tal                                                               478
                                                                    5,                         831
                                                                                              4,
                                                            F-103




ING-DiBa AG's subscribed capital was unchanged at EUR 100 million as of the end of the reporting period.
It is fully paid up and divided into 100,000,000 no-par value shares, all of which are held by ING Deutsch-
land GmbH, Frankfurt am Main. No profit participation certificates or subordinated liabilities were issued.


This item includes a non-controlling interest of EUR 0.025 million (December 31, 2010: EUR 0.025 million).
These are related to the fully consolidated special purpose entity described in greater detail under note 28.


In accordance with IFRS, gains or losses from the fair value measurement of AfS securities are recognized
directly in the revaluation reserve, net of deferred taxes. The gains or losses are only recognized in profit or
loss when the asset has been sold or derecognized. In addition, the reserve for cash flow hedges is part of
the revaluation reserve. As of December 31, 2011, the revaluation reserve contains an amount of less than
EUR 1 million for real property (previous year: EUR 0 million).


Other reserves contains the legal reserve, retained earnings, capital contributions from the parent and the
share-based payments granted by the ING Group with settlement using equity instruments. This item
increased by EUR 245 million as a result of the merger as of August 31, 2011 described under the section
entitled "Significant accounting policies". The legal reserve contains EUR 1 million in reserves that are re-
quired under national law (previous year: EUR 1 million); the amounts recognized in this reserve are
blocked from distribution in the HGB single-entity financial statements.


The profit after tax for 2011, determined in accordance with HGB, of EUR 394 million (previous year: EUR
290 million) will be transferred to the sole shareholder, ING Deutschland GmbH, Frankfurt am Main, on the
basis of a profit and loss transfer agreement.



Changes in revaluation reserves

                                            Revaluation reserve     Available-for-sale   Cash flow hedge    Total
                                                    Real Estate financial investments            reserves

                                                          2011                   2011               2011    2011
                                                           €m                    €m                 €m      €m
Value as of Jan. 1                                           0                     77                 27     104
Valuation of available-for-sale financial
                                                             0                     12                  0      12
investments
Realized gains and losses recognized on
                                                             0                     14                 -1      14
statement of comprehensive income
Losses due to impairments                                    0                     92                  0      92
Changes in cash flow hedge reserves                          0                      0                 -9      -9
Value on Dec. 31                                             0                    196                 17     214


                                            Revaluation reserve     Available-for-sale   Cash flow hedge    Total
                                                    Real Estate financial investments            reserves

                                                          2010                   2010               2010    2010
                                                           €m                    €m                 €m      €m
Value as of Jan. 1                                           0                     13                 15      28
Valuation of available-for-sale financial
                                                             0                     42                  0      42
investments
Realized gains and losses recognized on
                                                             0                     22                 -1      21
statement of comprehensive income
Losses due to impairments                                    0                      0                  0       0
Changes in cash flow hedge reserves                          0                      0                 13      13
Value on Dec. 31                                             0                     77                 27     104
                                                  F-104




Available-for-sale financial investments are explained under note 5 and the fair value measurement
method is described under note 30.

Disclosures relating to cash flow hedges can be found in note 23.



  14) Securitized
( 14) Securitized liabilities


On June 22, 2011, ING-DiBa AG placed its first mortgage bond (Hypothekenpfandbrief) on the capital market
in the form of a EUR 500 million bearer bond. The EUR 100,000-denominated bond will mature on June 29,
2016.


As of December 31, 2011, the bond is securitized solely through land charges on German residential proper-
ties (note 24).


These properties have been entered into the funding register (Refinanzierungsregister).



Changes in securitized liabilities

                                                                    12/31/2011            12/31/2010
                                                                          €m                    €m
Balance as of Jan. 1                                                        0                     0
Additions                                                                 497                     0
Amortization                                                                0                     0
Reclassifications                                                           0                     0
Merger / changes in Group structure                                         0                     0
Changes in revaluation reserve                                              0                     0
Impairments / reversals                                                     0                     0
Disposals                                                                   0                     0
Maturities                                                                  0                     0
Currency translation differences                                            0                     0
Balance as of Dec. 31                                                     497                     0




  15)
( 15) Deposits from banks

                                                                    12/31/2011            12/31/2010
                                                                          €m                    €m
P ayable o n demand                                                        96                    81
With an agreed maturity o r perio d o f no tice                         7,859                 5,589
To tal                                                                  7,955                 5,670




This item includes EUR 443 million arising from the business transactions of the former German branch of
ING Bank N.V.


The deposits from banks as of December 31, 2011 include an amount of EUR 6,709 million that is only ex-
pected to be realized or settled after 12 months (December 31, 2010: EUR 5,371 million).
                                                   F-105




As of December 31, 2011, there were no open market transactions with the European Central Bank System
(December 31, 2010: EUR 0 million).


The liabilities reported here include repo and securities lending transactions of EUR 730 million (December
31, 2010: EUR 109 million). Further information regarding financial instruments transferred and held as
collateral is contained in notes 2 and 24.


The deposits from banks include cash collateral received for reverse repo transactions of EUR 4 million
(December 31, 2010: EUR 14 million) and for derivatives (note 6) of EUR 10 million (December 31, 2010: EUR
43 million).


The interest accrued on deposits from banks is reported under other liabilities (note 21).



  16)
( 16 ) Due to customers

                                                                     12/31/2011          12/31/2010
                                                                           €m                   €m
Savings depo sits                                                       85,919               80,445
Current acco unt balances                                               2,488                 1,635
Other depo sits                                                         2,453                   143
To tal                                                                 90,860                82,223




Amounts due to customers as of December 31, 2011 are expected to include an amount of EUR 683 million
that will only be realized or settled after 12 months (December 31, 2010: EUR 548 million).


ING-DiBa participates in the deposit protection fund of the Bundesverband deutscher Banken e.V., Berlin,
(Association of German Banks). In addition, it belongs to the Compensation Scheme of German Banks,
Berlin (Entschädigungseinrichtung deutscher Banken GmbH, "EdB").


The liabilities reported here include repo and securities lending transactions of EUR 390 million (December
31, 2010: EUR 0 million). Note 24 provides information on financial instruments transferred and pledged as
collateral.


The amounts due to customers include cash collateral received for derivatives (notes 6 and 17) of EUR 6
million (December 31, 2010: EUR 11 million).


The interest accrued on amounts due to customers is reported under other liabilities (note 21).
                                                   F-106




  17)
( 17) Derivatives with negative fair value

                                                                      12/31/2011         12/31/2010

                                                                            €m                  €m

Derivatives
   M icro fair value hedges                                                243                   55

   P o rtfo lio fair value hedges                                        2,679                1,872

   Used in cash flo w hedges                                                  0                   0

   Other derivatives                                                         81                 165

To tal                                                                   3,003                2,092




This item includes derivative financial instruments designated as hedges and instruments not designated
as hedges. Their negative fair values of EUR 3,003 million (previous year: EUR 2,092 million) are offset by
the positive fair value of derivatives of EUR 317 million (previous year: EUR 411 million).


Derivatives not accounted for using hedge accounting, reported here under "other derivatives", are used to
hedge interest rate and other market price risk as well as for duration control and, to a lesser extent, to
hedge currency risks.


Further information on derivatives and hedge accounting can be found in notes 23 (Hedge accounting), 6
(Derivatives with positive fair value) and 33 (Net gains/losses on measurement of derivatives and hedged
items).


For an amount of EUR 2,964 million under Derivatives with negative fair value (previous year: EUR 2,019
million), realization or settlement is only expected after 12 months.


The interest accrued on derivatives is reported under other assets (note 12) or under other liabilities (note
21).



  18)
( 18) Income tax liabilities

                                                                      12/31/2011         12/31/2010

                                                                            €m                  €m
Inco me tax liabilities                                                       8                   3




Income tax liabilities relate to current payment obligations to the tax authorities.


The tax reconciliation can be found under note 40.



