Ladies and gentlemen, I'd like to thank the photographers. Nice work. Ladies and gentlemen, welcome shareholders, welcome representatives of the Central Works Council, and welcome representatives of the press and everybody listening via our webcast. On the front row, you see the members of the Executive Board from your left to right, Steven van Rijswijk. I see there's an error there. Jan Willem Fink, Ralph Hamers, and Koos Timmermans. Behind me, hopefully in the right sequence from left to right, Hans Wijers, Mariana Gheorghe, Eric Boyet, Robert Reibestein , Henk Breukink , Hermann-Josef Lamberti, and Jan Peter Balkenende. Off to the side, you see the Company Secretary, Cindy van Eldert-Klep. In the auditorium, perhaps people could rise if I state their name, so you can see them. These are people from the ING Bank board. I'll start with Isabel Fernandez, Aris Bogdaneris, Roland Boekhout, Roel Louwhoff .
Also in the audience, we have Mrs. Haase, who was appointed to the Supervisory Board last year, but this will take effect as of 1 May this year, so she has one week to go. We also have our external auditor, Marc Hogeboom and Guy Bainbridge. Our independent notary is Mrs. Joyce Leemrijse, employed at Allen & Overy. Questions about the reappointment of Eric Boyet may be asked at the corresponding agenda item. This meeting will be in Dutch, and interpretation is available via headsets as you have seen. The entire meeting is being broadcast on the ING website. Pursuant to the law and the articles of association, the shareholders have been convened, and this meeting is entitled to take legally valid decisions. Shareholders have not submitted any proposals to be considered at this meeting. Now, some formalities. There's nearly 3.9 billion ING shares entitled to vote.
As for the capital present or represented and proxy votes cast, that will be projected on the screen prior to the first vote. The minutes from the meeting held on 8 May 2017, that was last year, have been adopted and signed by the chairperson, the secretary, and the designated shareholder, Mr. Lockerbol, with special thanks to Mr. Lockerbol. They have been available since 8 November 2017. The report of the meeting will be drafted by Mrs. van Eldert-Klep , and we will be recording the entire meeting on audio for the minutes. As stated last year, I will be stepping down as Supervisory Board Chairman at the end of this meeting, and Hans Wijers will replace me as chair. I propose designating Mr. Van Oenen from Almere as the shareholder co-signing the minutes. Mr. Van Oenen, please rise for a moment.
Thank you very much for agreeing to do this. Perhaps we could have a bit more light in this auditorium because it looks like a dark movie theater here. That's much better. Thank you very much. Mr. Van Oenen has been designated by acclamation. Just some notes for our procedure at the meeting. We have quite a lengthy agenda and a rigid schedule. Please formulate your questions and comments briefly and concisely. If you have questions about your personal. During the meeting, photographs and video recordings are prohibited. This is to safeguard the privacy of the shareholders who are present. An explanation about agenda item two, from 2A through 2D. You'll be seeing quite a few successive presentations. After that, we'll take questions simultaneously on all those respective items, and I'll explain how we do that.
That was the points of order and the introduction to the meeting. Question off mic from the audience. Inaudible to interpreters. "I can't hear you," says the speaker. Question is repeated off mic, inaudible. According to our policy at the ING Bank, I can't imagine that we would be throwing the sandwiches in the trash, but please let us know. I'll explain a bit about one substantive point that's an unusual procedure in the meeting. That's as to why the envisaged remuneration decision was withdrawn. That's a bit about the content. You can see that is my introduction. After that, I'll proceed to the introduction by the CEO. According to the original agenda, as you are aware, and as we had distributed it, the shareholders would have the opportunity to state their views on changes concerning the implementation of the remuneration policy by the executive board.
By proposing this, the supervisory board intended to implement the actual remuneration policy that was adopted back in 2010 by this shareholders meeting, but never actually implemented. In addition to the supplementary proposal about how to carry this out, the structure selected comprised new elements to do justice to applicable legislation regulations, which include a more sustainable nature and a synchronized approach to the interests of shareholders and executive board members. The increase was not supposed to be in hard cash, but was supposed to supplement the remuneration package and shares that would need to be retained for five years pursuant to the Dutch Corporate Governance Code, known as the Code Van Manen. In addition, a minimum number of shares had to be retained individually. The proposal by the supervisory board instigated many objections and a lot of turmoil. We underestimated social support for our proposal.
There was also an impact on customers and our own staff, which we deeply regret. To curtail damage to our reputation, of course, there was some, but to curtail additional damage to our reputation, the supervisory board then deleted that proposal from the agenda. Nonetheless, I think it's useful to give you as the highest body of the company, a brief description of the proposal. We'll provide a bit of context as to how we envisaged that proposal at the time. First, there's the support that we received from the government. What were the story on that? Quite logically, during that period, the remuneration policy was subject to additional curtailment and restrictions. Over four years ago, all of that state funding had been repaid, plus EUR 5 billion on top of that. We felt that that was behind us. Of course, we were grateful that the government helped us.
I'd like to make that clear. Second, the ING is a European international system bank. We take pride in our Dutch roots, but acknowledge that 70% of us is foreign. ING is a very international bank, and that is reflected in the composition of our top executives. Much has happened in recent years. The ING is at the vanguard in digitization. We received an award for the best bank in the world, and we like to be regarded as a very international institution that not only people abroad, but also Dutch people are proud of. As an international institution, we envisage a level playing field among the countries, especially in Europe. In fact, that's essential, and we want to see this in a manner that helps us retain the reserves and buffers at the bank, and we'd like that to carry over in our tax payments.
We'd also like to have a remuneration policy that attracts and retains European talent. That level playing field has not yet been achieved in Europe. System banks such as the ING are subject to more rigid requirements in the Netherlands as far as capital buffers are concerned. The Netherlands applies additional capital requirements for the Dutch system banks, requiring the ING to maintain higher capital buffers than comparable other system banks in Europe. As for taxes, we noticed that in various countries, the bank tax has been discontinued upon introducing the Single Resolution Fund. That's a fund so that if the bank runs into trouble, that fund kicks in. In the Netherlands, ING still pays the bank tax, and of course, we pay into that Single Resolution Fund as well. Regulating remuneration has been established in European legislation.
The Netherlands is almost the only European country that took the opportunity to introduce additional measures and set a legal maximum on the variable remuneration at 20% of the fixed income. Clearly, a level playing field, especially a European level playing field, is important for an international company such as the ING to compete, especially abroad. Unfortunately, that European playing field has not been achieved yet. The Supervisory Board sees its duty as striking a balance between all stakeholders and between all aspects. First, we'll be evaluating the substance of the period that's behind us. Since we aim to grow as the largest European international bank, well, no, not the largest, I should remain modest, as a large European international bank, we need to carefully weigh Dutch against international aspects. In recent weeks, we demonstrated that there are no easy solutions.
The problem is the result of trying to weigh the European against the Dutch context. We underestimated the backlash from the Dutch context. We also tried to take the European context into consideration. What are we going to do? We know there are no easy solutions. First we'll listen, evaluate, think. Then consult as to what possible solutions might be to reconcile all those different interests of the national ones, the European ones, as well as your shareholders' interest to strike a balance between all of those. That was my introduction. There may be responses and an introduction by the chairman of the RemCo committee. You can respond to that after item two. Continuing. When we vote in a moment, we'll be doing that electronically via voting handsets as in previous years. We'll explain that to you when we vote.
That takes me to item 2A, the report from the Executive Board. You'll also find it on pages 3 through 60 in our annual report for your information. I'll hand you over for the brief highlights to our CEO, Ralph Hamers.
Okay. [Foreign language] Thank you, Jeroen. Welcome. Good to see you all again and to see such a turnout. Thank you. That means that you're interested in us and that you are following us with a critical eye. Well, we're very pleased with that because it just helps us to become better. We've been in the news a lot lately, led to quite a bit of commotion. Mr. Van der Veer commented on that earlier on, and I'm sure today you will have some questions about that as well. What I want to talk to you about is our performance this past year, and also take a look towards the future. What is it that you can expect from ING? What will ING be investing in?
What will we be emphasizing to make sure that we're in the vanguard in digitization and considered a leader in digitization now, but also in the future? That's very important because with the new competition that we see, it's very important that we continue to invest and that we continue on this path. This year, once again, we will repeat our strategy. Our strategy, as you know, is summarized on one sheet of paper. It's not longer, it's not shorter, it's not more difficult than this. The objective is the following: making sure that everybody, not only our customers, that everybody can remain one step ahead of the developments, personal lives and business lives.
Our strategy is focused on delivering a premium service by providing straightforward products, simple products, and by always being present, being available, by providing our services in a particular way so that people can take decisions themselves, but also by becoming better each and every day. Becoming better each and every day means that you'll be a lot better after a year. That's the way we stay ahead of things. When we introduced the strategy four years ago, we were talking about building an excellent customer relationship, and that in order to maintain this customer relationship, we wanted to invest in analytics in order to fully understand customers and also to make sure that we could continue to provide a premium service. That meant that we needed to innovate. We had to look further than traditional banking. We were talking about data analytics, platforms, et cetera.
Everybody's talking about it nowadays, but we already talked about it some time ago. That doesn't mean to say that everything is done and dusted and that we've covered everything. No, I'll be commenting on that later on. We do this by means of a strategy that we apply in more than 40 countries in which we operate. We've been very successful. 1.6 million additional customers this past year, more than 37 million customers. If we look at the number of customers that joined us over the past four and a half years, those years that we've been dedicated to the strategy, we have almost six million new customers over that period of time. Now, we do that by constantly focusing on what the customer really wants, and we measure it. We measure it every day. We call that the Net Promoter Score.
