On Wednesday, ING Groep N.V. (AS:INGA) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.
European Dutch State Aid Discussions
Spencer Horgan – Deustche Bank: Two questions. The first one is, could you give us a bit more color on where we are with the European Union Dutch State aid discussions? Obviously you have reentered negotiations with the Dutch State, but I think I have seen the European Union is intending to appeal the March decision. So maybe if you could just give us your thoughts in a bit more detail around that? On the second one, I guess, it is a relatively smallish point, but if I look at the Insurance operating profit, the non-life result is quite weak this quarter which I think is coming from the external health and disability business. I guess the question is in your view is that a function of the weakening economic environment, rising unemployment, and linked to that should we therefore expect it to either remain weak or deteriorate if unemployment continues to move up?
Jan H.M. Hommen – CEO: Let me say the discussions with European Commission and the Ditch State, first of all, we are committed to continue the plan we have to separate Bank and Insurance Company. And we continue to make progress on that as you can see from the list of activities that we had listed to you. Secondly, as a result of the court case and the appeal that we won, we are having new discussions now with (those) government followed by discussions with European Commission with respect to making adjustments in order to reflect that court case. The fact that the European Commission has gone into an appeal. It’s not a surprise. They had indicated that I think already from the very beginning that they will do and they had so much time to do it, which I think was basically expiring in May ’12. So they have used that opportunity they have to go into appeal. In the meantime, we have discussions with the Dutch government. I cannot go into more detail than that to say that they have started and that we plan to have them soon together (indiscernible) European Commission, and then we will see what the outcome will be of those discussions. We will report on them, but I think we cannot report on them until we have them. It would be really premature for me to comment on them now. With respect to the non-Life, I think that’s right, that has to do with disability insurance that we have in the Netherlands and that – as a correlation, that is quite close to the year on employment or the economic activity in the country. Maybe, Matt, you want to add to that?
Matthew J. Rider – CAO: Yeah, you rightly point out. We did see a deterioration in the non-Life operating results and what we did is we saw emerging claims experience deteriorating a bit in the fourth and the first quarter, and we’ve now reflected a provision and I think importantly under the assumption that the experience that we’re seeing today continues throughout the balance of the year. So if it gets any worse, then we will have additional provisions. If it gets better then we recover it.
Dutch Housing Market
Michael van Wegen – Bank of America Merrill Lynch: Three questions, please. First one, I’m afraid (I go) back to the state support again as well. Last year you repaid part of the state support on the 13th May. That was a good date from a perspective of penalty cost. You’re saying you’re in discussion with the Dutch State right now, which seems to be largely focused on amending potentially the restructuring requirements. Do you feel that that could contain a change in penalty? If not, I guess it still makes a lot of sense for you to repay part of the state support back in May. Could you talk little bit about and what you’re thinking is there? That’s question number one. Question number two is on the Dutch housing market. You pointed out that you’re still missing maybe the full detail of the, let’s say, adjustment to the Dutch tax deductibility for our mortgage interest. Nevertheless, could you give some sort of thought about how you see this change impacting house prices and potentially your loan loss provisioning for the Dutch retail business? Then the third question, within the Commercial Bank, you shown that the NPLs for corporate loans and structured finance went up quite a bit in Q1. Can you talk us through what’s behind that? How you expect those to progress?
Jan H.M. Hommen – CEO: Okay, Michael good morning. Yeah, the states under repayment, we are committed to repay the Dutch State as quickly as we can, but we need to do that in closed consultation with them as well as with the European commission. So, I cannot make anymore comment on that to say that we like to do it as quickly as possible and we like to do it at the same time in a way that we are not in any way violating any type of rules that are associated with that nor that we do it in a way that we create a problem for ourselves with respect to Basel 3, the requirements of capital or given the economic circumstances. So, we need to have a very balanced and very let’s say careful approach to repayments, but the principal spends we like to do it as quickly as possible and we like to do it in a way that we are not creating a problem either today or later for ourselves. The housing markets, yeah I’m quite positive about the housing markets and the plan that is developed, but we haven’t seen the full details yet and I believe you need to look at the whole market, not just the market for homes that are being purchased, but also homes that are being rented. I think you need to have the full picture, because a lot of people in the Netherlands are renting homes that could be potential buyers and if you could get them to start buying homes, then I think you can get a kick start in the home market that could be very beneficial and that I think has been in my opinion and sufficiently taking care of yet. So I would like to see a more wholesale or wholesome proposal than we have seen so far today, but in principal that is we can support. Wilfred, do you want to make any comments on NPLs?
Wilfred F. Nagel – CRO: Yeah, I think the question was just specific to structured finance. What we’re seeing there is mainly an uptick in provisions in the transportation and logistics sector, which as we all known is cyclical and very sensitive to what is happening in the economy at the moment. If you look at the overall composition of the provisions of the risk cost, we don’t see massive shrinks that would represent a trend to your overall level as we said is about where it was in Q4 and in the composition the biggest change was that the Benelux SMEs/mid-corps came down somewhat and that we had the specific provision for CMBS that Jan already referred to.
Michael van Wegen – Bank of America Merrill Lynch: On that last one, I was actually asking about NPL shrink.
Wilfred F. Nagel – CRO: Well if you look at the NPL levels overall, they are almost stable, a slight uptick in Q1 and if you were talking specifically about structured finance, NPLs they are up a little bit more from about 2.1% to 2.5%.
Michael van Wegen – Bank of America Merrill Lynch: Could you explain why that is? Is there any specific behind that or is that just general weakness in the economy in the transportation sector?
Wilfred F. Nagel – CRO: Yes, it is the latter indeed.