  19)
( 19 ) Deferred tax liabilities

                                                                      12/31/2011          12/31/2010

                                                                            €m                   €m
Deferred tax liabilities                                                    412                 337




The tax reconciliation and explanations of income tax expense can be found in note 40.
                                                                   F-107




Changes in deferred tax assets and liabilities


                                                                        Changes       Merger /
                                              Net       Changes                                                  Net
                                                                     recognized     changes in
                                   deferred taxes    recognized                                  Other deferred taxes
                                                                     in profit or       Group
                                      as of Jan. 1     in equity                                        as of Dec. 31
                                                                             loss    structure

                                             2011                                                               2011
                                             €m            €m               €m           €m       €m             €m
Financial investments                        – 33          – 56             – 51            0       0          – 140
Derivatives with positive and
                                             530              0             320             0       0            850
negative fair value
Loans and advances to banks and
                                           – 526              0            – 229            0       0          – 755
customers
Cash flow hedges                             – 13             5                0            0       0            –9

Pension and personnel provisions                5             0                1          –2        0              4

Tax loss carryforwards                          9             0              –9             0       0            –0
Other items                                    20           –0               –2             0       0             18
Subtotal                                      –8           – 51              29           –2        0           – 32


Net deferred taxes                            –8           – 51              29           –2        0           – 32
  Deferred tax assets                        329              0             298             0    – 246           381

  Deferred tax liabilities                 – 337           – 51            – 269          –2      246          – 412

Total                                         –8           – 51              29           –2        0           – 32



                                                                        Changes       Merger /
                                              Net       Changes                                                  Net
                                                                     recognized     changes in
                                   deferred taxes    recognized                                  Other deferred taxes
                                                                     in profit or       Group
                                      as of Jan. 1     in equity                                        as of Dec. 31
                                                                             loss    structure
                                            2010                                                                2010
                                             €m            €m               €m           €m       €m             €m
Financial investments                        – 59          – 31              43             0       14          – 33
Derivatives with positive and
                                             499              0              30             0       0            530
negative fair value
Loans and advances to banks and
                                           – 520              0             – 18            0       12         – 526
customers
Cash flow hedges                              –7            –6               –1             0       0           – 13

Pension and personnel provisions                4             0              –1             0       2              5

Tax loss carryforwards                          9             0                0            0       0              9
Other items                                    50             0              –2             0     – 28            20
Subtotal                                     – 24          – 36               52            0       0            –8


Net deferred taxes                           – 24          – 36               52            0       0            –8
  Deferred tax assets                        294              0              114            0     – 79           329

  Deferred tax liabilities                 – 318           – 36             – 62            0      79          – 337

Total                                        – 24          – 36               52            0       0            –8



The German branch of ING Bank N.V. was transferred to ING-DiBa AG with retroactive effect for income tax
purposes from December 31, 2010.
                                                     F-108




Because of amounts taken directly to equity, the change in the difference between deferred tax assets and
deferred tax liabilities does not correspond to net deferred taxes.


Deferred taxes are recognized in profit or loss if the corresponding statement of financial position item is
recognized in profit or loss. Deferred taxes are taken directly to the revaluation reserve if the changes in fair
value of the corresponding item in the statement of financial position are taken directly to equity.


Deferred taxes on AfS securities of EUR -56 million (previous year: EUR -30 million) were taken directly to
equity, compared with total gains recognized in the revaluation reserve of EUR 174 million (previous
year: EUR 95 million). This resulted in net gains of EUR 119 million (previous year: EUR 65 million).



Deferred taxes due to unused tax loss carryforwards

                                                        12/31/2011          12/31/2010
                                                              €m                    €m
To tal unused tax lo ss carryfo rwards                          0                   37
   o f which no t resulting in deferred tax assets              0                    0
   o f which resulting in deferred tax assets                   0                   37
A verage tax rate                                               0                   25
Deferred tax assets                                             0                    9




Deferred tax assets on tax loss carryforwards and unused tax deductions are recognized only up to the
amount in which realization of the respective tax benefit is probable. Developments in future fiscal years
may have an impact on the assessment of realizability. Imponderables in determining whether tax losses
and tax deductions will remain usable are taken into account when calculating deferred tax assets.


As of December 31, 2011 and as of December 31, 2010, there were no temporary differences in connection
with investments in subsidiaries and foreign branches for which no deferred taxes had as yet been recog-
nized.



  20) Non-
( 20 ) Non- current provisions

                                                                       12/31/2011           12/31/2010
                                                                            €m                    €m
P ensio n pro visio ns                                                       48                    47
Other perso nnel pro visio ns                                                  4                    3
P ro visio n fo r restructuring measures                                       2                    0
Other pro visio ns                                                             3                    2
To tal                                                                       56                    52




An amount of EUR 54 million (December 31, 2010: EUR 45 million) of the provisions recognized is expected
to be realized or settled after 12 months.


The provision for restructuring measures was acquired in the course of the transfer of ING-DiBa's Commer-
cial Banking activities.
                                                    F-109




EUR 1 million of the other provisions relate to litigation risks (December 31, 2010: EUR 2 million). There is
uncertainty with regard to amount and due date. The actual provisions recognized depend on the specific
progress of the litigation.



           non-
Changes in non- current provisions




                                                                 Other
                                                  Pension    personnel        Other
                                                provisions   provisions   Provisions       Total
                                                     2011         2011         2011        2011
                                                     €m           €m           €m           €m
Carrying amount as of Jan. 1                           47            3            2          52

Merger / changes in Group structure                     0            0            3           3

Additions during the reporting period                   3            1            2           5
Reversals during the reporting period                   0            0           -1          -1
Utilizations during the reporting period               -2            0            0          -3
Carrying amount as of Dec. 31                          48            4            5          56




                                                                 Other
                                                  Pension    personnel        Other
                                                provisions   provisions   Provisions       Total
                                                    2010         2010         2010         2010
                                                     €m           €m           €m           €m
Carrying amount as of Jan. 1                           45            4            1          50

Merger / changes in Group structure                     0            0            0           0

Additions during the reporting period                   3            0            1           4
Reversals during the reporting period                   0           -1            0          -1
Utilizations during the reporting period               -1            0            0          -1
Carrying amount as of Dec. 31                          47            3            2          52



In the case of the items acquired in the course of the merger, additions, reversals and utilizations relate to
the period following the merger date in 2011.



Pension plans


ING-DiBa AG grants its employees post-employment benefits on the basis of bank agreements and indi-
vidual contractual commitments. In addition to the payment of retirement pensions, they also include
disability benefits and surviving dependents' benefits.


Occupational pensions are governed by defined benefit plans and defined contribution plans. Expenses for
defined contribution plans, including employer contributions to the statutory pension insurance scheme,
amounted to EUR 17 million (previous year: EUR 16 million).
                                                     F-110




As a result of the integration of the German branch of ING Bank N.V., ING-DiBa AG assumed additional
pension obligations; these are protected against insolvency through a contractual trust agreement (CTA)
and a pension fund. The plan assets associated with these institutions are offset against the corresponding
pension liability in accordance with IAS 19.54, and are presented under other assets (note 12) as of Decem-
ber 31, 2011. The plan assets in the CTA and pension fund consist exclusively of units in a special fund
launched for ING.


A provision of EUR 15 million was recognized for current pensions and pension entitlements of former
members of executive bodies as of December 31, 2011 (previous year: EUR 22 million).


The provisions are based on the defined benefit obligation (DBO), i.e., the present value of the realistically
measured entitlements earned as of the valuation date.



Defined benefit obligation


The defined benefit obligation changed as follows:

                                                                      12/31/2011          12/31/2010
                                                                            €m                  €m
DBO on Jan. 1                                                                 44                 44
Current service cost                                                           1                   1
Interest cost                                                                  4                   2
Past service cost                                                              0                   0
Benefits paid                                                                –5                  –2
Actuarial gains / losses                                                       1                 –2
Merger / changes in Group structure                                          119                   0
Curtailments and plan settlements                                              0                   0
Other changes                                                                  0                   0
DBO on Dec. 31                                                               165                 44
of which from fully or partially funded plans                                119                   0
of which from unfunded plans                                                  46                 44



The amount reported under "Merger / changes in Group structure" relates exclusively to the transaction
resulting in the transfer of the German branch of ING Bank N.V.



Trend analysis

                                                   12/31/2011          12/31/2010          12/31/2009
                                                         €m                   €m                  €m
Defined benefit o bligatio n                             165                  44                  44

Experience-based adjustment o n pensio n
                                                         –2                   –2                  –2
o bligatio ns




The trend analysis shows the changes in the defined benefit obligation since the date of the opening IFRS
statement of financial position. Due to the initial recognition as of August 31, 2011 as a result of the merger
on that date, the fair value of plan assets, the funded status of the plan and experience-based adjustments
to plan assets are only presented for the 2011 reporting period, rather than for the past four years.
                                                   F-111




Change in plan assets
                                                                                                        2011
                                                                                                        €m
Fair value of plan assets as of Aug. 31, 2011                                                            96
Employer contributions                                                                                    2
Expected return on plan assets                                                                             1
Gain (+) / losses (-) on plan assets                                                                     –0
Benefits paid                                                                                            –3
Transfers                                                                                                 0
Plan settlements                                                                                          0
Currency translation effects                                                                              0
Fair value of plan assets as of Dec. 31, 2011                                                            95




Gains and losses on plan assets: August 31 – December 31, 2011

                                                                                              2011
                                                                                               €m
A ctual return o n plan assets                                                                   1
Expected return o n plan assets                                                                  1
   ns    osses on pl asset
G ai and l         an     s                                                                    –0




45.54 percent (EUR 43 million) of the plan assets consist of debt instruments, 20.95 percent (EUR 20 mil-
lion) of investment fund units and 33.51 percent (EUR 32 million) other assets. Real estate is not included.


The overall expected return on plan assets (composed of debt instruments, investment fund units and
other assets) is estimated using a conservative extrapolation of past returns. There were no adjustments to
plan assets or the DBO in fiscal year 2011. EUR 11 million in contributions to the pension plans is expected
in the coming fiscal year 2012.



Reconciliation to net plan assets of pension plans

                                                                         2011                  2010
                                                                          €m                    €m
Defined benefit o bligatio n (funded)                                      1
                                                                         – 19                       0

Unreco gnized actuarial gains / lo sses                                    38                       0

                                         ,
Fair value o f plan assets as o f Dec. 31 2011                             95                       0
     an     s      on ans as ofD ec.31 201
N etpl asset ofpensi pl               , 1                                  15                       0




Reconciliation
Reconciliation to pension provisions

                                                                     12/31/2011          12/31/2010
                                                                           €m                   €m
Defined benefit o bligatio n (unfunded plans)                               46                  45
Unreco gnized past actuarial gains / lo sses                                 2                   2
Unreco gnized past service co st                                             0                   0
     on ovi ons as ofD ec.31 201
P ensi P r si               , 1                                             48                  47
                                                  F-112




Planned payments from pension provisions


                                                          P ensio n pro visio ns
                                                                               €m
2012                                                                               11
2013                                                                               10
2014                                                                               10
2015                                                                               11
2016                                                                               10
   7-
201 2021                                                                       54




The amount of the obligation changes each year by the interest cost and the present value of newly earned
pension entitlements (current service cost). Past service cost is the redemption amount for changes to
pension plans in previous periods. ING-DiBa accounts for amounts resulting from actuarial gains or losses
according to the 10 percent corridor method under IAS 19 and amortizes them over the remaining working
lives of the active employees with pension entitlements.


All expenses related to this item were recognized under personnel expenses (note 38).


Transfers of pension entitlements as a result of changes of employer are recognized under other changes.



                               weighted
Calculation parameters for the weighted average


                                                                        12/31/2011        12/31/2010
                                                                                   %             %
Imputed interest rate                                                              4.8           5.1
Salary growth                                                                      3.0           3.0
Pension adjustments                                                                2.0           2.0
Inflation                                                                          2.0           2.0
Expected term return on plan assets                                                3.6           -



In accordance with IAS 19.64, the amount of the obligation is determined using the projected unit credit
method, taking dynamic variables into account.


The imputed interest rate is based on prime-rated government bonds with matching currencies and ma-
turities. The basic biometric probabilities were taken from the 2005G mortality tables of Prof. Klaus Heu-
beck and, for the branch in Austria, the Pagler & Pagler AVÖ 1999P Actuarial Assumptions for Pension In-
surance (Rechnungsgrundlagen für die Pensionsversicherung, AVÖ 1999P – Pagler & Pagler). Salary growth,
turnover, and retirement patterns were estimated specifically for each company.
                                                        F-113




Expenses for pensions

                                                           2011      2010
                                                           €m         €m
Current service cost                                            1       1
Past service costs                                              0       0
Interest cost                                                   4       2
Amortization of unrecognized past service cost                  0       0
Amortization of unrecognized actuarial gains / losses       –1          0
Total recognized personnel expenses                             4       3
Expected Return on plan assets                                  1       0
Total                                                           5       3




                     non-
Obligation for other non- current personnel provisions


                                                                       12/31/2011           12/31/2010

                                                                                €m                 €m
A nniversaries                                                                      2                  2
P artial retirement (liability)                                                     2                  2
Death benefits                                                                      0                  0
To tal                                                                              4                  3




Payments from this item are based on legal requirements or internal bank agreements.


A reimbursement amount of less than EUR 1 million is expected under the German Partial Retirement Act
(Altersteilzeitgesetz).


Information on payments to related parties can be found in note 29.



  21)
( 21) Other liabilities

                                                                     12/31/2011           12/31/2010
                                                                              €m                €m
A ccrued interest o n depo sits fro m banks                                    4                  0
A ccrued interest o n amo unts due to custo mers                               2                  0
A ccrued interest o n securitized liabilites                                   7                  0
A ccrued interest o n hedging derivatives                                    485                480
A ccrued interest o n o ther derivatives                                      65                125
Other accrued interest                                                         0                  5
Other liabilities                                                            646                515
To tal                                                                      1,209               ,1
                                                                                               1 25




Other liabilities relate primarily to withholding taxes payable on behalf of our customers as well as the
profit to be transferred to ING Deutschland GmbH.
                                                    F-114




Other disclosures relating to the consolidated statement of financial posi-
tion


  22)
( 22) Contractual maturities



Assets by remaining contractual maturity (carrying amounts)

                                                  12/31/2011    12/31/2011    12/31/2011    12/31/2011
                                                                less than 1      1 to 3
                                                  on demand                             3 to 12 months
                                                                    month       months
                                                        €m            €m            €m            €m
Cash reserve                                          2,783              0            0             0
Loans and advances to banks                           3,260            518          537           601
Loans and advances to customers                       2,246          2,222          702          2,015
Adjustment to portfolio fair value hedges                 0              1            1             15
Financial investments
- Available-for-sale                                     20              0          310           320
- Held-to-maturity                                        0            235          305           903
Derivatives with positive fair value                      0              0            1            18
Other assets                                              0            30            19           760
Remaining assets without determinable remaining
                                                          0              0            0             0
contractual maturities
Total                                                 8,309         3,006         1,875          4,631



                                                  12/31/2011    12/31/2011    12/31/2011    12/31/2011
                                                      1 to 5   more than 5
                                                                              indefinite         Total
                                                      years          years
                                                        €m            €m            €m            €m
Cash reserve                                              0              0            0          2,783
Loans and advances to banks                             875              0            0          5,791
Loans and advances to customers                      21,018        46,529             0         74,732
Adjustment to portfolio fair value hedges               957          1,392            0         2,366
Financial investments
- Available-for-sale                                  6,604          9,305            0         16,559
- Held-to-maturity                                    4,101           100             0         5,643
Derivatives with positive fair value                    298              0            0           317
Other assets                                              4           382             0          1,195
Remaining assets without determinable remaining
                                                          0              0           92            92
contractual maturities
Total                                                33,857         57,708           92       109,478
                                                     F-115




                                                  12/31/2010     12/31/2010    12/31/2010    12/31/2010
                                                                 less than 1       1 to 3
                                                  on demand                               3 to 12 months
                                                                     month        months
                                                        €m             €m            €m             €m
Cash reserve                                           1,417              0             0             0
Loans and advances to banks                            3,679          2,576            55           426
Loans and advances to customers                       3,458           1,210          818          2,269
Adjustment to portfolio fair value hedges                  0              0             1             17
Financial investments
- Available-for-sale                                       0           533           324            752
- Held-to-maturity                                         0           280           520            646
Derivatives with positive fair value                       0              0             1            38
Other assets                                               0             10             0           728
Remaining assets without determinable remaining
                                                           0              0             0             0
contractual maturities
Total                                                  8,554         4,609          1,719         4,876


                                                  12/31/2010     12/31/2010    12/31/2010    12/31/2010
                                                       1 to 5   more than 5
                                                                                indefinite         Total
                                                       years          years
                                                        €m             €m            €m             €m
Cash reserve                                               0              0             0          1,417
Loans and advances to banks                            1,972              0             0         8,709
Loans and advances to customers                       16,596        38,343              0        62,694
Adjustment to portfolio fair value hedges               601           1,046             0          1,665
Financial investments
- Available-for-sale                                   5,712          5,855             0         13,177
- Held-to-maturity                                     5,305           348              0         7,099
Derivatives with positive fair value                    292              79             0           411
Other assets                                              17            319             0          1,074
Remaining assets without determinable remaining
                                                           0              0            87            87
contractual maturities
Total                                                30,496          45,991            87        96,333



The "Remaining assets without determinable remaining contractual maturities" item includes investment
property, property and equipment, intangible assets and income tax assets.
                                                 F-116




Liabilities and items not recognized in the statement of financial position by remaining contractual
maturity on the basis of undiscounted cash flows

                                            12/31/2011      12/31/2011        12/31/2011

                                           on demand less than 1 month     1 to 3 months

                                                 €m               €m                €m
Securitized liabilities                             0                0                0
Deposits from banks                               167              790              144
Due to customers                               68,430            5,288             5,612
Derivatives with negative fair value                0               31              198
Other financial liabilities                         0                0                0
Other liabilities                                   0               39                 1
Subtotal                                       68,597            6,148            5,954

Financial guarantees                              138                0              125
Irrevocable loan commitments                    2,975                0              145
Revocable loan commitments                      1,799                0                0
Total                                          73,509            6,148            6,224



                                            12/31/2011       31.12.2011        31.12.2011   12/31/2011
                                                                             more than 5         Total
                                        3 to 12 months      1 to 5 years
                                                                                   years
                                                  €m               €m               €m            €m
Securitized liabilities                            14              524                 0          538
Deposits from banks                               333             2,243            5,356        9,033
Due to customers                                12,373             709                68       92,481
Derivatives with negative fair value              602            2,444             1,092        4,367
Other financial liabilities                         0                 0                0            0
Other liabilities                                1,175                8              461        1,683
Subtotal                                       14,496             5,929            6,978      108,102

Financial guarantees                              245              104                11          623
Irrevocable loan commitments                      582            3,338              205         7,246
Revocable loan commitments                         19                53               15        1,886
Total                                           15,342           9,424             7,208       117,856
                                                 F-117




                                          12/31/2010       12/31/2010         12/31/2010

                                          on demand less than 1 month     1 to 3 months

                                                 €m              €m                 €m
Securitized liabilities                            0                0                  0
Deposits from banks                                97             109                 25
Due to customers                               62,627            4,125              7,316
Derivatives with negative fair value               0               39                248
Other financial liabilities                        0                0                  0
Other liabilities                                  0               23                  0
Subtotal                                       62,724           4,296              7,589

Financial guarantees                               0                0                  0
Irrevocable loan commitments                   2,803                0                164
Revocable loan commitments                         0                0                  0
Total                                          65,527           4,296              7,754


                                           12/31/2010      12/31/2010         12/31/2010    12/31/2010

                                       3 to 12 months      1 to 5 years more than 5 years        Total

                                                 €m              €m                 €m            €m
Securitized liabilities                             0               0                  0
Deposits from banks                               105            1,927             4,318         6,581
Due to customers                                8,554             584                 73        83,278
Derivatives with negative fair value              719           2,679               1,210        4,895
Other financial liabilities                         0               0                  0            0
Other liabilities                               1,102               5                387         1,517
Subtotal                                      10,480            5,196              5,987        96,271

Financial guarantees                               31               0                  0           31
Irrevocable loan commitments                     754              567                  0        4,288
Revocable loan commitments                         0                0                  0            0
Total                                          11,264           5,763              5,987      100,590
                                                    F-118




  23)
( 23) Hedge accounting


Hedge accounting is explained in the "Basis of presentation" section of this report.



Fair value hedges


The following table shows the fair values of derivatives held as part of fair value hedges.

                                                               Equity and                           Equity and
                                                A ssets                             A ssets
                                                                liabilities                          liabilities
                                              12/31/2011        12/31/2011        12/31/2010        12/31/2010
                                                    €m                 €m                €m                 €m

Derivatives used as fair value hedges               212             2,922               209               1,926




Net measurement gains or losses on derivatives and hedged items are described in note 33.


The interest accrued on hedging derivatives is reported under other assets (note 12) or under other liabili-
ties (note 21).


The full fair value of derivatives, including accrued interest, as of December 31, 2011 amounted to EUR 290
million on the assets side (previous year: EUR 304 million) and EUR 3,407 million on the liabilities side
(previous year: EUR 2,406 million).


The changes in fair value of hedged items in portfolio hedge accounting which are attributable to the
hedged risk are presented in a separate item in the statement of financial position. These are explained
under "Adjustment to portfolio fair value hedges" (note 4).



Cash flow hedges


The following table shows the fair values of derivatives held as part of cash flow hedges.

                                                                   Equity and                             Equity and
                                                    Assets                                Assets
                                                                    liabilities                            liabilities
                                                12/31/2011         12/31/2011         12/31/2010          12/31/2010
                                                      €m                    €m                 €m                  €m

Derivatives used as cash flow hedges                      26                  0                41                   0



The interest accrued on hedging derivatives is reported under other assets (note 12) or under other liabili-
ties (note 21).


The full fair value of derivatives, including accrued interest, as of December 31, 2011 amounted to EUR 58
million on the assets side (previous year: EUR 84 million) and EUR 0 million on the liabilities side (previous
year: EUR 0 million).
                                                                    F-119




Hedged cash flows


The following table shows the periods in which hedged cash flows are expected to occur and when these
are expected to become effective.

                         less than 1         1 to 3     3 to 12                                                           more than
                  2011
                           month            months      months      1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years   five years
                  €m
Inflow                             0.0           23.5        41.4           36.0         2.8           0.7         0.0             0.0
Outflow                            0.0           0.0         0.0             0.0         0.0           0.0         0.0             0.0
Net cash flow                      0.0           23.5        41.4           36.0         2.8           0.7         0.0             0.0



                         less than 1         1 to 3     3 to 12                                                           more than
                  2010
                           month            months      months      1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years   five years
                  €m
Inflow                                5.1       28.3         42.1           60.0        29.7           2.0         0.0             0.0
Outflow                            0.0           0.0         0.0             0.0         0.0           0.0         0.0             0.0
Net cash flow                         5.1       28.3         42.1           60.0        29.7           2.0         0.0             0.0




Cash flow hedge reserves


The following table shows the cash flow hedge reserves under equity. Note 13 provides information on
changes in the revaluation reserve.

                                                                                          12/31/2011                 12/31/2010

                                                                                                 €m                          €m
Cash flo w hedge reserves in equity                                                               17                         27




Cash flow hedge ineffectiveness


Cash flow hedge ineffectiveness impacted profit or loss as follows:

                                                                                          12/31/2011                 12/31/2010

                                                                                                 €m                          €m
Cash flo w hedge ineffectiveness                                                                  -1                           1




  24)                                       pledged
( 24) Financial instruments transferred and pledged as collateral



Financial instruments transferred yet not derecognized


ING-DiBa continues to hold the securities transferred as part of repo and securities lending transactions in
its statement of financial position. Since dated return and repurchase agreements are in place for the
transferred assets, ING-DiBa continues to bear the associated risks and rewards. The risks are described in
the Group management report.
                                                           F-120




                                                                       12/31/2011            12/31/2010
                                                                           Mio. €                Mio. €
Repo transactions                                                               1,103               101
  Available-for-sale                                                             935                  0
  Held-to-maturity                                                               168                101
Securites lending                                                                  0               1,102
  Available-for-sale                                                               0               1,041
  Held-to-maturity                                                                 0                 61
Used for refinancing in the European Central Bank System                        1,067               303
  Available-for-sale                                                            1,005               297
  Held-to-maturity                                                                62                  6
EUREX margin collateral                                                           22                 31
  Available-for-sale                                                                1                31
  Held-to-maturity                                                                21                  0
Total transferred                                                               2,192              1,537


The AfS and HtM instruments reported here are recognized under financial investments in the statement
of financial position (note 5).


Securities lending transactions were exclusively entered into with companies of the ING Group.


The transactions with the European Central Bank System do not deviate from the procedure commonly
used.


The repo transactions reported here have corresponding liabilities due to banks (note 15) amounting to
EUR 730 million (December 31, 2010: EUR 109 million) and amounts due to customers (note 16) amounting
to EUR 390 million (December 31, 2010: EUR 0 million).



Recognition in the amount of the continuing involvement


As part of a sub-participation agreement relating to the corporate customer business, the Bank transferred
EUR 70 million in receivables (previous year: EUR 0 million), of which a continuing involvement of EUR 3
million (December 31, 2010: EUR 0 million) continues to be recognized under loans and advances to cus-
tomers (note 3). This is offset correspondingly by EUR 3 million (December 31, 2010: EUR 0 million) which
is reported in deposits from banks (note 15).



Financial instruments pledged as collateral

                                                                   12/31/2011            2/ / 0
                                                                                        1 31 201
                                                                         €m                  m
                                                                                             €

   al S i    al nvest ent
Tot A f fnanci i     m   s                                            16,559                3,1
                                                                                           1 78

   o f which pledged as co llateral                                    1,940               1,369
   al M i    al nvest ent
Tot H t fnanci i     m   s                                             5,643               7,099

   o f which pledged as co llateral                                      251                 168
   al
Tot LaR                                                              83,228               72,728

   o f which pledged as co llateral                                    6,969               3,844

To tal transferred                                                      9,161              5,381
                                                   F-121




Further information on AfS and HtM financial instruments is contained in the section entitled "Financial
instruments transferred yet not derecognized" in this note.


Private mortgage loans serve as collateral cover for the Pfandbrief issued for the first time in 2011. The
carrying amount of the private mortgage loans entered into the funding register was EUR 2,265 million as
of December 31, 2011 (December 31, 2010: EUR 0 million). They are reported under loans and receivables
here. The loans of the cover pool comprise part of the "Loans and advances to customers" item (note 3). In
addition, a loan against borrower's notes for EUR 35 million (December 31, 2010: EUR 0 million) was trans-
ferred as collateral.


Loans and receivables include cash collateral for derivatives of EUR 3,056 million (December 31, 2010: EUR
2,194 million), of which EUR 3,030 million (December 31, 2010: EUR 2,170 million) was attributable to loans
and advances to banks (note 2) and EUR 27 million (December 31, 2010: EUR 24 million) to loans and ad-
vances to customers (note 3).


EUR 0 million in cash collateral pledged in respect of repo transactions was included in loans and receiv-
ables (December 31, 2010: EUR 4 million). On the reporting dates, they were related in full to loans and
advances to banks (note 2). The basis for the repo transactions is primarily the framework agreement for
securities repurchase transactions (repos) of the Bundesverband deutscher Banken (Association of German
Banks) and the Banking Federation of the European Union Master Agreement for Financial Transac-
tions/Transactions under Repurchase Agreements.


The loans and advances to customers (note 3) included a volume of EUR 1,648 million (December 31,
2010: EUR 1,646 million) pledged as collateral as part of transactions with the KfW development bank
(Kreditanstalt für Wiederaufbau). They are also a component of the loans and receivables category.


In relation to the collateral listed, there are no clauses or conditions that are of material importance when
considered separately.
                                                    F-122




  25)
( 25) Contingent liabilities


Contingent liabilities are items not recognized in the statement of financial position, as specified in IAS 37.
They relate primarily to irrevocable loan commitments to customers in the mortgage area (forward loans).


The integration of the German branch of ING Bank N.V. gave rise to the addition of contingent liabilities
from the corporate customer business during the reporting year. These include irrevocable and revocable
loan commitments, guarantees and letters of credit.


The expected disbursements for irrevocable and revocable loan commitments are presented below. These
correspond to the contractually stipulated maximum amounts. The same applies for letters of credit. The
maximum amount in the case of guarantees is the amount drawn down.


As part of the spin-off of the former Frankfurt branch of ING Bank N.V. from ING Bank N.V., Amsterdam, to
Conifer B.V. and the subsequent merger with ING-DiBa, ING-DiBa assumed Conifer B.V.'s statutory secon-
dary liability to the creditors of ING Bank N.V. This statutory secondary liability exists pursuant to Art.
2:334t of the Civil Code of the Netherlands and is enforceable with respect to certain obligations of ING
Bank N.V. existing on the effective date of the spin-off (August 31, 2011).


With regard to the scope of liability, a distinction must be drawn between joint and several obligations.
Joint obligations of ING Bank N.V. are subject to the joint liability of ING-DiBa and ING Bank N.V. The sec-
ondary liability in respect of the several obligations is limited to the value of the net assets of the Frankfurt
branch of ING Bank N.V. as of the date of the spin-off to Conifer B.V.


The term of this liability is unlimited and expires only upon the extinguishment of the relevant obligation.
In this context, it is not practical to make the disclosures required in accordance with IAS 37.86.
                                       F-123




                                       12/31/2011   12/31/2011      12/31/2011
                                                    less than 1
                                      on demand                 1 to 3 months
                                                        month
                                             €m            €m             €m
Irrevocable loan commitments                2,975             0            145
Revocable loan commitments                  1,799             0              0
Guarantees and letters of credit             304              0            118
Other transactions                             0              0              0
Total                                      5,079              0            263


                                       12/31/2011   12/31/2011      12/31/2011    12/31/2011
                                                                   more than 5        Total
                                   3 to 12 months   1 to 5 years
                                                                         years
                                             €m            €m             €m            €m
Irrevocable loan commitments                 582         3,338             205         7,246
Revocable loan commitments                     19            53             15         1,886
Guarantees and letters of credit             140           233              18          813
Other transactions                             0              0              0            0
Total                                        741         3,624             238        9,944



                                      12/31/2010    12/31/2010      12/31/2010
                                                    less than 1
                                      on demand                 1 to 3 months
                                                        month
                                             €m            €m             €m
Irrevocable loan commitments               2,803              0            164
Revocable loan commitments                     0              0              0
Guarantees and letters of credit               0              0              0
Other transactions                             0              0              0
Total                                      2,803              0            164


                                      12/31/2010    12/31/2010      12/31/2010    12/31/2010
                                                                   more than 5
                                   3 to 12 months   1 to 5 years                       Total
                                                                          years
                                             €m            €m             €m            €m
Irrevocable loan commitments                 754            567              0        4,288
Revocable loan commitments                     0              0              0            0
Guarantees and letters of credit               0              0              0            0
Other transactions                             0              0              0            0
Total                                        754            567              0        4,288
                                                    F-124




  26)
( 26 ) Litigation


The outcomes of pending litigation are not expected to have any material adverse effect on the net assets,
financial position and results of operations in excess of the amounts already recognized for litigation risks
under non-current provisions.



  27)
( 27) Future lease obligations


                                                                         Future minimum lease payments

                                                                                                   €m
2012                                                                                                16
2013                                                                                                12
2014                                                                                                 7
2015                                                                                                14
2016                                                                                                13
in years fo llo wing 2016                                                                          1
                                                                                                   12




Total rental and lease expenses amounted to EUR 19 million in fiscal year 2011 (previous year: EUR 17 mil-
lion). Of that amount, EUR 17 million (previous year: EUR 17 million) was attributable to minimum lease
payments and EUR 2 million (previous year: EUR 0 million) was attributable to contingent lease payments.


Operationally material are lease agreements for ATMs and for business premises or office buildings. Most of
the agreements in question specify fixed terms or minimum lease terms, for which fixed rental or lease
amounts have to be paid. Some of the rentals for buildings used for business operations are linked to con-
sumer price indices, while some of the lease payments for ATMs are linked to a reference interest rate.


The lease agreements for ATMs are usually non-full payout leases with sale options at no less than the
market price. Renewal options are granted subject to different lease payments.


Some of the leases for office buildings are for fixed terms, often granting renewal options, in turn for a fixed
term. Other leases are for indefinite terms. They do not normally include a sale option.


Neither building nor ATM leases impose restrictions that could impact the capital structure, profit or loss,
or other lease agreements of the Company.



  28)
( 28) Securitization



Pure German Lion


On December 1, 2008, the single entity ING-DiBa AG transferred a portfolio of mortgage loans with a
nominal volume of EUR 4.7 billion to a special purpose entity, Pure German Lion RMBS 2008 GmbH, Frank-
furt am Main, to let this entity securitize them in the form of residential mortgage backed securities
(RMBSs).
                                                   F-125




The special purpose entity is fully consolidated in the consolidated financial statements on the basis of SIC-
12. ING-DiBa does not hold any equity interest in the entity. The full consolidation has resulted in a non-
controlling interest of EUR 25 thousand being reported.


All securities under this securitization transaction are held by ING-DiBa AG and fully eliminated in consoli-
dation.



  29)
( 29 ) Related parties



Related persons



Total compensation paid to active members of executive bodies (key management personnel)


                                                                    12/31/2011           12/31/2010
                                                                         €m                   €m
Current co mpensatio n                                                      3                    3
P ensio ns                                                                  0                    0
Other lo ng-term remuneratio n                                              2                    3
Severance packages                                                          0                    0
Share-based payments                                                        0                    0
To tal co mpensatio n                                                       5                    6




Key management personnel as defined by IFRS comprises the active members of the Management Board
and Supervisory Board.


Total compensation paid to the Management Board and Supervisory Board amounted to EUR 4.8 million in
fiscal year 2011 (previous year: EUR 6.0 million).


EUR 3.8 million of the total compensation paid related to the executive activities of Management Board
members (previous year: EUR 5.5 million) and EUR 0.7 million related to the executive activities of Supervi-
sory Board members (previous year: EUR 0.5 million).


The current compensation includes all fixed and variable components, provided they were paid in the 12-
month period.



Share-                                            Supervisory
Share -based payments to the Management Board and Supervisory Board


In the periods under review, the members of the Management Board and Supervisory Board received
share-based payments in the amounts presented below. The weighted average of the fair values was de-
termined as of the date of the legally binding commitment. No subsequent changes in value were recog-
nized, because the exercise terms and conditions had not been changed. A new program was launched in
fiscal year 2011. The description of this new program can be found under note 38.
                                                   F-126




Share-       payments
Share -based payme nts to active members of executive bodies

                                                   Amount       Fair value at   Amount    Fair value at
                                                                  grant date                grant date
                                                                       (in €)                    (in €)

                                                      2011             2011       2010           2010
Options                                                  0                 0    134,930       441,221
Performance shares, deferred shares                 124,587        1,165,719     52,917       497,420




Total compensation paid to former members of executive bodies


Total compensation paid to former members of executive bodies amounted to EUR 0.9 million in fiscal year
2011 (previous year: EUR 0.7 million).



Other related party disclosures
Other


The total amount of loans granted to members of the Management Board and Supervisory Board
amounted to EUR 1.9 million as of December 31, 2011 (previous year: EUR 2.5 million); loans granted to
members of the Supervisory Board amounted to EUR 71 thousand as of the same date (previous year: EUR
515 thousand). These loans are the Bank's products and were granted at standard market terms and condi-
tions. No contingent liabilities had been entered into in connection with key management personnel, ei-
ther as of December 31, 2011 or the end of the previous year's reporting period.



Related companies



Business relationships with parent companies


In addition to the companies included in the Group, ING-DiBa AG also has business relationships with
parent and sister companies in the ING Group.


ING-DiBa AG's immediate parent is ING Deutschland GmbH, Frankfurt am Main, which holds a 100% inter-
est. The ultimate parent company of the entire ING Group is ING Groep N.V., Amsterdam (Netherlands).


In addition to the companies named, the following companies are parent companies to ING-DiBa AG:


ING Bank N.V., Amsterdam (Netherlands)


ING Direct N.V., Hoofddorp (Netherlands)


ING Deutschland GmbH, Frankfurt am Main (Germany)


ING Holding Deutschland GmbH, Frankfurt am Main (Germany)
                                                   F-127




                                                                    12/31/2011          12/31/2010
                                                                          €m                  €m
ING Groep N.V.
Loans and advances                                                          0                   0
Deposits                                                                    0                   0
Loan commitments                                                            0                   0
Income                                                                      0                   0
Expenses                                                                    0                   0
ING Bank N.V.
Loans and advances                                                      7,900                2,020
Deposits                                                                    0                   0
Loan commitments                                                            0                   0
Income                                                                    309                  47
Expenses                                                                    6                   2
ING Direct N.V.
Loans and advances                                                        418                 410
Deposits                                                                     1                   1
Loan commitments                                                            0                   0
Income                                                                      8                    7
Expenses                                                                   10                   11
ING Deutschland GmbH
Loans and advances                                                          0                   0
Deposits                                                                  467                 389
Loan commitments                                                            0                   0
Income                                                                      0                   0
Expenses                                                                    2                    1
ING Holding Deutschland GmbH
Loans and advances                                                          0                   0
Deposits                                                                  333                   0
Loan commitments                                                            0                   0
Income                                                                      0                   0
Expenses                                                                    3                   2



All transactions with parent companies were conducted at standard market terms and conditions.


In fiscal year 2011, EUR 5 billion in intra-Group RMBS securities were acquired from ING Bank N.V. The loans
and advances to and income from ING Direct N.V. are primarily the result of money market transactions.


The liabilities and expenses with respect to ING Deutschland relate primarily to the provision of long-term
funds for financing purposes.


The expense relating to ING Direkt N.V. reflects the provision of services to ING-DiBa AG.


The transfer of profit under HGB is explained in note 13.
                                                    F-128




Business relationships with other Group companies not included in the basis of consolidation


In the year under review, there were business relationships primarily with the following companies in-
cluded in the consolidated financial statements of ING Groep N.V.:


ING Financial Markets, Amsterdam


ING Securities Services, Amsterdam


ING Wholesale, Amsterdam


ING Direct Spain, Madrid


ING Direct Italy, Milan


ING Direct USA, Wilmington


Interhyp AG, Munich


ING London Treasury, London


ING Belgium, Brussels


ING Lease Germany, Norderstedt


ING Commercial Finance, Neuss


ING Domestic Bank Nederlands, Amsterdam


ING Commercial Finance Belgium, Brussels


Real Estate Dev Germany, Frankfurt am Main

                                                                      12/31/2011          12/31/2010
                                                                            €m                  €m
Lo ans and advances                                                        857                  301
Depo sits and amo unts due                                                1,033                 625
Lo an co mmitments                                                         204                    0
Inco me                                                                      16                   5
Expenses                                                                    49                   45




Most of the volume is attributable to transactions with ING Direct Spain, Madrid, and Interhyp AG, Munich
and ING Wholesale, Amsterdam. Money market transactions were entered into with these companies.
                                                  F-129




A significant proportion of transactions with Interhyp AG, Munich, consists of commission expenses for
brokering mortgage loans.


In the ordinary course of business, all transactions for the provision of goods and services entered into
with related parties were conducted on an arm's length basis at standard market terms and conditions.


No allowances or provisions were recognized for doubtful accounts.
                                                     F-130




  30)
( 30 ) Fair value reporting: financial instruments



Disclosures in accordance with IFRS 7.8 and IFRS 7.25


The following table provides an overview of the carrying amounts and fair values of financial instruments
held in the individual items of the statement of financial position:

                                                                  Fair value    Carrying amount
                                                                 12/31/2011          12/31/2011
                                                                       €m                  €m
Financial assets                                                    116,461            108,938
HtM financial investments                                             5,645              5,643
Other HtM financial investments1                                       168                 168
HtM                                                                   5,813               5,811
AfS financial investments                                            16,559              16,559
  of which equity investments                                             3                  3
                                  1
Other AfS financial investments                                        301                 301
AfS                                                                 16,860              16,860
Other derivatives with positive fair value                              80                  80
Other derivative assets1                                                 52                 52
FVTPL                                                                   132                132
Cash                                                                     78                 78
Hedging derivatives                                                     237                237
Adjustment to portfolio fair value hedges                             2,366              2,366
                                  1
Other derivative hedging assets                                         110                110
Financial instruments not categorized under IAS 39                    2,791               2,791
Balances with central banks                                           2,705               2,705
Loans and advances to banks                                           6,110               5,791
Loans and advances to customers                                     81,935               74,732
Other receivables from banks1                                            28                 28
Other receivables from customers (ABS / MBS)1                           86                  86
LaR                                                                 90,864              83,343


Financial liabilities                                              104,630             102,878
Other derivatives with negative fair value                               81                 81
Other derivative liabilities1                                            65                 65
FVTPL                                                                   146                146
Hedging derivatives                                                   2,922               2,922
Other hedging derivative liabilities1                                  485                 485
Financial instruments not categorized under IAS 39                    3,407              3,407
Securitized liabilities                                                 518                497
Other securitized liabilities                                             7                   7
Deposits from banks                                                   8,641               7,955
Due to customers                                                    91,904              90,860
                                           1
Other liabilities to banks and customers                                  6                  6
Financial liabilities                                              101,076              99,325
                                                             F-131



                                                                                 Fair value    Carrying amount
                                                                                12/31/2010          12/31/2010
                                                                                      €m                  €m
Financial assets                                                                   98,422              95,869
HtM financial investments                                                            7,233              7,099
                                           1
Other HtM financial investments                                                        192                192
HtM                                                                                  7,425               7,291
AfS financial investments                                                           13,178              13,178
  of which equity investments                                                            1                   1
                                       1
Other AfS financial investments                                                       254                 254
AfS                                                                                 13,432              13,432
Other derivatives with positive fair value                                             161                161
Other derivative assets1                                                              108                 108
FVTPL                                                                                 269                 269
Cash                                                                                    92                 92
Hedging derivatives                                                                   250                 250
Adjustment to portfolio fair value hedges                                            1,665               1,665
                                       1
Other derivative hedging assets                                                        137                137
Financial instruments not categorized under IAS 39                                   2,144               2,144
Balances with central banks                                                          1,325               1,325
Loans and advances to banks                                                          8,704              8,709
Loans and advances to customers                                                     65,118             62,694
                                   1
Other receivables from banks                                                             0                  0
                                                       1
Other receivables from customers (ABS / MBS)                                             6                  6
LaR                                                                                 75,153              72,734


Financial liabilities                                                              89,270              90,594
Other derivatives with negative fair value                                             165                165
                               1
Other derivative liabilities                                                           125                125
FVTPL                                                                                 290                 290
Hedging derivatives                                                                  1,926               1,926
                                               1
Other hedging derivative liabilities                                                  480                 480
Financial instruments not categorized under IAS 39                                  2,406               2,406
Securitized liabilities                                                                  0                  0
Other securitized liabilities                                                            0                  0
Deposits from banks                                                                  6,185               5,670
Due to customers                                                                   80,384              82,223
                                                   1
Other liabilities to banks and customers                                                 5                  5
Financial liabilities                                                              86,574              87,898



(1) Relates to accrued interest disclosed separately under other assets or other liabilities


The fair values of the financial instruments reported collectively in the cash reserve – cash balance and
balances with central banks – correspond to the respective carrying amounts.


For financial instruments listed on an active market, the relevant prices are used in determining fair values.


For financial instruments for which no active market is available, the fair values are determined using re-
cent transactions or an indicative quote by a market maker may be used. Alternatively, the fair values are
determined for each product by discounting the expected future cash flows to present value using current
interest rates, applying the relevant yield or swap curve and taking product-specific spreads or credit
spreads into account.
                                                      F-132




The AfS item contains a small amount of immaterial equity investments in companies which are measured
at cost and thus subject to an exception. They are not listed on a stock exchange, meaning that it is not
possible to reliably measure their fair value. No sale of these equity investments is planned for the coming
fiscal year.


If the securities and loans against borrower's notes being measured are illiquid instruments, a manual
spread is determined on the basis of observable market data and used to determine present value. Loans
against borrower's notes are recognized under loans and advances to banks and loans and advances to
customers.


If it is not possible to sufficiently determine a market price of ABSs due to inactive markets, recent transac-
tions or an indicative quote by a market maker may be used as the basis for calculating their fair value. If
no plausible fair values can be derived from this process, the security is modeled as a bullet bond and
measured using the discounted cash flow method. In this process, the maturity corresponds to a conserva-
tively estimated date of full redemption; the coupon corresponds to the actual interest rate. A spread was
modeled as a suitable value based on parameters which were observable on the market.


It is assumed that the fair values of irrevocable loan commitments and financial guarantees correspond to
their carrying amounts.



Fair value hierarchy


The table below comprises all financial instruments measured at their fair values in the statement of finan-
cial position. Fair values are broken down into three levels:


Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.


Level 2: Modeled prices, except for the quoted prices included in Level 1, determined on the basis of data
that is observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices).


Level 3: Prices modeled for the asset or liability that are not based on observable market data (unobserv-
able input data).
                                                     F-133




                                                Level 1         Level 2      Level 3         Total
                                             12/31/2011      12/31/2011   12/31/2011    12/31/2011
                                                   €m              €m           €m            €m
Assets
Other derivatives with positive fair value           0              80            0            80
Other derivative assets                              0              52            0            52
Hedging derivatives                                  0             237            0           237
Other derivative hedging assets                      0             110            0           110
AfS financial investments                         9,140           7,419           0        16,559
Other AfS financial investments                    167             134            0           301
Total                                            9,307           8,032            0        17,339

Equity and liabilities
Other derivatives with negative fair value           0              81            0            81
Other derivative liabilities                         0              65            0            65
Hedging derivatives                                  0            2,922           0         2,922
Other hedging derivative liabilities                 0             485            0           485
Total                                                0            3,553           0          3,553



                                                Level 1         Level 2      Level 3         Total
                                             12/31/2010      12/31/2010   12/31/2010   12/31/2010
                                                   €m              €m           €m            €m
Assets
Other derivatives with positive fair value           0             161            0           161
Other derivative assets                              0             108            0           108
Hedging derivatives                                  0             250            0           250
Other derivative hedging assets                      0             137            0           137
AfS financial investments                        9,038            4,139           0         13,177
Other AfS financial investments                    205              49            0           254
Total                                            9,243           4,844            0        14,087

Equity and liabilities
Other derivatives with negative fair value           0             165            0           165
Other derivative liabilities                         0             125            0           125
Hedging derivatives                                  0            1,926           0          1,926
Other hedging derivative liabilities                 0             480            0           480
Total                                                0            2,697           0         2,697



In fiscal year 2011, EUR 115 million (previous year: EUR 0 million) in available-for-sale financial investments
shifted from fair value measurement Level 2 to Level 1. EUR 2,685 million (previous year: EUR 445 million)
in available-for-sale financial investments shifted from fair value measurement Level 1 to Level 2. This re-
sulted in EUR 75 million in accrued interest reported under other assets shifting from Level 1 to Level 2
(previous year: EUR 5 million). EUR 0 million (previous year: EUR 0 million) was reclassified from Level 2 to
Level 1. Reclassifications between levels resulted from changes in market conditions.
                                                     F-134




Notes to the consolidated income statement


  31)
( 31) Net interest income

                                                                            2011                  2010
                                                                            €m                     €m
Interest income
Interest income from lending transactions                                   2,978                2,574
Total interest income from lending transactions                             2,978                2,574
Interest income from available-for-sale securities                           425                   381
Interest income from held-to-maturity securities                             256                   346
Interest income from other derivatives                                       100                   175
Other interest income                                                      – 643                  -750
Total interest income                                                       3,116                2,726

Interest expense
Interest expenses on deposits from banks                                   – 204                  -156
Interest expenses on amounts due to customers                             – 1,459                -1,228
Interest expenses on securitized liabilities                                  –7                     0
Interest expenses on other derivatives                                      – 114                 -213
Other interest expenses                                                       –6                    -2
Total interest expenses                                                   – 1,790                -1,598
Net interest income                                                         1,326                 1,128



Interest income from the lending business with customers continued to perform well.


The corporate customer business acquired in the course of the integration of the German branch of ING
Bank N.V. contributed EUR 18 million to net interest income in the last four months of the fiscal year.


In each of the periods under review, interest income from loans on which allowances had been recognized
amounted to EUR 0 million (previous year: EUR 0 million).


Other interest income includes interest income from hedging derivatives. Since the hedging derivatives
serve to hedge against interest rate risks in the lending business, the interest expense on the hedging
derivatives is reported together with interest income on the hedged item within the interest income item.


Overall, interest income increased by EUR 390 million during the reporting period.


The increase in interest expenses from amounts due to customers amounting to approximately EUR 231
million was attributable primarily to improved conditions for our customers and the continued positive
development of deposit volumes.


Interest expenses in relation to securitized liabilities relate to the Pfandbrief issued for the first time in
financial year 2011.


Overall, net interest income increased by EUR 198 million.
                                                                   F-135




  32)
( 32) Net commission income

                                                                             2011           2010
                                                                             €m              €m

Commission income
Payment transactions                                                           32             44
Securities business                                                           107             93
Other fees and commissions                                                      7              3
Fee and commission income                                                     146            139

Commission expense
Payment transactions                                                           25             20
Securities business                                                            19             20
Other fees and commissions                                                     61             57
Fee and commission expense                                                    105             96
Net commission income                                                          41             43



Net commission income in the payment transactions business relates primarily to account management
and processing of ATMs.


The securities business item represents customer brokerage services. The increase in net commission in-
come is attributable to an increase in trading activity.


Other fees and commissions have included fee income for loan processing in the corporate customer busi-
ness for the last four calendar months of the fiscal year following the integration of the German branch of
ING Bank N.V.


Overall, net commission income has remained largely stable.



  33)                                                    hedged
( 33) Net gains/losses on measurement of derivatives and hedged items

                                                                              2011          2010
                                                                               €m            €m
Changes in fair value o f
   derivatives used in fair value hedges                                    –1,003          – 88
   derivatives used in cash flo w hedges (ineffective po rtio n)               –1              1
   o ther derivatives                                                           12            21
Changes in fair value, net                                                   – 992          – 66

Changes in the fair values o f the hedged items that relate to the hedged
                                                                              963             87
risk
To tal                                                                        – 29            21




Given the change in market practices relating to the measurement of secured derivatives, ING-DiBa used
the overnight indexed swap (OIS) curve for discounting in fiscal year 2011, rather than the EURIBOR inter-
est rate curve used previously. The remeasurement of secured derivatives resulted in a EUR 45 million re-
duction in net gains/losses.


The increase in fair value changes of derivatives and hedged items was attributable to the significant drop
in the yield curve during the measurement period and an increase in the volume of hedges. The net
                                                                     F-136




gains/losses on derivatives that do not qualify for hedge accounting under IFRS amount to EUR 12 million
(previous year: EUR 21 million). For more information on hedge accounting, refer to note 23.



  34)
( 34) Other net gains/losses on financial investments and investment property

                                                                             2011          2010
                                                                              €m            €m

Net income from investment property                                                1          0

Changes in value of investment property                                        –1             0
Net gain / loss on investment property                                        –0              0
Net gain / loss on disposal of equity investments                                  0          0
Impairments on equity investments                                                  0          0
Dividends                                                                          0          0
Net profit / loss on equity investments                                            0          0
Impairments of available-for-sale financial investments                      – 136            0
Net gain / loss on disposal of available-for-sale financial investments       – 21         – 32
Net profit / loss on available-for-sale financial investments                – 157         – 32
Net gain / loss on disposal of held-to-maturity financial investments              0        –2
Net profit or loss from held-to-maturity financial investments                     0        –2
Net gains / losses on financial investments                                  – 157         – 34



Impairment allowances on available-for-sale financial investments are discussed under the financial in-
vestments item (note 5).



  35)
( 35) Other income

                                                                             2011           2010
                                                                             €m              €m
Inco me fro m receivables                                                    135              0
Other inco me and expenses                                                     2              6
To tal                                                                       137              6




Other income from receivables in fiscal year 2011 included a one-off amount of EUR 167.5 million arising
from the early termination of a long-term lending agreement with ING Bank N.V.
                                                         F-137




  36)
( 36 ) Risk provision


Risk expenses can be broken down as follows:

                                                                                   Specific
                                                                                impairment
                                                                            allowance including
                                                                            specific impairment
                                                           Portfolio             allowances
                                                         impairment            calculated on a
                                                          allowance            portfolio basis      Total
                                                                   2011                      2011             2011
                                                                   €m                        €m               €m
Additions to / reversals of risk provision                              4                     76               80
Direct write-downs                                                      1                      0                    1
Receipts from loans written off                                        0                      –4               –4
Other changes                                                          0                       0                   0
Total                                                                   5                     73                   77


                                                                   2010                      2010             2010
                                                                   €m                        €m               €m
Additions to / reversals of risk provision                             29                     94               123
Direct write-downs                                                      7                      0                   7
Receipts from loans written off                                        0                      –3               –3
Other changes                                                          0                       0                   0
Total                                                                  36                     91               127




Risk expenses related to loans and advances to customers

                                                                                      2011                  2010
                                                                                       €m                    €m
M o rtgage lo ans                                                                      70                    94
Co nsumer lo ans                                                                         8                   33
Co rpo rate lo ans                                                                     –1                     0
P ublic lo ans and o ther receivables                                                    0                    0
A sset-backed securities / mo rtgage-backed securities                                   0                    0
To tal                                                                                 77                    127




These expenses are classified analogously to the corresponding report on the risk portfolio (note 3), by
products reported under loans and advances to customers with similar characteristics. Further information
on risk expenses can be found in the risk report, particularly under the section entitled "Monitoring and
management of credit risks".



  37)                  write-
( 37) Amortization and write-downs of intangible assets


No other intangible assets were written down in fiscal year 2011. In the previous year, amortization and
write-downs of other intangible assets were exclusively comprised of amortization (EUR 3 million). Amorti-
zation of software is a component of other administrative expenses (note 39).
                                                             F-138




  38)
( 38) Personnel expenses

                                                                                   2011                     2010
                                                                                   €m                         €m
Salaries                                                                           135                        124
Bonuses                                                                               7                        9
Expenses for pensions and other post-employm