With the Net Promoter Score, we get feedback from the customer as to where there's room for improvement, how we can tweak things in order for them to become our promoter. In other words, they become our ambassadors. They tell their friends and family, "You've got to work with ING," which is how, up to today, we have two to 3,000 new customers each and every day, 3,000 to 4,000 new customers every day, thanks to our focus on the Net Promoter Score. Across the year, we are average in the Net Promoter Score in seven out of 13 consumer countries. By the end of the year, in nine out of the 13 countries where we are a retail bank, we were number one in Net Promoter Score. Just some examples to show you how we continue to improve.
On the one hand, we improve by innovating constantly, by improving our apps, our services, by making our products simpler, easier to understand, by being more available, by investing in accessibility. We work on that on a daily basis. This innovation that we do, with which we improve our services and our apps, not only within ING but also in cooperation with others. This is something that we also by investing in fintechs, because we don't hold the monopoly on good ideas. We've got loads of good ideas, but we don't have the monopoly, not yet. EUR 300 million is what we're going to invest in what we call ventures, fintechs that can help us out. We've announced that. Over and above that, we develop a lot of things ourselves. Let me give you some examples.
The apps that we've developed in cooperation between the Netherlands and Germany, just to show you that we are developing standard, the same apps across countries, but also in cooperation with other fintechs, Scalable Capital. Scalable Capital is a digital way to invest. We introduced this system in Germany. It has 20,000 customers, 11,000 of which are ING, and we moved to EUR 330 million in assets under management. We go even further. Also, in terms of our wholesale banking with the large companies, there we also invested this past year in applying blockchain, which is a different technology in order to see how and if we can fully digitize a trade stream.
We took one stream, for instance, soy from India to China with Louis Dreyfus, and one for oil from Africa also to China, with Mercuria, and the entire process or both processes were based on blockchain with all the parties involved, the transport company, the supplier, the bank, the insurance company, all the parties involved. This is a paper process because this process existed for more than 400 years on paper. We've been able to shorten the process in a period of 24 days because ordinarily it takes 24 days to carry out the process. We've been able to reduce it to three days in the digital process. These are major changes, major improvements in terms of speed, cost, and safety and security because the risk of fraud are much lower if you do it this way than any other way.
These are just a couple of examples of how we improve each and every day. Our focus in generating new customers is also focused on generating primary customer relationships. Primary customer relationships is a customer relationship with a customer that thinks of ING each and every day because they do their banking with us every day. If we have a relationship that is so close, so emotionally close to us, that means that we know the customer. We can be much more relevant for that relationship. It's a circular reasoning, really. This past year, we have 900,000 new primary customer relationships. Our goal was when we introduced a strategy to have 10 million primary customer relationships. We've got 10.8 million by the end of the year, which is a growth of 9%. We don't do this just to keep the customer satisfied.
Of course, we want to keep the customer satisfied, there's more business. We see lending increasing to EUR 27 billion this past year, we see more savings, EUR 19 billion increase in savings this past year. That just goes to show that we constantly focus on improved servicing to the customers. That leads to a bank that plays an important role in society in lending, but also in converting savings to lending, which is precisely what you can expect from a bank. We do this in a very modern, very digital way. Of course, this brings us to the financial performance. We see the numbers here, return on equity of 10.2% and an underlying net result, 4.9.
An improvement to the share price, if we look at it until year-end 2017, EUR 13.5 at the beginning of the year, EUR 15.3 at the end of the year. Same numbers, in a different sequence, a different order. Anyway, the first quarter this year, we see that the markets were somewhat more volatile and our share didn't perform as well. At the end of the day, if your performance is good, you can improve your buffers and our core capital ratio increased to 14.7%, which is way above the requirement at this point in time. We propose that from the profit that we made this past year to pay out a dividend of EUR 0.67 per share, EUR 0.24 of which has already been paid out in interim dividend. That is the proposal for today. Something else.
With this wonderful performance, with all our employees, 54,000 employees that we have worldwide. With all that, we've been named best bank in the world. I want to take a moment to look at this. These are the employees that are working with the customer day in, day out. Day in, day out, they listen to the customer and find out how we can improve our services and how we can translate that back into innovation, simplification, acceleration, security, availability. That's how you get an award like this. That's not all. We won't sit back and just accept being the best bank in the world. If you're the number one in the world, it's going to be very difficult to continue to be the best bank in the world.
We see how difficult this is in the market because we're facing a couple of trends in the market. Of course, the interest rates at the ECB is still negative, which is not a normal situation. It's not a situation that banks feel comfortable with. We see an expectation with customers that is increasing so that they have more and more expectations of the bank. That has something to do with the digital world we live in. Just to give you some idea of the impact of digitization on banking services, every year we have 3 billion contact points or moments with our customers. 3 billion times a year, we're in touch with our customers. 98% of these contact moments are digital contact moments. With a smartphone, 14% of our customers, almost 5 million customers, only work with a smartphone.
They've never been in touch with us in any other way. They even became customers of ING through their smartphone. That has an important impact, and it also means that all these customers expect that the services of the bank is at the very least at par with this level of service that they get from Google, all these worldwide technology platforms or Amazon or WeChat or Alibaba. They expect a service level that is personal, instant, available, relevant, and seamless. Just a click you need. That's what customers are looking for. That means that the banking products have become commodities. They don't stand out anymore. Those same customers expect the same level of services. Facebook. Facebook's always the same in each and every country. Uber is the same in any country.
Customers will expect identical services from ING in every country, in different languages, obviously. There's something else that we need to keep into account, and that is the trend that people have less and less time on their hands. Sounds strange. We've got all these new technologies, and you would expect that it's much easier to work, and that you have much more time on your hands because of all these technological advancements. People don't have time. If they're waiting for public transport, if they're in a restaurant, you see that people aren't really talking to each other. They're looking on their smartphone. That means to a bank such as ING, that it really relies on technology and digital world, that one of the ways to connect with the customer is to connect with those platforms where the customers are constantly active on, such as Facebook.
Of course, we've got offices, and offices provide services, but that's not a way to attract new customers. You can only attract new customers by being active in their digital world. There's yet another way to attract new customers, and that is to make sure that the customers know you by building a very strong brand, a love brand. That's what we call it. It's a brand that gives people the idea or the impression that it's worthwhile to make an effort. That's why people will make an effort to go and get a cup of coffee at Starbucks. Not because the coffee is better, nor because it's cheaper. No, because it's quite expensive. Because of the brand and the message the brand conveys.
If you want to attract new customers, somehow or other, you have to build the brand and convert it into a love brand so that people turn to ING in this digital world, and that's what we need to focus on. We see that our competition, really, is those worldwide platforms, those global platforms. We've got Alipay, Apple Pay, Google Pay. Amazon engages in lending. Alibaba, in one year time, lent EUR 9 billion in consumer lending and the largest money market fund in the world, EUR 10 billion assets under management. Those digital platforms, they constitute the competitors of the future. We've got to anticipate and continue to invest, which is precisely what we're doing. We're doing this by constantly developing. As I said, we develop our services, but we also need to develop towards a platform. How can you do that within the wholesale bank?
We have an application called InsideBusiness. It's a complicated name, really, for a portal or an application, if you will, on your tablet. As a treasurer or CFO of a company, you can do your cash management, you can make your payments with this application. If you want to turn it into a platform under our brand, you need to make sure that the application becomes an open application, and you should allow that competitors have access to your application so that the customer also gets an impression of what competing banks do. They need to get the whole picture. If you really want to make sure that a wholesale customer thinks of you can't just say, "This is my app," alongside the apps of other banks. You should say, "Okay, this is my app," and you can also upload information of other banks.
You can work with all that information. We are going to generate an overview for you. Only then will you give the customer control. Only then will you improve your services, add value, build a platform. What else? Recently, we acquired a company called Payvision. What Payvision does, it's interesting because Payvision really makes sure that the average SME or the larger wholesaler, no longer has to deal with all these different payment facilities, both in an online environment, a digital environment, but also offline, i.e., in the stores. You can pay with all these different applications in a store with a debit card, credit card, app, and so on and so forth. The wholesale customers don't like that anymore because they have to deal with all these different payment methods, and they have to facilitate that.
Payvision is a sort of intermediate, and they take care of streamlining the payment methods. There are 80 payment methods and 150 currencies. This app can make things so much easier for SMEs and wholesale customers. It also allows us to generate working capital. We would like to offer our customers Payvision, and over and above that, we can provide them with lending. We look beyond traditional banking services. We build platforms in order to improve relationships with customers, giving customers a better overview of their banking services. You can set up your own platform as we did in the U.K. with Yolt. Yolt is a simple app, really. You can download it, and all the banks that you have in the U.K. can be linked to the app. That way, you have an overview of all your bank accounts.
That's how you build a platform. If you want to be a platform towards the outside world, if you want to be unified, you've got to unify your own organization. A year and a half ago, I'm sure you remembered, we started or we announced our transformation program. We invest a considerable amount of money, EUR 206 million is what we invested this year. We still got EUR 450 million to go. In order to make sure, for instance, between the Netherlands and Belgium, to make sure that they work from one single platform in an aligned and standardized way. The organizations have been integrated already. We've already appointed people across countries, and we are preparing the platform so that customers can migrate to this platform. That way, you can standardize and align services across countries.
We also do this with another product Model Bank, this covers five different countries where we're only a digital bank. Here we see the update of all these programs, and we can discuss it later in further detail. We've also given a further explanation on this with our quarterly figures in order to explain where we stand in terms of this investment program. Right. I've talked about strategy and how we serve our customers. At the very beginning of my presentation, I said that our purpose went beyond our customers alone. Our customers and our purpose or purposes, that we want to make sure that everybody can stay ahead of the developments, both in their personal lives and in their business lives. I never said that our customers should stay ahead of developments, nor did I say that it's all about financial services.
Our purpose goes beyond that, and we see that reflected in the way in which we deal with sustainability. You know that over the past few years, CDP, Dow Jones Sustainability Index, FTSE4Good, always ranked us in the top two, three, four, five globally in terms of our sustainability policy. We fine-tuned it even further. In our sustainability policy, we clearly distinguish now between our operations in which we create a self-reliant society, self-reliant people. On the other hand, we're trying to reduce our footprint.
