ING GROEP (0RIC) Risk Analysis
Risk Overview Q4, 2021
Source: the company's latest filing for the period ended Dec 31, 2021, filed Mar 11, 2022
Risk Change Over Time
No filing history is available.
- Share Price & Shareholder Rights - Risk 1Holders of ING shares may experience dilution of their holdings and may be impacted by any share buyback programme.
ING’s AT1 Securities may, under certain circumstances, convert into equity securities. Such conversion woulddilute the ownership interests of existing holders of ING shares and such dilution could be substantial.Additionally, any conversion, or the anticipation of the possibility of a conversion, could depress the market priceof ING shares. Furthermore, we may undertake future equity offerings with or without subscription rights. In caseof equity offerings without subscription rights, holders of ING shares may suffer dilutions. In case of equityofferings with subscription rights, holders of ING shares in certain jurisdictions, however, may not be entitled toexercise such rights unless the rights and the related shares are registered or qualified for sale under the relevantlegislation or regulatory framework. Holders of ING shares in these jurisdictions may suffer dilution of theirshareholding should they not be permitted to, or otherwise chose not to, participate in future equity offeringswith subscription rights.Any share repurchases could affect the price of our ordinary shares, ADSs or other securities and increase tradingprice volatility. The existence of a share buyback programme could also cause the price of our ordinary shares,ADSs or other securities to be higher than it would be in the absence of such a share buyback programme, andcould potentially reduce the market liquidity of our ordinary shares, ADSs or other securities. There can be noassurance that any share buybacks will enhance shareholder value because the market price of our ordinaryshares or ADSs may decline below the levels at which we repurchase any ordinary shares or ADSs.In addition, ING cannot guarantee that any future share buyback programme will be fully consummated. Thetiming and amount of share repurchases pursuant to a share buyback programme will depend upon a number offactors, including market, business conditions, and the trading price of the our ordinary shares or ADSs. A sharebuyback programme may also be suspended or terminated at any time, and any such suspension or terminationcould negatively affect the trading price of, increase trading price volatility of or reduce the market liquidity ofour ordinary shares, ADSs or other securities. Additionally, a share buyback programme could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategicopportunities
- Debt & Financing - Risk 2Discontinuation of USD LIBOR may negatively affect our business, results and financial condition
Changes to major interest rates benchmarks may negatively affect our business, including the level of net interestrevenue. Financial markets have historically relied on Interbank Offered Rates (‘IBORs’) benchmarks, such as theLondon Interbank Offered Rate (‘LIBOR’), the Euro Over Night Index Average (‘EONIA’) and the Euro InterbankOffered Rate (‘EURIBOR’). While some interest benchmarks have been reformed and will continue to exist, suchas EURIBOR, others such as EONIA and LIBOR have been or will be replaced by alternative rates. EONIA ceased tobe published on 3 January 2022, and is succeeded by €STR. All GBP, JPY, CHF and EUR LIBOR settings ceased on31 December 2021. ING has substantially completed the transition of contracts referencing these benchmarkrates and now offers the recommended alternative benchmark rates.The most commonly used USD LIBOR tenors will continue to be published until 30 June 2023 to support existingcontracts. However, the use of USD LIBOR for new contracts is no longer allowed from January 2022, with onlylimited exceptions.Public authorities have recognised that many contracts do not contain reference to alternative rates, orreference inappropriate alternatives, or cannot be renegotiated or amended prior to the cessation of therelevant benchmark. In response, the European Commission has implemented legislation that gives theCommission the power to replace critical benchmarks if their termination would significantly disrupt or otherwiseaffect the functioning of the financial markets in the EU. The EU has used these powers to put in place statutoryreplacement rates for EONIA and CHF LIBOR. The UK government has also granted additional powers to theFinancial Conduct Authority (FCA) to enable the temporary publication of a ‘synthetic‘ LIBOR using a differentmethodology and inputs. The FCA has used these powers to ensure the most commonly used GBP and JPYLIBOR settings continue to be available using a “synthetic” methodology for a limited time. The FCA has not yetdecided whether it will require the LIBOR benchmark administrator to publish synthetic USD LIBOR after June2023. On 6 April 2021, the State of New York passed legislation on benchmark replacement addressing certain contracts, securities and instruments governed by New York which involve interest rates or dividend ratesdetermined by the use of USD LIBOR without “fallback” rate provisions or with inadequate “fallback” rateprovisions. A U.S. federal version of such legislation (passed by the U.S. House of Representatives on 8 December2021) remains under consideration in the U.S. Senate. The discontinuation of USD LIBOR and related interest rate benchmarks could result in a number of risks for theGroup, its customers, and the financial services industry more widely. These risks include legal risks and costs inrelation to changes required to documentation for existing transactions. In addition to the heightened conductand operational risks, the process of adopting new reference rates may expose the Group to an increased level offinancial risk, such as potential earnings volatility resulting from contract modifications and changes in hedgeaccounting relationships. It is not possible to determine the full impact of the USD LIBOR transition on the Group. However, the experiencegained and solutions put in place for the other LIBOR rates, together with our investment in and ability to offer awide range of products using alternative rates, should help to limit any material adverse effect on our business,results and financial condition
Risk Highlights Q4, 2021
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 39
- Share Price & Shareholder Rights - Risk 1ChangedHolders of ING shares may experience dilution of their holdings and may be impacted by any share buyback programme.
ING’s AT1 Securities may, under certain circumstances, convert into equity securities. Such conversion woulddilute the ownership interests of existing holders of ING shares and such dilution could be substantial.Additionally, any conversion, or the anticipation of the possibility of a conversion, could depress the market priceof ING shares. Furthermore, we may undertake future equity offerings with or without subscription rights. In caseof equity offerings without subscription rights, holders of ING shares may suffer dilutions. In case of equityofferings with subscription rights, holders of ING shares in certain jurisdictions, however, may not be entitled toexercise such rights unless the rights and the related shares are registered or qualified for sale under the relevantlegislation or regulatory framework. Holders of ING shares in these jurisdictions may suffer dilution of theirshareholding should they not be permitted to, or otherwise chose not to, participate in future equity offeringswith subscription rights.Any share repurchases could affect the price of our ordinary shares, ADSs or other securities and increase tradingprice volatility. The existence of a share buyback programme could also cause the price of our ordinary shares,ADSs or other securities to be higher than it would be in the absence of such a share buyback programme, andcould potentially reduce the market liquidity of our ordinary shares, ADSs or other securities. There can be noassurance that any share buybacks will enhance shareholder value because the market price of our ordinaryshares or ADSs may decline below the levels at which we repurchase any ordinary shares or ADSs.In addition, ING cannot guarantee that any future share buyback programme will be fully consummated. Thetiming and amount of share repurchases pursuant to a share buyback programme will depend upon a number offactors, including market, business conditions, and the trading price of the our ordinary shares or ADSs. A sharebuyback programme may also be suspended or terminated at any time, and any such suspension or terminationcould negatively affect the trading price of, increase trading price volatility of or reduce the market liquidity ofour ordinary shares, ADSs or other securities. Additionally, a share buyback programme could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategicopportunities
- Share Price & Shareholder Rights - Risk 2AddedBecause we are incorporated under the laws of the Netherlands and many of the members ofour Supervisory and Executive Board and our officers reside outside of the United States, it maybe difficult to enforce judgments against ING or the members of our Supervisory and Executive Boards or our officers.
Most of our Supervisory Board members, our Executive Board members and some of the experts named in thisAnnual Report, as well as many of our officers are persons who are not residents of the United States, and mostof our and their assets are located outside the United States. As a result, investors may not be able to serveprocess on those persons within the United States or to enforce in the United States judgments obtained in UScourts against us or those persons based on the civil liability provisions of the US securities laws.Investors also may not be able to enforce judgments of US courts under the US federal securities laws in courtsoutside the United States, including the Netherlands. The United States and the Netherlands do not currentlyhave a treaty providing for the reciprocal recognition and enforcement of judgments (other than arbitrationawards) in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by anyfederal or state court in the United States based on civil liability, whether or not predicated solely upon the U.S.federal securities laws, would not be enforceable in the Netherlands unless the underlying claim is re-litigatedbefore a Dutch court. However, under current practice, the courts of the Netherlands may be expected to rendera judgment in accordance with the judgment of the relevant U.S. court, provided that such judgment (i) is a finaljudgment and has been rendered by a court which has established its jurisdiction on the basis of internationallyaccepted grounds of jurisdictions, (ii) has not been rendered in violation of elementary principles of fair trial, (iii)is not contrary to the public policy of the Netherlands, and (iv) is not incompatible with (a) a prior judgment of aNetherlands court rendered in a dispute between the same parties, or (b) a prior judgment of a foreign courtrendered in a dispute between the same parties, concerning the same subject matter and based on the samecause of action, provided that such prior judgment is not capable of being recognized in the Netherlands. It isuncertain whether this practice extends to default judgments as well.Based on the foregoing, there can be no assurance that U.S. investors will be able to enforce against us ormembers of our board of directors, officers or certain experts named herein who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in civil andcommercial matters, including judgments under the U.S. federal securities laws.In addition, there is doubt as to whether a Dutch court would impose civil liability on us, the members of ourboard of directors, our officers or certain experts named herein in an original action predicated solely upon theU.S. federal securities laws brought in a court of competent jurisdiction in the Netherlands against us or such members, officers or experts, respectively.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.