S&P Raises Ratings on ING’s Banking and Insurance Units

August 26, 2005

Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit ratings on Netherlands-incorporated ING Bank N.V. and fellow core banks ING Belgium SA/NV and ING Bank (Australia) Ltd. to “AA” from “AA-.” S&P also affirmed its short-term “A-1+” ratings on the banks.

At the same time, the counterparty credit ratings on ING Groep N.V., ING Verzekeringen N.V., and ING America Insurance Holdings Inc. were raised to “AA-” and “A-1+” from “A+” and “A-1.” The long-term counterparty credit rating on Lion Connecticut Holdings, Inc. was raised to “AA-” from “A+.” The rating outlook is stable. S&P also affirmed its “AA” counterparty credit and insurer financial strength ratings on the group’s core insurance operating companies, also with a stable outlook.

“The ratings reflect ING Group’s excellent competitive position and diversification, more focused and decisive strategy, improving earnings, and reduced leverage,” stated S&P credit analyst Richard Barnes. “The equalization of the ratings on the core banks with those on the core insurers recognizes the group’s highly integrated approach to financial management and strategic planning across business lines and geographies. The ratings on the core banks benefit from their affiliation with the group’s insurance business,” he added.

S&P said: “The group’s enhanced strategic focus has improved its risk profile and earnings quality. Key achievements have been the simplification of the management structure, and the disposal of underperforming and noncore businesses including U.S. individual life reinsurance and most of ING BHF-Bank.

“The one notch difference between the nonoperational holding companies and core operating subsidiaries reflects structural subordination, partly offset by the benefit to holding company creditors of the group’s excellent diversification.”

S&P credit analyst Paul Bradley indicated: “The stable outlook on the nonoperational holding companies and their core subsidiaries reflects Standard & Poor’s expectation that ING Group will build on the positive momentum of recent years.”

S&P said the ING Group “is well placed to leverage its excellent competitive position to sustain stronger and higher quality earnings.” The rating agency also pointed out that in the insurance sector it expects “the internal rate of return to maintain its upward trend over the remainder of 2005 and into 2006. In banking, ING Direct will remain the key growth driver, and continued focus on cost management should gradually improve efficiency measures.”

“The group is expected to continue to meet its internal targets for capitalization and financial leverage, and these targets are not expected to change. The further centralization and integration of financial management will benefit the group’s risk profile and firmly embed the linkages between the banking and insurance businesses,” Bradley concluded.

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