In a self-reliant society, you would think of initiatives such as the Think Forward initiative, in which we work with large technological companies, Dell, EMC, you mentioned data, consumers, organizations, academics, regulatory organizations worldwide in order to see how we can develop applications in order for people to get a grip on their finances so that people become self-reliant in a world in which the government is withdrawing, is not providing as much help. We're looking at how we can constantly inform people, make things clear and understandable for people. With everything that is changing, we need to make sure that people feel that they can control their own financials. This past year, more than 25 million people have been given this feeling of self-reliance, of control, understanding their financial situation. That's one of our goals. The other goal is reducing CO2, our carbon footprint.
We indicated this past year that our lending to electricity companies using carbon, that we want to reduce it to zero in 2025. We're doing that. We have our commitment to our customers, we're not engaging in new business with these companies anymore. We are also lending to projects, solar energy, wind energy. EUR 14 billion is what we have outstanding in these projects now. Here we are also making headway. Our sustainable assets under management amount to EUR 4.8 billion. Last but not least, talk about the future. This is about working in a different building. You may know that our building in the southeast of Amsterdam, we're going to leave our old building, very interesting building that we have, and we're building a new building because that's where we belong in the southeast of Amsterdam.
We're building a head office there, it's much more than a head office. We are building a campus. A campus is an environment that is accessible, where everybody should feel at home to work. Fintechs need to feel comfortable and at home to work in that building, but also academics, universities will have to feel comfortable in sending their talent to us. We really want to create this campus, making sure that we attract the talent that we need in the future in order to make us a bit better every day. That's all as far as looking towards the future. Thank you very much for coming again. Before I give the floor back to today's chair, I would like to thank the employees of ING once again. Thank you so much for helping us achieve this performance. Thank you.
Ladies and gentlemen, that was agenda item 2A, the report by the executive board, as well as 2B on sustainability. Those were the introductory speeches. We have some additional speeches before I open the floor to questions and comments. 2C is the report from the Supervisory Board. I'm referring to the annual report. The Supervisory Board met nine times in 2017. Important topics included the acceleration of Think Forward that Ralph was just talking about. The entire program about the strategy combined with extensive technological developments and corresponding transformation for the organization, additional capital requirements and so on and so forth. We also spoke at length about sustainability, internal audits, risks and risk mitigation measures, as well as the developments in the regulatory landscape, as we call them.
The Supervisory Board committees discussed a wide variety of topics comprising the interests of ING customers, the Excuse me, says the speaker. Other interested stakeholders, quarterly results, corporate governance, risk management, aspects concerning human resource policy. We also discussed the culture and desirable conduct within ING, as well as supervision-related costs. On to agenda item 2D. That's the remuneration report. I'll give the floor to the chairman of the Remuneration Committee, Henk Breunkink. Over to you.
Thank you, Mr. Chairman.
Thank you, Mr. Chairman. As you know, the remuneration policy concerns remuneration below the medium as adopted in 2010 by the HEM. In successive years, the Supervisory Board indicated both in the annual report and here that they intended to implement that policy when circumstances allowed. Since the state aid has been paid back over three years ago and the bank is thriving, that's been taken into consideration in the appreciation that shareholders stated on various occasions, both concerning ING as a company and our CEO. The proposal was to be addressed and voted on at the AGM. There was so much turmoil, as the Chairman indicated, that we've decided to withdraw the proposal. Now we'll discuss at length the bank and capital and taxes as well as remuneration.
As the Chairman said, there's no level playing field in Europe, if we don't keep up, we'll lag behind. What are the implications, and how do the different stakeholders view this? We'll start by talking about this before presenting a new remuneration proposal, which means that in the meantime, we do not have a new remuneration proposal in the making. As for the present remuneration proposal and the performance by ING in 2017, and the personal achievements by the Executive Board, the decision is to allocate the variable remuneration to the Executive Board members. The performance of the Executive Board members has been assessed based on financial and non-financial performance criteria, and generally performance slightly exceeded predetermined targets, which has carried over to individual percentages of approximately 17% for the CEO, approximately 13% for the CFO, and also approximately 13% for the CRO.
As for the CRO, this concerns the percentage for his period as a member of the Executive Board. The remuneration distributed for 2017 to the Executive Board and other fringe benefits appear in the remuneration report for 2017. Ultimately, after withdrawing the proposal originally presented to the AGM concerning adjustment of the Executive Board remuneration policy, the decision is to raise the fixed salary of the CEO on 1 January 2018 by 2.2% to EUR 1,750,000. The remuneration report reports the CEO pay ratio for the first time as recommended by the Dutch Corporate Governance Code. In 2017, this ratio equaled 1 to 33. That was my explanation. Thank you, Henk Breukink. I'm going to open the floor to questions. Questions about the items just covered. Questions to the auditor will be addressed later, not in this round.
We aim to cover these questions in about 80 minutes. The idea being that we take two or three questions at a time and then answer those two or three questions, giving those seated at the board tables time to think and enabling us to distribute the questions. In some cases, we may answer a question immediately as needed. Please take your positions at the microphones, and could we have a bit more light in the audience so that we can see who is at the microphones? Yes, that's much better. Could we have a bit more light? Perhaps this is the ING's energy efficiency effort. Thank you. So I'll start in the middle, and after that, I have a secret protocol about how I transition between microphones. You'll really get your turn provided those asking questions before you were not too verbose. Let me start with microphone 2.
Please state your name and your affiliation. So on whose or which's behalf you're speaking. Good afternoon, Mr. Chairman. I'm Hans Op 't Veld. I work at PGGM Investments, and I'm speaking on behalf of our customers, including the Care and Wellbeing Pension Fund. I'm also representing NN, the House of Verzekeringen, Menzis, Achmea, and APG Asset Management at this meeting. I'd like to highlight two topics. The first is remuneration. That's a hot topic and is extremely important to our customers. As I'm sure you know, this is not a secret by any means. We support a very moderate remuneration policy in general in the companies where we invest, so that the fixed salary should be a reasonable compensation and the variable remuneration should be extremely limited and should address only outstanding performance, both financial, social, and environmental.
You've set a maximum of 20% for the bonus, and that's stipulated by law as well. Now, systemic banks. You mentioned in your introduction that systemic banks are a special case. And we think it's important for you to consider that. See the interview with Mr. Knot in de Volkskrant mentioning the role of systemic banks in society and noting the risk that despite the increased shareholders' equity in the future, there may be a need for government aid. And according to Knot, you can never have a 100% private company. Next, what we saw after the proposal that was withdrawn in the end. Yes, that does impact reputation, and that really matters to our customers because we aim for long-term value creation.
We have customers whose pension will be distributed today, tomorrow, and in the 30 years ahead, and we aim to consider long-term value creation to consider not only shareholders as stakeholders, but as you mentioned, we as shareholders are fortunate that we're able to share our views at the AGM, but there are other stakeholders that also matter. Every shareholder will argue based on his own market perspective, and you need to strike a balance between all those different shareholders. That's the challenge. How many questions do you have? I'm getting down to the crux of the matter here. I have two things I'd like to bring to your attention. First, we urge you to consult at length to set the remuneration and as stakeholders and ING shareholders in the next year during the official consultation round, we'd like to communicate with the ING.
As you showed in your presentation, Mr. Hamers, the Net Promoter Score is an important standard for your customer satisfaction to continue publishing and report. Mr. Op 't Veld, we're not here for extensive commentary. It's about your questions. My specific questions concern sustainability. We request that you indicate how your value creation model will quantify how SDG 11 and 12, those are decent jobs, and how you expect to also assess your impact in sustainable output and what you hope to achieve in achieving a carbon-free economy. You say until 2025. Will this be a satisfactory contribution or do we need to accelerate this? Are your social stakeholders satisfied with this course of action? For the science-based emissions reductions target, how will you ensure that the zero target is attained? Thank you for this lengthy exposé. On to microphone three. Mr. van der Veer.
I have very brief questions. Why is the ING pension fund outperforming the individual that just spoke representing all the pension funds? Another very brief question. Has Mr. Wijers already congratulated Mr. Timmermans? A substantive question. It may sound a bit blunt and harsh. How is it possible that the ING is being made to look ridiculous once again by the Ministry of Finance because of that disclosure of the intended salary increase in shares for Mr. Hamers? The same happened with Mr. Hommen. There was a public backlash. The politicians immediately changed their view like chameleons. Mr. Hamers, as Chairman of the Executive Board, is tarnished because of the entire course of events, if not seriously tarnished. That's unfortunate. The ING took a beating as well, but especially Mr. Hamers, both in the Netherlands and abroad.
I think that you as Chairman, Henk Breukink, on the Remuneration Committee, why didn't you sound out several people who could have notified you about this in advance? You don't have to use Soviet practices because a politician was left behind there. We could have simply explained that over a nice cup of coffee. That's really a shame. I believe that there was some reporting to the Ministry of Finance. You don't have to answer that one, but I know the drill. We've been there, done that, and I think that's reprehensible. That's what I wanted to tell you. This was Mr. Van der Bos. I asked you to state your name, but we know your name. I'm Mr. Van der Bos. I'm a private shareholder. I'm speaking here on my own behalf. I could also speak indirectly, but I am a direct shareholder.
You've spoken here every year and the years before that. A brief question, Mr. Wijers. Did Mr. Timmermans congratulate you? Wait a moment, Mr. Van der Bos. You'll get answers. Microphone number six. Chairman, I'm Lilian Marijnissen, and I represent the alternative ING shareholders meeting that took place outside. I'll only take a brief moment because I see a lot of people wondering what this Socialist Party member wants. With the four shares I'm proud to hold. Yes, I am proud to own four shares representing the Socialist Party, and I'm here to ask you a favor in the interest of the ING, but especially in our common interest. In recent decades, ordinary people have hardly advanced at all. Mrs. Marijnissen said a motion of order. We asked you not to record on video, and you agreed with that. Would you please stop over there? Thank you.
Yes. Sorry for interrupting you. No problem. We just had the alternative ING shareholders meeting, and there was a healthcare staff member working in a nursing home who has an account at the ING. As a consequence of the recession, tens of thousands of her coworkers were made redundant, and the work pressure increased. There was a crane operator who had to continue working way longer than he expected, and he had no idea what to do. We had a cleaner who cleans the ING premises with a passion every day, and he told me how long he would have to work to make EUR 3 million, and he would have to continue working for 120 years, which means that he would have to continue working until 2138 to earn EUR 3 million.
What I'm trying to say is that a lot of people see and feel day after day that they're expected to do more but keep getting less in return. The differences are increasing, the gap is widening, and people are starting to despise not only the high salaries of senior executives, but they're starting to despise the system as a whole. I was amazed that the Supervisory Board Chairman, in fact, continues to defend and support the pay raise, saying that people should receive top league pay despite the survey by the Erasmus University last week indicating that this doesn't work. The lawyer, Loken, demonstrated that those exorbitant payments for top executives damaged the company over the short term, and he proposed examining the rest of the firm when you consider salaries. That's my appeal, and those are my questions for today.
Let's go for an alternative remuneration policy. The EUR 3 million should be off the table, and the pay raise of the Executive Board members should be linked to pay raises for the employees by covering everybody in the same collective labor agreement. There will still be options for differences because everybody knows that people make different rates of pay, but let's keep the balance reasonable and fair. Let's make the ING a bank we can be proud of again, and let's demonstrate that we have learned things from the recession that will benefit the ING, and it will benefit our country as well. Thank you, Mrs. Marijnissen. We've had three speakers. We're going to start answering the questions.
Let's see if Henk Breukink is ready, because I think we can cluster the questions from all three speakers about remuneration. Then we'll see what else we need to answer. I think that I've heard three questions. One asked briefly via the investors, one by Mr. Van der Bos. I'm not sure I heard a question from Mrs. Marijnissen, but I'll try to answer it anyway. What I understood from the first question was an appeal for an extensive consultation. I think it's good to explain briefly how we did it in recent years, because you might say that this time the consultation was rather brief and superficial. The reason is because for years, as I explained in my brief introduction, we explained our view. At those opportunities, we already inferred the sentiments among the different stakeholders.
As for the question or the request, I said we're going to listen, and we'd certainly like to hear more from you. The second question from Mr. Bos concerned the extensive reputational damage that transpired, and couldn't we have listened more, and there were also some remarks about our interactions with the Ministry of Finance. I do not think it serves any useful purpose to highlight one stakeholder or a few stakeholders in particular if we're trying to see what happened based on the proposal that we envisaged. I think as supervisory board members, we need to conclude, as we specifically formulated, that the support turned out not to be present and there was a major uproar, and we apologize for that.
In no specific sequence, we apologize to our employees, we apologize to our customers, and we also apologize to other stakeholders who may have felt that we had betrayed their confidence a bit in our actions. I feel no need to elaborate, and I was not requested to do so either on the relations with one specific stakeholder, and my reply is basically the same as my reply to the first question. In previous years, we have certainly listened at length, and we were a bit dismayed at the response from several sources, and that's why we decided to withdraw the proposal. My only response to the statement by Mrs. Marijnissen is as follows. There will be an interest and there is increasing interest in the internal relations. As far as corporate industry remuneration is concerned, I agree with you on that. I'm not talking about the pay raises.
I'm talking about the ratios. For example, comparing the CEO's pay to the average employee's pay, so the pay ratio. FYI, I'd like to tell you the following. I have a list in front of me, ranking all companies listed on the Amsterdam Stock Exchange based on pay ratio, and the highest is at 292, and ING is near the bottom at 34. Somewhere between 31 and 34, depending on whether or not you take the proposal on board. I'd like to put paid to the assertion that we're in an extremely high league. Some of the questions will be answered by Ralph. These questions relate to the sustainable development goals, the SDGs, and our ambition to reduce carbon use in society. SDGs aim for a self-reliant society, and we assess that the same way we assess empowerment.
That's a survey where we ask people to provide feedback about how they feel. Of that 25 million that we've attained, we're trying to get to 100 million thanks to the Think Forward initiative. SDG 12. There are two aspects that come into play there. The first concerns our own footprint. What can we influence in the company that we run based on the energy that we purchase, and the buildings where we operate, and the paper that we use to meet the scenario of one and a half or two degrees less? That scenario. We're entirely focused on that. We aim to continue reducing energy procurement and to become entirely green by 2020 in all 40 countries where we operate. That's no small challenge because in some of the countries where we operate, renewables are not readily available. We're committed to this goal.
In addition, the head office and the campus that I just presented, that building will have the highest sustainability rating, Level Outstanding. You don't need to memorize that, but it will be entirely self-sufficient in terms of the energy consumed. That's our own footprint. As a bank, however, and I think that's been mentioned too, we have an even greater influence. As you shareholders influence us, we can also influence our customers in terms of the loans that we grant and how can we enhance our indirect influencing powers. We do that by developing various products and issuing green bonds, as well as designing loans with interest rates that depend not only on the credit risk but also on sustainability rating of that company. We've done many of those in the past year, including with Philips.
Those are products that we designed ourselves, and globally, they're in great demand at present. The next question is how are we going to measure improvement in that indirect footprint, or in any case, a decrease? That's quite a bit more difficult, as you know. There are many companies and many scholars and NGOs at work to achieve that. The first step is to obtain the right data. If we're talking about large oil and gas projects, that's not so difficult. If we're talking about the whole kit and caboodle of SME entrepreneurs, that's much harder because they don't disclose that information and probably can't even measure it. We're talking with NGOs with the 2° Investing Initiative, and we're talking with colleagues, first of all, to get reliable data.
We're already working on some reports because we think that ultimately, if we simply get down to brass tacks, we'll get closer to the truth. The assessment methodologies are not entirely reliable yet. Where we can do it, we learn on the job, and we're all committed to this. We're very serious about it. Mrs. Marijnissen, during the deliberations in the House of Representatives, the question was asked as to why the senior executives at ING are not subject to the collective labor agreement, and that concerned the Dutch collective labor agreement. I can certainly understand why people wonder that. I basically answered that 70% of our employees come from abroad and may not understand the logic of adhering to the Dutch collective labor agreement. With the senior executives, you run into a problem.
You have a head office, and you need to retain that international composition. It will become increasingly international as well. The issue of remunerating those senior executives based, if you apply only the collective labor agreement from the Parent country that's extremely complicated if you're trying to put together a bank that, as Mr. Hamers described in his introduction. I'm going to move on. I feel sorry for the people all queued up at microphone one, I'm going to move on to microphone five and then another one, and then back to two. Good afternoon. I'm Mr. Sadathy. I hold only one share, I have not had any relationship in terms of duration that closely approximates my relationship with ING or ING's predecessor, the Postbank, because I feel a very strong principle and sense of loyalty.
You don't switch banks easily because a bank is like your dentist and your football club and your hairdresser. I don't have to convince you that you don't just go anywhere. The question is whether Mr. Hamers will remain that principled and loyal. We'll never find out. It may be it's my fault, the person who rose through the ranks through the ING has said nothing about his future. We're still in the dark about that. We do know how strong the principles of the supervisory board are because on one day when Mr. Hamers was promised a 50% pay increase, five days later, they reversed that decision, which was even substantiated. I went for it. I could understand it. The Champions League, we want to keep him here.
If Mr. Hamers is tempted to switch to Iniesta in Barcelona, I can blame only one group, if he follows the example of player Iniesta and goes to Barcelona, because these people were unable to persevere in their own justification. My question is, how long are you here that Mr. Hamers will go? We know that's just a matter of time. We know he'll be leaving. Do you know when, what time, what circumstances? We'll answer that later on. Microphone four, Max Monko. I'm retired from the Heineken head office, and I'm a former municipal council member. I'm speaking on my own behalf. My question was, when there was this state merger of the ING, was there any official record that the remuneration would be subject to a maximum? I didn't find that anywhere. Second, we're talking about remuneration. What about the ING capital buffers?
Are they going to be increased gradually by 10%? What's the story there? I have a few more questions regarding or to Mr. Hamers. Congratulations on your stellar performance. Kudos to you. My question is, you're going digital. That's wonderful. How do you explain the redundancy of 2,000 people from the IT department without any retraining? My other question is, wait a second. We can get a cup of coffee and talk to us later, ask for the number of customers that's increasing at the ING. Excellent work. What's the ratio between the number of customers and controlling money laundering practices at the ING? Thank you. Money laundering practices. Yes, we got that. At the ING, that is an issue. You're getting new customers. Okay, that was it. Mr. Spanjer. I see I have a fan on the board.
Mr. Spanjer, for your minutes, I'll start by quoting a section of what you said in 2009 when you left Shell, Mr. van der Veer. You were still the senior executive, in a speech you said, if I remember correctly, you not have done better or worse if you had earned 50% more or 50% less. That you said that in 2009. Do you have amnesia? I'd like you to answer that, because you stated that phrase yourself. Second, on committees, there were two politicians, Jan Peter Balkenende and Hans Wijers. Jan Peter Balkenende was really in trouble when the ING had a problem, and Hans Wijers also knows the political drill in The Hague. Didn't they say, "Okay, Jeroen, don't go there because you'll have to pay the piper." Did you simply listen and forget what was said? Why didn't you take that seriously?
I can't imagine that Jan Peter Balkenende didn't warn you because he's a man of integrity.
Okay.
I think it's time to proceed to the answers. Okay. First, the question about the capital buffers. Mr. Breukink can give it some thought. That way, Koos, could you go ahead?
If we look at the capital buffers of ING, we have 14.7%. That was our Core Tier 1. As you most probably know, about 10 years ago, it was somewhere around 5.4%. Those buffers have been strengthened. Are we happy with the numbers? Answer is yes. Is anything going to change? Basel IV says that we have to measure things in a more stricter way. As a consequence, there will be some modest capital that we will have to generate. It's not that substantial. We can take our time. In-house, we are quite pleased with the capital buffers that we have in place. Concerning your question on IT staff.
Well, when we have a program in which we need to transform the company, we always offer our employees to follow a retraining program. Question is whether you can really retrain every employee. In the case of these IT staff members, concerned skills that not everybody could learn. That's where everything comes to a standstill for some people. We try to find other opportunities for these people outside ING, but there are quite a number of people that stick with ING and retrain for a different job. We're very pleased with that. If as a bank, you have a strategy, and every so many years, people leave the company. The people that you still have in place have to be available to fill in the vacancies. Mr. Hamers. Yes, of course. Changes in technology occur very rapidly.
Some people can't keep up, simply, and others can, and you're quite right. We have to anticipate on these developments. We have to anticipate, and we do that. We do everything in our power and in the Netherlands in any case. Everybody has to make a plan in terms of how he or she sees his or her career develop. Everybody within ING knows that if you want to follow training, it has to be relevant for your career within ING, but also outside ING. The question about money laundering. First, Henk, and then we'll come back with the money laundering. Okay. Two questions. I heard two questions. The first one was about how principled this supervisory board was in taking the decision on whether or not there are any temptations for our CEO.
With our supervisory board, we don't think in terms of principles, nor do we think in terms of attractions or not, whether it concerned the CEO or others. To be quite honest, it's quite irrelevant. Why am I formulating my sentences in this way? This is because we consider it our duty in terms of the senior management of the organization to offer remuneration in conformity with the policy that we have agreed on. This policy, while I can repeat it endlessly here, that way I would bore you with the systems and things, and I'm sure you don't want that. That is the reason why, ultimately, we came up with the proposal that we came up with. There's nothing principled about it. There was nothing principled about withdrawing the proposal.
In fact, as we said time and time again, the commotion and the upset in several parts of society, I can add to that, particularly, if not exclusively in the Netherlands, but it was so considerable that we felt it was no longer responsible to pursue this because possibly it could lead to further reputational damage or other damages. As a supervisory board, we didn't want to take that responsibility. That is the reason why things transpired as they did. In answer to the question of the gentleman who was at the back of the room about capping or not capping remuneration. Indeed, after repaying the state bailout, formally, we did not have a remuneration cap. Upon request of many parties surrounding us, so-called stakeholders, upon their request, we have talked about a moderate or a controlled policy in terms of remuneration. Controlled.
You may have your questions about controlled, but if we're talking about controlled, who would be our peers? How would we compare ourselves? Well, at the time we said, okay, upon request of many, let's not compare ourselves to the financial sector because the idea was that remuneration was much higher in that sector than in others. Why don't we compare ourselves to the Euro Stoxx 50? 50 European companies that we can benchmark ourselves with. At the time we said, okay, let us then also agree that a controlled remuneration policy to us would mean that in no case we end up over and above the median. In other words, we've established a policy that would remain below the median, and that was also the basis on which we ultimately made the proposal that ultimately we withdrew.
Also with the increase that we had increased, we would still be below the median with about seven percentage points. That is our interpretation of this notion controlled. Mr. Spanjer, now I can't remember which question was for me, but I'll hand the floor back to the chairman. Well, the thing is, I heard more observations than questions, perhaps you can summarize what your question is. Yes, I can, Mr. Broekink. In your organization, you have two politicians, Mr. Wijers and Mr. Balkenende. Did they not warn you? Did they not say, "Mr. Breukink, Hans, better not pursue that plan because it's too sensitive." Or did you think, "Oh, I'm just not going to listen. I'm not going to pay any heed to the politicians." I don't think you're that kind of man.
I'd like to know whether or not these two politicians, Mr. Balkenende, he was here from the very beginning, whether they advised you at any time and what his advice was. Second, Mr. Van der Veer, when he left Shell, he himself said, "Whether I'd receive a 50% increase or not, it didn't matter because I wasn't going to work any harder anyway." That's what he said. That was in 2009. Or did he perhaps forget? Okay. As far as the first part of your question is concerned, allow me to attempt to answer that part of the question. I think it's important that not only formally, as we say, that we take into account the interests of all the stakeholders, but we also make sure that our remuneration committee, but also our full Supervisory Board, should be able to weigh all those interests.
In other words, that means that obviously there was a very broad discussion, first of all, in the remuneration committee, which I chair, but also subsequently in the full Supervisory Board. That means that we were quite aware and still are aware of the fact that this was not going to be well-received in all parts of Dutch society. That means that we were quite aware that there was a risk involved. We took our time, we listened carefully, we exchanged arguments. Also what you said. You said, "Well, you should be able to gauge the sentiment of society." True, but there are other stakeholders and other parties that reasoned the contrary, really, with just as much powers of conviction. That meant that there were very good reasons to go ahead and do this.
As with many decisions, whether they are taken in an Executive Board or in this case, in a Supervisory Board, it's all a matter of weighing interests and gauging the situation. With the benefit of hindsight, as the English always say, you might say that perhaps we didn't act correctly. If that's what you would say, I would agree with you. Mr. Spanjer, thank you very much, Henk Breukink , for your explanation. I'd like a comment by or a response, an answer from Mr. Van der Veer, because that's what he said at a speech at Shell, did he not? How come after so many years you deleted that from your hard disk? Well, let me answer. Yes, indeed, I said this. By the way, the context was an interview with the Financial Times at the time.
In fact, it was a comment with respect to remuneration that applied in England and the U.S. at the time. At the time, they were of a different order of magnitude than the salaries of senior management at ING. Of course, when you say 50%, you have to define 50% of what. Allow me to give you an indirect answer, this is in line with what I said in Parliament in the Netherlands. If you look at Dutch media, very often they say, "Well, why does so-and-so have to get an increase?" They give you the impression that it was a cash increase, but there were shares that he had to hold on to for a certain period of time, et cetera. The essence is always so and so is not going to walk away anyway. Well, I think that's very short-sighted.
I think this is one-third of the entire story. Allow me to help you with the other two-thirds of the story, because that is why you remunerate people at all. This is something you need to keep in mind as a supervisory director. Everybody here in the room and just, you can read the newspapers about this. Everybody always says, "We want to increase our CLAs because we're running behind Air France." They say, "At Lufthansa, they're making more money." In the market, money is always an issue. People are always comparing themselves. It's called the labor market, or it's called in conformity or in line with the labor market. Whether you want to or not, it's just one of the premises that you have to remunerate someone.
If you want to remunerate someone systematically in a very low way as compared to the market, and I don't know anything about football, but if someone wanted to have Ronaldo for the Jupiler League, I didn't know what it was, but anyway. That's what I said. You must understand the idea. You have to take a look at the market. That's the whole idea behind it. The other two issues are just as important, and particularly to the supervisory board, given their responsibility. The bank needs to transform. We will have to be able to recruit people from outside. It's not that we are stealing bankers from ABN AMRO. No, we need many more IT staff. We need fintech people. We are competing with Google and Apple and other high-tech companies. If we can't get those people, it'll slow down our transformation.
If, as a bank, you transform too slowly, you saw these pictures of the fintechs, of Mr. Hamers. You won't be able to increase your customer base, and you will slow down, and you don't want that. We need remuneration for senior management in a salary structure. It's about the entire structure. We need to be able to give people shares. We want a salary structure that is such that we can attract people from the outside. If we don't do something about that, it'll weaken the bank. Third argument being, at ING, fortunately, we have young, very young people, passionate people, and they all want to be Mr. Hamers or Mr. Timmermans or whoever here at the table, just for a day.
If they think ING pays a reasonable salary but as soon as you become a part of senior management they put a stop to good remuneration. Young people look around, and it's not in the interest of a strong bank. If you really want to become a strong bank, if you want a fast transformation, you want to make sure that you can develop your own staff, that you train your own staff, but you will always have to recruit people from the outside. The reason why you have a remuneration policy, those reasons may be much more complex than you might think if you read the newspapers. We think it's fair in an international environment, we don't want to underpay one nationality as compared to the other. That's not a good thing. Not if you want to become a strong European bank.
Mr. Van der Veer, I'm sure you also read the "Financial Daily." I assume that's the case, it was the 13th. There was a PhD at a university. I think it was last Saturday, if I'm not mistaken. There was this Belgian financial expert who says money is no longer important for a CEO nowadays, the non-financials are important, you are concentrating on the financial side and not on the non-financial side of remuneration. I've never heard you talk about that. This Belgian financial expert said that at a CEO level, at Mr. Hamers' level, Mr. Timmermans' level, at those levels, money is no longer an issue, but the non-financial elements of salary are important. Apparently, you didn't pay enough attention to that. That is one of the reasons why young people are not interested in ING.
I would advise you to concentrate more on that. Mr. Spanjer, I disagree with you. You referred to a PhD. Ms. Jorna has also referred to that, half of the systemic banks in Europe have hired a CEO from outside the sector. Of course, we're a Dutch bank. There are just certain things that you should look at from a different angle. About the non-financial elements, let me be brief about that. The fact that we have a good mid-level staff, of course, it's something we take into account. Non-financials. If that means that you can drive a Maserati lease car, well, that's simply something we will not offer at ING. Chairman. No. The money laundering. No. First a question. The first question was whether there was a document about a state agreement. That question was answered.
Your question about the study or the investigation of the Public Prosecution Service, ING is being investigated with respect to detection of corruption and money laundering. This is an ongoing investigation. We're working with the Public Prosecution Service, of course, we cannot comment on that because it's an ongoing investigation. I was referring to new customers, I was not talking about the investigation. I'm talking about controlling risks. If we have new customers, new customer relationships means obviously that you have to look into those customers. More customers means more research, more studies. We're working on worldwide programs in order to align these investigations or these checks. Of course, we're improving the systems on information about the customers. Third, we also look at the transactions that they engage in.
We try to look for tools such as digital tools in order to get a better impression of those transactions. Step by step, what you try to do is improve the checks and balances for customers, you also try to cooperate wherever possible with central banks or other banks to see whether you can identify any patterns across banks that these people work with in order to have a better understanding of when there's a risk of money laundering. Thank you. Microphone number 2, Mr. Vreeke. Good afternoon, ladies and gentlemen. My name is Robert Vreeke. We Connect U Public Affairs and Investor Relations. In 1991, Ralph Hamers and myself were hired by ING Bank International, within two years, you became the best emerging market worldwide. That meant that the bank increased its profit with at least EUR 1 billion additionally.
Ralph Hamers, at that point in time, was paid according to the Balkenende standard. He came from ABN AMRO Bank. You stole him from ABN AMRO. Ralph probably thought, "Well, being the best emerging markets bank, that's a good thing, but I'm going to go one step further. I'm going to make it the best global market bank." He made sure that ING is in the top five of the most sustainable corporates in the world, over and above Unilever, Shell, anything that is sustainable, over and above the Triodos Bank, for instance, and that is worth EUR 5 billion. The top CEOs in the Netherlands make, on average, EUR 10 million, which is 50 times the Balkenende standard, the Prime Minister standard. The good thing about ING is that it's very thrifty, and Mr. Balkenende knows that. Mr. Hamers is at 10 times this Balkenende standard.
It's penny-wise, but pound-foolish. You say nobody's leaving out of senior management, but Eli Leenders went to UBS, and I understand that he doesn't have a senior management position there, but he makes EUR 5 million a year. You will know whether it's true or not, but that's what I heard. Ralph Hamers also keeps an eye on innovation, sustainable innovation. ING is going to make a lot of money with that. When I talk to him about the Rainmaker, things like that, he really likes those ideas, and he also likes my ideas about WakaWaka and chair heating, and even the Vatican asked him for advice, which is very important for all of us. You want to have 1,000 real estate units with solar energy. When I send an email to Ralph Hamers, he answers me immediately, and that's very important.
Other banks in the Netherlands, Rabobank, Triodos Bank, they seem or are perceived to be the most sustainable banks, but they are not, particularly not at a global level. How are you going to improve your communication in that respect? That's my question. A side effect is that Jeroen van der Veer came from Shell, which was a very polluting company, and now he is working for, along with Mr. Hamers, for the most sustainable bank in the world, which deserves a compliment. You moved from fossil to very, very environmentally friendly. I will be giving you a WakaWaka, which is the crown jewel in sustainability. Next year, you will want to have it in orange. Wouldn't it be wonderful if it became the Royal ING? Royal ING would generate a lot of additional money. Two other issues. Cybercrime.
What is the percentage of the equipment at ING is Apple equipment? Because Apple equipment isn't as easy to hack, and people are much more productive with Apple equipment. If you don't have Apple equipment, you'd be penny-wise, pound-foolish. Furthermore, Mr. Hamers, you don't know what kind of travel insurance you sell. If my iPhone is stolen or my glasses are stolen, I'm going to leave to the Philippines in two days' time, I will get EUR 600 at ABN. At ING, I would only get EUR 500. You probably don't know that, but you can correct that very quickly. I already said that it's important that I receive a proper compensation. In short, we're here with someone from the Balkenende standard. We have a CEO. I think that we should look at the market value of Mr. Hamers.
If you benchmark him, his value would be between EUR 10 million and EUR 25 million. I'm not saying that we need to pay him that much money, but if you look at his peers, that would be the normal salary level. Chairman. Thank you. I'd like to move to microphone number 3. Good afternoon. My name is Eli Boudewijn. This is the first time I'm attending an AGM. I'm a shareholder, yes. Actually, I'm in two minds here. I'm a banker's wife, so Mr. Hamers' social world is mine. I also have a job, not in the bank world, in the banking sector, so I know what goes on. Mr. Van der Veer, how should I say? What you just said was what you'd said before. We'd heard it before.
In other words, this commotion in society is something you apparently have not really understood because you read out something that was written for you. The senior management here apparently doesn't understand why society feels that way. I thought it was shocking. I wasn't intending to take the floor because I thought I'll just sit here and listen. What I would like is that Mr. Breukink. I would like Mr. Breukink to tell us how you're going to connect with society, because I haven't really heard that, not in your answers to previous questions. You said you're going to evaluate things again. Mr. Van der Veer, you're an old-fashioned man. The sustainability, I'm sorry to say this, but sustainability, converting that into money, the new generation, the technical engineers, Booking.com and the likes are no longer interested in that.
In terms of salary, they want a salary that will allow them to do some shopping and things like that. They don't want millions and millions. You won't be able to recruit them. What is your question, please? My question is I would like to offer Mr. Breukink-- One more thing. Mr. Hamers, I understand that you have a hobby. By the way, I vote for the Liberal Party, VVD, and not for the Socialist Party. Your question, please. Yes, Mr. Hamers. Being a referee on the hockey field, that doesn't give you a connection with society. My question to Mr. Breukink and Mr. Wijers, what I'm asking you is to allow me to have a cup of coffee with you, so next time you have a proposal that I show you the other side of the coin. Please listen to society. Thank you. Microphone 6.
Yes, Mr. Van der Veer. Good afternoon. I arrived in the second half of football term. I'm sure that you're familiar with that. Very often at AGMs, we talk about football and about Ajax. There were a lot of people at Ajax. At the Ajax AGM meeting, we also talked about that, about remuneration. I think that you stood your ground in parliament with all these savvy people. Mr. Van der Veer, is that a 50% increase, obviously, that was only the start, that was only the beginning. It's not a bad thing, hey, you should have talked about that. The first part of the novel was interesting, 50% increase. The second part of the novel, you didn't write that part. Of course, we can't read it.
Don't you think that in the back of the minds of the Supervisory Board members, and that tends to happen more often, nothing wrong with that their mind should be in sync with the remuneration. Don't you think that this was a way to develop an increase for themselves over the next few years? I suspect that that is what you were thinking of. A suspicion, I don't know. It may be something you might have been devising yourself. We were talking about PSV and Ajax. Remember last time we talked, it was in the same room. You said, "I can't compare PSV with FC Eindhoven." You'll be able to read it in the minutes. Now you are comparing Dutch athletes, Dutch banks with American basketball players, with Shaquille O'Neal. They're different orders of magnitude. Why do you do that?
You may say, "Yes, we have to be sustainable. We have to be innovative." I'm convinced. Isn't it strange? I'm convinced that Ralph Hamers will continue to work for us, even if he makes EUR 500,000 less. It's a question which concerns his conscience, and I would like you to pass on this question to our CEO. Take your time, I would say. Three questions. I find it very difficult to count to three. I thought as much, and that is why 50 was so exaggerated. Mr. Van der Veer, let me start with the questions raised by Mr. Vreeke. That was a mixed batch of questions. First of all, I'll give the floor to Ralph, then Henk Broekink and I answer all the questions about all the remuneration aspects. Yes.
As far as Robert Vreeke's question is concerned, sustainability is not something we do just because. We do it because we believe in it, that's why it's enshrined in everything we do, that's why we're so proud of the performance that we've achieved. Perhaps given the fact that people are not so familiar with our performance, perhaps we should communicate it better. Thank you. We'll take your advice at heart, I'm sure it's something we will continue to discuss. The other, I don't think there are any other questions. Ms. Boudewijn. I'm not a referee in field hockey. I'm sorry. I'm a linesman in football. True. I feel very much at home, and I do connect with society there. Ms. Boudewijn, I heard your wishes. We're not going to answer. Please don't pigeonhole people. I don't think that's a good thing.
Chairman, I would like to respond to what Ms. Boudewijn said, if you allow me. The reason is that I understand that this is the way you would formulate what you formulated. Why is that? As long as we continue to talk, people comment on the substance of the proposal that we made, then withdrew, as long as we do that. There will always be a temptation here at this side of the table to continue to explain, that may give you the impression that we're explaining things, that we still believe that we're right in making that proposal. I understand that you may think that's not the idea. Our intention is to reply to your questions and give you substantive information. It's very tempting for those people who ask those questions to comment on those questions.
I'm not a chairman. I shouldn't be doing this. Nonetheless, I think that we should wrap up this subject in the sense that I would like to highlight once again that we understand the emotion, the commotion, and we also understand if you hear here at this meeting that we are once again explaining our position, that you may get the impression that we never learned anything, that we're not really taking on board what emerged. I think the bottom line is this afternoon that we saw that there was a great deal of commotion. For that reason, we withdrew our proposal, and we are once again going to listen very carefully and reflect on the matter.
This is something we are still discussing with each other, so I can't answer your questions as to what we will be doing now, but we are going to reflect on the matter, and we're going to discuss it as broadly as possible. I hope that you will take my word for that.
Thank you. In all due modesty, I asked you to transfer a question from me to Mr. Hamers. Two people have had the floor, but the people who want to know the answer did not hear from this person. Perhaps you could ask Mr. Hamers again to answer the question.
The supervisory board is responsible for remuneration. I'm not going to hand this question over to Mr. Hamers.
I have a second question directly to you. I understand that you have an excellent defense line, and I certainly respect that. That's very well formulated. I have to put the question to you. Do you think that money is a driver to do your work well? I'm sure it's already mentioned. Is money the true driver, or is skill, expertise, drive, passion for the occupation, a reason to do your work? That's my question to you.
Well, perhaps this was before you entered the room. I explained that there are several reasons for a remuneration policy, and it's not only whether the CEO is paid according to market practice. There are other aspects as well. If you think about it, ING does not consider exclusively the financial aspect. There are many different factors. The supervisory board considers all those different aspects that come into play. The Remuneration Committee chairman has already explained the composition of the remuneration policy, and I think there's little purpose to exploring your question in greater depth here.
Why don't you think it serves any purpose?
We've indicated that we consider a great many different aspects, including non-financial ones. We made a proposal, just as Mr. Broeking explained, even that proposal was not even submitted for your approval. It never got there because after five days, we withdrew the proposal, and we explained that then, and we explained it this afternoon again.
I'm asking you a moral, philosophical question, not about numbers, not about remunerations. I'm asking you a moral, philosophical, social question. You have not answered it thus far. You will?
No, I said other aspects come into play in addition to financial ones. The answer is yes. That's at the discretion of the Supervisory Board.
Well, Mr. Van der Veer, you're in charge.
I'm just an assistant. You can ask your question. I can't deliver a lecture on it.
I'm not getting an answer to a particularly legitimate philosophical question.
Well, perhaps.
Well, perhaps the Chairman of the Remuneration Committee could help me out here, Henk.
I don't think the Chairman of the meeting needs any help, except that this debate is extremely challenging because there's no start and there's no end to it. Getting an answer to that philosophical question probably won't truly move the process forward as we envisage it.
Well, perhaps if you like to continue philosophizing about it after the meeting.
That sounds like an offer I can't refuse. I don't think that it will be conducive to clarifying where we stand now and how we expect to proceed.
Well, it won't help you and the Supervisory Board. I can tell it's an uphill battle. Okay, but I'll accept that. I won't belabor the point. You have provided, in my view, deeply inadequate empirical explanation, and I'll have to make do with it. Well, I'm happy that you judge me as somewhat inadequate and barely passing. On to microphone five. I think that somebody has figured out that if nobody is standing at microphone five and if all three people are standing at microphone two, you can switch to a different microphone. Your turn. I'm André Jorna. I'm speaking on behalf of the Association of Stockholders. Yes, Mr. Chairman. This deviates from standard practice. It's about making a beeline for the microphone. I hope that we won't run out of time with all these people eager to ask questions.
I'm always amazed that people who walk in late are given the floor. If they're not registered but they do arrive on time, they never get the floor. That's my first remark. My second remark is that I'm delighted that I'd like to step in about that soon, but not yet. I'm happy that not all political parties are purchasing shares, so we'd have the entire House of Representatives here, and then everybody could express their political position, and that would simply not be right for a shareholders meeting. Second, people should not make lengthy statements but ask a question, and I'll try not to fall into that trap as well. If I look at the word digitization, it appears on almost every page, and that's what my question today is about. Do you expect that digitization will give you a sustainable competitive edge?
You're now at the vanguard, but even at the ABN, I can get an online mortgage. I can do everything online there. Aren't you worried that the big league players such as Alibaba, don't you think that they'll use their standardized platform to emulate your products and drive you off the market? Then you'll switch from being at the vanguard to being a victim and can worry about a takeover attempt. How do you feel about that? At the Randstad AGM and others, we notice that they value clicks and bricks. Rabo is going to introduce a new type of mortgage, and Randstad thinks that the job placement counselors still serve a purpose because when you take out your first mortgage, you want somebody to guide you, and often that won't work online. There are some products where you need a consultant.
In Belgium, you have 14 welcome offices. I don't think that's enough to meet the needs among people, especially the elderly. How do you feel about that? As for digitization, as we saw at the Deutsche Bank, EUR 24 billion, that entire balance sheet total can disappear by tapping one key. How do you protect yourself against these errors? I'd like to refer to the investigation by the Public Prosecution Service and the Economic Crimes Department, as well as organs in the U.S. that reveal that the internal checks and balances are not foolproof, and you're subject to very rigid requirements. Now that we've got the Socialist Party in here anyway, you mentioned the level playing field. That's getting in your way, the regulatory costs and the banking tax. You keep footing the bill. That's how you see it, and maybe you're right.
Perhaps the Socialist Party would do a good job lobbying for you in politics because they might be able to handle the Dijsselbloem surroundings just as that happened with the dividend tax. Don't let that withhold you. The Socialist Party is there for you. As for having mortgages in Basel IV, that's another thorn in your eye. You see that often mortgages are shelved or sold by many companies. Have you thought about that? You could combine your old mortgages and cash that out on the stock exchange. Then the very unfortunate fact of the Public Prosecution Service and the Economic Crimes Department. In your annual report, you mentioned that will seriously impact results for 2018. Considerable is always a matter of opinion. I'll say more about that when we hear from the auditor.
Do you agree because the Economic Prosecution Service said that if there is a settlement, the requirement will be that you need to visualize all future integrity aspects for the government and the Public Prosecution Service and who else. They also want to consider retrospectively everything that happened. Four cases are pending that exemplify certain types of transactions. They're not even taking new complaints. There's Article 12, and some people are already addressing the European Court of Justice because the Public Prosecution Service in the Netherlands won't take it anymore. Bond holders in the U.S. are approaching the Securities and Exchange Commission and complaining that you didn't report this in your prospectus. There's trouble everywhere you look.
My question is, do you feel that you're in control, and aren't you worried that if you look back or if you look ahead, you may wind up with a trustee supervising you. There's far more because after the first complaint, you issued a signal. The Russian authority, the Spanish authorities, everybody is scrutinizing the ING, and as you once had, they have a considerable impact, too. Those are my questions. The last remuneration is a positive message. The VEB agrees with the substance of what Jeroen van der Veer says. You have to pay a fair wage, and you have to offer a wage that attracts good people and retains good people. We regret that the social antenna of Mr. van der Veer et al. was pointed in the wrong direction, but perhaps after ASR, they're giving it a try to see how people respond.
Well, at ASR, it was apparently okay to give a 40% raise without anybody beeping or objecting. You mentioned this, but given the EURO STOXX 50, you wind up in the Premier League, and that might be too ambitious, and you might be aiming too high. As for remuneration, we agree with the substance but not with how it went down. We are running late. It's already 4:00 P.M., please be short and snappy. On to microphone four. Thank you, Mr. Chairman. I'm Jos van Alphen. I'm a private shareholder. I think it was an excellent move to wait until 6:00 P.M. to issue the gifts, and it will certainly keep things smooth. First, I'd like to thank the employees and former employees who worked so hard to achieve this result, and I hope you'll continue doing well.
In addition, I wonder whether all the turmoil that you encountered in response to the proposal for the remuneration of Mr. Hamers and the subsequent creativity with the videos, cartoons, and columns make me very grateful that you managed to shake up that creativity. It also reminded me, and this memory certainly puts a smile on my face, the ING staff that distributed all kinds of boxes when Mr. Kist, whose name means box in Dutch, left. These were little boxes to collect a pension symbolically. I was also wondering, Mr. Jorna touched on this by saying, is this a diversion tactic? What's going on with that remuneration that you mentioned now? If I think back carefully and I verified this, in 2007, I asked a question about the operations and links with the Barings Bank that had been inquired in connection with Russia. The Barings Bank.
I'll wrap up on this note. I hope that you'll be in a position to answer the question about this man. I have a next question about the dividend tax that's being abolished. To what extent was this influenced by the fact that the majority of companies listed on the Dutch Stock Exchange is foreign-owned? I believe that 75% of the ING is under foreign ownership. Next, I'd like to look to the future with Mr. Hamers based on the very recent past, where you, Mr. Chairman, used the word context. That's a concept that's often associated with the changes that have been introduced in the past 25 or 30 years. What strikes me from a different occupational field is that increasingly, matters associated with those contextual factors are abandoned, and other factors that determine the policy are emphasized.
I believe that the remark that the methods as a bank need to consider that when you're banking for the large companies. Can you tell me whether the dividend tax process supported your decision? Perhaps that will surface after you talk about the act of public administration and public administrative disclosure. There's also a different point of departure for putting the bill that SMEs have to pay, and they're subject to a 10% premium. Everything becomes more expensive, inflation rises, and the employed Dutch people and those who work may be all right, but the elderly who have to manage on their social security compensation are in more trouble. Could you please wrap up, madam? Those were my questions. Microphone one Good afternoon. I'm Jacqueline Duiker.
I work for the VBDO, the Association of Investors for Sustainable Development, and we aim to make the capital markets more sustainable. We're talking about both the companies and the investors. Sustainability has been mentioned a few times this afternoon, and we think that's a very good thing. We also see that the ING greatly values sustainability. I have three questions for you about this topic. Its importance exemplified by your endeavors to completely eliminate funding coal centers by 2020. You also mentioned in your annual report that you want to increase your sustainable investments. Mr. Hamers, in your presentation, you mentioned that they presently equal EUR 14.7 billion and EUR 4.8 billion as far as these investments are concerned. My first question concerns the percentage of sustainable investments. That would be 3.75%. If you look at the funding, the percentage is 9% of the total portfolio.
My question is, what is your target for 2018? And what's your target for sustainable investments and sustainable funding? My second question is about sustainable remuneration. Thus far, we were mainly talking about the top remuneration, but my question concerns decent wage. The decent wage for people who don't know is the minimum wage for providing for your basic needs. Much of society earns less than a living wage, and the ESR framework of the ING refers to living wage as an actual risk, especially in the textile industry, IT industry. The lack of a living wage there is a serious risk.
My question is how the ING takes that living risk, the absence of a living wage, and considers it in financing and investments to certain companies, and which consequences do you ensure if companies cannot guarantee that their own organization pays a living wage or that their suppliers pay a living wage? My final question is for you, Mr. Van der Veer. This is your last year as a supervisory board member at the ING, and you're known to value sustainability. My question for you is, what are you proudest of in terms of the ING sustainability achievements in your period on the supervisory board, and what do you believe is the next step or the next standard that the ING should pursue? Thank you very much. I propose that we answer the questions about the payments of senior executives.
I think we've said everything there is to be said about that following the summary by Mr. Breukink. We're not going to repeat ourselves on that part. Second, people who are still standing at the microphone and have not asked questions yet will get a turn, but I'm not going to accept any additional new questions because we're running too late. The questions from Mr. Jorna concerning the Public Prosecution Service investigation will be answered by Steven van Rijswijk, and then Ralph and I will divide the answers to your next questions, possibly with somebody else assisting us. Steven? As for the investigations by the Public Prosecution Service, as Ralph previously mentioned, we're not going to make any statements other than what we already said. We didn't say it has a significant impact, but we did indicate that it could have a significant impact.
On that note, we take customer surveys both at the start and during the relations extremely seriously. We hear about this regularly, both among the Supervisory Board and the Executive Board, and we have a global program to obtain more information and address the nature of the information and conducting inventory. Making transactions so that we improve our awareness of and operations and response to money laundering operations. I have a group of questions, first from Mr. Jorna, as to whether diversification will lead to a sustainable, distinctive asset of ING with respect to other operators. Of course, it will. It would be strange if I didn't say it would. There's a reason why I'm answering that it will.
That's because in the past 20 years, considering the rise of first online and then online banking, we're one of the few, if not the only financial operators that has applied technology to our present model. Instead of doing that, we adapted our business model to the technology. We did that at ING in all different countries. That's why we're growing so fast, and we do the same in mobile banking. Admittedly, there are moments with customers and companies where complete digital services do not meet all needs. Of course, there are times when individuals or companies need advice. In some countries, we offer that, in others, we don't. We did that via other channels, such as a call center or remote advice or bank offices. I certainly think that in most countries, our offices will continue to serve a useful purpose.
There are still quite a few countries where we don't have offices and are nonetheless able to grow properly as a universal bank. Next question. From Mr. Jos van Alphen about dividend taxes. 95% of our shareholders are not Dutch, 96% to be more specific, and most can deduct the dividend tax. Your question about Payvision. That's an independent company that adds wonderful value. If entrepreneurs don't appreciate those services or think it's too expensive, they simply won't purchase those services. It's a free market. I'd like to point out that I'm not hearing your answer about the impact on people's disposable wage, because the prices of the services are all very expensive because the bank adding an additional service that also comes at a cost. If people don't want additional service, they don't get it.
We have the very low threshold starter kit to do banking here. It doesn't cost that much. I'm talking about the payment procedure that you offer to parties selling the products that people purchase. Because you also make money as an intermediary on those products, the price of those products will rise with respect to the past. Our fees are extremely competitive, otherwise our Net Promoter Score would not be that high. I don't agree with you. I don't agree that customers might not think our services are good enough for the price we charge. On to the question of Mr. Duiker from the VBDO. There are a few elements there. As for our ambition in sustainable finance, that 14.7 portfolio, we'd like to double it in the near future. Our total income statement will not double in the next four years.
This means that the percentage of that type of financing as a total of all our financing will certainly increase. It will account for a larger share, but we have no specific target. As for a minimum percentage return on that, I don't think it would be a good idea. In lending, you cannot set targets because production is necessary, because banks have toppled in the past over that. We're not going to do that in terms of sustainable financing because there's a default risk there, too. Your question about living wage. That's a very good question, and it's on our mind. We are committed to that in part, if we're talking about the chain responsibility that we hold our customers to. In an average conversation, we certainly touch on that, and we also report about human rights.
We're required to do so, in the third quarter, we reported about that for most of our assets. Part of this, there's a living wage component there. Do you discuss that with your customers? In some cases, we do. In some cases, we don't. With some customers, we discuss it explicitly. With others, we don't. We can't touch on it with all of our 37.5 million customers, and we don't cover that with all of them. With the larger customers, yes, we certainly hold them to that. We've been doing that for 20 years, quite frankly. There's nothing new under the sun there. As long as I've been a relations manager at ING and have worked in the Dutch office network, we have been holding customers accountable just as we hold ourselves accountable. We certainly discuss this with our customers in the chain.
I'm not saying that everybody's flawless, these are excellent talks that merely enhance awareness, and that's very important. Yes, absolutely. You have next the question about Basel IV and mortgages. I had another question. I'm not done yet. As for your kind question about sustainability, let me try to give that a philosophical answer because I didn't do that well last time. I was raised at Shell, that's yellow and red, you're asking how that takes me to green. It's as follows. If you mix yellow with red, you get to orange. That's where I am now. How do I get to the green stage? That was your real question. If you think about sustainability, it's basically the same as safety. Let's say in chemicals.
If you have that mindset, as a company, you'll perform better and you also feel better because you're more in tune with social desires. It's about being sustainable. That helps you build a successful company, and it's logical to do as well. That said, society is not always aware of how difficult it really is to be sustainable. Think about reducing carbon dioxide. It can take a long time. It's not a few years, it takes decades. They think that everything can happen overnight. That's not always the case. Sometimes society thinks that large companies are like a government.
It's not that we don't want to do our bit, to get a more sustainable society, you often need to streamline the interaction between companies as well as with governments that set regulations and taxes and grants, as well as academia that drives progress because our present ideas may have consequences that we learn about only further down the road. That said, I think this is an excellent principle for a company, and I'm delighted to see that the ING has, in my view, been on that track for many years and is communicating increasingly about that. Mr. Chairman. Some of my questions have not been answered. I know they're tough questions, and I know you'd rather talk about sustainability or other things. With respect to mortgages, I asked whether you keep that at arm's length outside your company. You did not answer that.
Afterwards about digitization, I asked how do you hold your own against the Apple and the Alibaba? How do you make sure that they don't bypass you? I think that it's very easy out with the Special Prosecution Service reflected here is addressing a sorely inadequate policy in terms of both transactions and customers that were not acknowledged. I'm talking about customers you shouldn't be doing business with. If you yourself say that it could have a considerable impact on business in 2018, well, you can sound the alarm, but you have to answer far more quickly. If it's said to have a substantial impact and you dismiss it with this answer by Mr. Rijswijk, well, that's simply not acceptable. Okay. Many people have been waiting at the microphone for some time.
You'll get an additional answer to your question, including Mr. Van Rijswijk, and then I'll move on to the last round of questions.
I thought I gave an answer in explaining how we deal with competition with Apple and such. We don't use technology to apply it to our current business model, but we always adjust our business model to the opportunities in technology. It's always been very successful, and that's what we intend to continue to do, and that's how we continue to compete with the large platforms. Large platforms already have one single global system. You don't have it yet, and you believe that's going to take another four to five years. In those four to five years, they can copy your products and they'll blow you away. I don't think they even have to copy our products because they will simply be selling the products of a bank through their systems. They don't even have to copy it.
A platform is an exchange of buyers and sellers, and everybody can play the game. Other banks can also play on that platform, and we can play on that platform, and they will certainly try to disintermediate the banks, as we say. That's a given, and we will make sure that we adjust our own platforms as quickly as possible. Question: Would you be prepared to form a partnership or would you continue to operate alone? Well, forming a partnership, that goes a bit too far. You don't have to do that either. This world is an open world. All these platforms, if they have a certain size, well, then you have platforms that open up to third parties. You don't really have to engage in a partnership. By connecting to platforms, you can reach your customers or you can create your own platform. We do both things.
We also connect in platforms that others have set up. We're also looking out for possibilities of setting up platforms that other connect to. That's what I pointed out in my presentation. In the wholesale market, we do that with InsideBusiness, opening it up to other banks, offering our customers the possibility to have an overview of all their bank business in one app. We have the same possibility in Germany. Our customers, ING customers in Germany, can also check the balances they have with other banks, and they can do that in our app. We have that in U.K. with Yolt as well. That is completely bank neutral. We're not a bank there, but we are providing a full-fledged service to our customers across all banks. That's something for the future. We're not a product provider there. It's my turn. About mortgages.
Yes, with Basel IV, the requirements for capital in terms of mortgages will become stricter. Does that mean that capital mortgages will no longer end up on the balance sheet? No, because we have a mortgage market in the Netherlands of about EUR 650 billion, and that won't all fit in a pension fund or in an insurance company. Banks in the future will certainly still have a role in terms of mortgages for two reasons, supply and demand, that's one, and also because we feel that mortgages are a wonderful product, but more of your capital has to be provided as a hedge, therefore, the prices of mortgages will increase most probably over time. You're not thinking of bridging your balance sheet? No. Checking up on customers and money laundering. Let there be no misunderstanding.
Money laundering and secure business within ING is extremely important to us. We take it very seriously. It means that the programs that we have, checking up, and investigating customers is absolutely important. It is right at the top of our list. It is the beginning of any trusting relationship between customers and ING. Mr. Jorna, I understand that, isn't it good because your internal controls have failed? You can write lengthy novels, if it turns out that Russia, Spain, and the U.S., all corners of the world, you see that they are committing fraud in terms of what you write in your manuals, there is a financial tax investigation service and the Public Prosecution Service is focused on fraud issues, trust offices and so on, they are not even receiving any further complaints.
There is also an issue with bond holders in the U.S., that can lead to hundreds of millions in EUR costs. You yourself have said that costs can be quite substantial. I would like to know what can we expect? You shouldn't refer to all these textbooks or these manuals, your execution has been faulty. As I pointed out earlier on, we pointed that out in our press releases, also in the annual report. We cannot comment on any pending cases. This concerns money laundering. In the first half of this year, we expect to have more information. Should we get more information, we can inform you accordingly. Yes, that is simply not enough. If it turns out the materiality that the auditor uses is EUR 300 million.
If it turns out that the settlement exceeds that amount, that is what is expected, you have even expressed that expectation, you have not commented on it, you do not want to give us any idea in terms of the amount that we are talking about, how on earth can we adopt financial statements then? You understand that we cannot comment on a pending investigation. That is not in your interest, not in our interest. If you look at the annual report, once again, it says explicitly that the implications of this investigation can be significant. You will understand that the wording has been chosen very carefully. If we point out that it can be significant, then I would say that is a reflection of the materiality of the case. