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Second quarter results 2001

Second quarter results 2001. 16 August, 2001. Second quarter results 2001. Broad mix of clients and products proves its value Strategy c ontinuous dynamic process Overriding objective Top 5; annual performance targets published at full year results 2001 Changes in Managing Board.

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Second quarter results 2001

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  1. Second quarter results 2001 16 August, 2001

  2. Second quarter results 2001 • Broad mix of clients and products proves its value • Strategy continuous dynamic process • Overriding objective Top 5; annual performance targets published at full year results 2001 • Changes in Managing Board

  3. Second quarter reflects quality and sustainability of the income stream Restructuring programmes in SBUs are beginning to bear fruit Michigan National Corporation consolidated in BU United States Excluding consolidation, divestitures and currency translation effects RWA contracted by EUR 4.2 bn Highlights second quarter 2001 • Revenues up 8.1% despite weak market conditions • Operating profit before taxes increased by 3.8% • EUR 962 mln extraordinary gain from the sale of EAB • Interim dividend per share at EUR 0.45

  4. Status report on strategic initiatives:Strategy Wholesale Clients SBU • Revenue enhancement • strong focus on European client base • emphasis on financial institutions and large/medium cap corporate clients • emphasis on annuity products and selective investment banking products • Cost control • decrease in headcount from TOPS, equity business and disposal of certain international operations • Capital allocated will be reduced

  5. Status report on strategic initiatives • Restructuring programme BU Netherlands • new service concept: 10 pilots launched • agreement with staff council and the trade unions • general programme to stimulate natural attrition • Closure of countries and disposal of retail businesses • Morocco, Panama and Sri Lanka announced in second quarter • rationalisation/disposal of another 8 countries in the pipeline • Integration of MNC, Alleghany and ING Barings business in US • integration (systems, back office and closure/sale of branches) of MNC expected to be completed in October • integration Alleghany and ING Barings US on track; cost synergies expected in second half

  6. Key figures: profit and loss account % change Q2 01/ Q1 01 Q2 01/ Q2 00 (EUR m) Q2 01 Q1 01 Revenues Operating expenses Operating result Provisioning for loan losses Operating profit before tax Taxes Extraordinary result Net profit Net profit excl. sale EAB EPS (x EUR) 4,901 3,615 1,286 253 1,039 296 962 1,633 671 0.44 4,533 3,253 1,280 267 1,001 247 - 683 683 0.45 8.1 11.1 0.5 (5.2) 3.8 19.8 - 139.1 (1.8) (2.2) 8.7 14.4 (4.8) 78.2 (15.9) (1.0) - 91.9 (21.2) (22.8)

  7. Revenues and Capital Allocation in Q2 2001 per SBU Capital Allocation Revenues

  8. Operating profit before tax Q2 2001in % EUR 1,039 mln (+3.8%)

  9. Q2 01 Q1 01 Q2 00 (EUR m) - specific bad debt provisioning - cross-border risks provisioning Provisioning for loan losses Addition to FAR Total 262 (9) 253 - 253 280 (13) 267 - 267 160 (36) 124 18 142 Q2 01 Q1 01 Q2 00 (EUR m) 220 40 (1) 5 (11) 176 92 3 4 (8) 80 90 10 4 (42) Provisioning second quarter 2001 Consumer & Commercial Clients Wholesale Clients Private Clients & Asset Management AA Lease Holding Corporate Centre

  10. Risk provisioning as a % of RWA RWA BASIS POINTS EUR bn 39bp 35bp 36bp 26bp 23bp Risk provisioning (2001: excl. changes in FAR)as a % of RWA (right hand scale) * 2001 annualised

  11. Key figures: balance sheet % change 30 06 01/ 31 03 01 30 06 01/ 31 12 00 (EUR bn) 30 06 01 31 03 01 Total assets Shareholders’ Equity Group capital Risk-weighted assets* Total capital ratio Tier 1 ratio 614.6 11.6 34.7 286.1 10.19% 6.55% 601.7 12.2 33.7 278.4 10.19% 6.82% 2.1 (5.1) 2.9 2.8 13.2 (7.6) 6.6 8.4 * -1.5%adjusted for impact of acquisitions and exchange rates

  12. Consumer & Commercial Clients % change Revenues Q2 2001 Q2 01/ Q1 01 Q2 01/ Q2 00 Interest (EUR m) Q2 01 Q1 01 Commissions Operating result Provisioning Pre-tax profit RWA* (EUR bn) 818 220 598 166.4 847 176 671 163.3 (3.4) 25.0 (10.9) 1.9 10.4 175.0 (9.5) Trading Other * RWA June 2001 compared to March 2001 • Diversified, stable and consistent income stream • Costs are strictly monitored and under control • Higher provisioning levels, but overall quality of the portfolio remains strong • Performance BU Netherlands stabilising, US and Brazil perform well

  13. C&CC operating profit before tax split-up by market EUR 598 mln (-10.9%)

  14. Wholesale Clients % change Revenues Q2 2001 Q2 01/ Q1 01 Q2 01/ Q2 00 Commissions (EUR m) Q2 01 Q1 01 Operating result Provisioning Pre-tax profit RWA* (EUR bn) 229 40 178 100.5 213 92 113 96.9 7.5 (56.5) 57.5 3.7 (38.8) (55.6) (42.6) Trading Other Interest * RWA June 2001 compared to March 2001 • Aligning clients with products has led to the choice of high margin products and better allocation of capital • Negative impact of depressed equity markets is partly offset by broad mix of clients and products in general and the performance of GFM in particular • Strong increase in interest income and lowering of provisioning drive profitability

  15. Private Clients & Asset Management % change Revenues Q2 2001 Q2 01/ Q1 01 Q2 01/ Q2 00 Commissions (EUR m) Q2 01 Q1 01 Operating result Provisioning Pre-tax profit RWA* (EUR bn) 97 (1) 99 6.0 70 3 66 6.1 38.6 - 50.0 (1.6) (41.6) - (36.5) Trading Other Interest * RWA June 2001 compared to March 2001 • Healthy increase in revenues despite difficult market conditions • Integration of businesses within Private Clients and integration of Alleghany within Asset Management well under way • Assets under Management rose 4.5% to EUR 175.8 bn • Assets under Administration remained stable at EUR 110 bn

  16. Middle East 1% (1%) Europe 48% (50%) Africa 1% (1%) Wholesale limits by regionas per June 2001 ( ) December Eastern Europe 1% (2%) North America 27% (26%) Asia 7% (6%) Asia Pacific Advanced 8% (8%) Latin America 6% (5%)

  17. Wholesale limits by sector Manufacturing Services/Leisure Telecom Services 10% (6%) 5% (6%) 9% (10%) Media Agriculture/Raw 4% (3%) Materials Technology 2% (2%) 8% (8%) Construction/Real Estate 6% (6%) Oil & gas 9% (9%) Metals & Mining 3% (3%) Utilities Transport 10% (9%) 7% (7%) Retail Chemical 2% (2%) 5% (5%) Consumer (Non) Durables Pharma/Health Food etc. Automotive 3% (3%) 3% (2%) 6% (10%) 8% (8%) ( ) December

  18. Outlook full year 2001 The much hoped for improvements, in the economic and market conditions, have not materialised in the first half of the year and it is unlikely that there will be a significant improvement in the remainder of the year. Consequently, we expect our full year results to be broadly in line with our performance in the first half of this year.

  19. ANNEXES

  20. Jun Dec Investment grade 78% 81% Non-investment grade 22% 19% UCR 1 >AA UCR 2 >A- UCR 3 >BBB UCR 4 >BB- UCR 5 >B- UCR 6 >CC UCR 7 <C Internal credit risk ratingsTelecom Service Industry

  21. Jun Dec Investment grade 85% 89% Non-investment grade 15% 11% UCR 1 >AA UCR 2 >A- UCR 3 >BBB UCR 4 >BB- UCR 5 >B- UCR 6 >CC UCR 7 <C Internal credit risk ratingsAutomotive Industry

  22. Jun Dec Investment grade 86% 89% Non-investment grade 14% 11% UCR 1 >AA UCR 2 >A- UCR 3 >BBB UCR 4 >BB- UCR 5 >B- UCR 6 >CC UCR 7 <C Internal credit risk ratingsWholesale Clients ( ) December

  23. Jun Dec Investment grade 84% 86% Non-investment grade 16% 14% UCR 1 >AA UCR 2 >A- UCR 3 >BBB UCR 4 >BB- UCR 5 >B- UCR 6 >CC UCR 7 <C Internal credit risk ratings Wholesale United States ( ) December

  24. Jun Dec Investment grade 64% 66% Non-investment grade 36% 34% UCR 1 >AA UCR 2 >A- UCR 3 >BBB UCR 4 >BB- UCR 5 >B- UCR 6 >CC UCR 7 <C Internal credit risk ratings C&CC BU United States ( ) December

  25. Loan portfolio C&CC BU United States 2%

  26. Internal credit risk ratings C&CC BU United States 2%

  27. Composition of revenue(EUR m)

  28. Trading break down 1996 - 2001(EUR m) 97-1 97-2 98-1 98-2 99-1 99-2 00-1 00-2 01-1

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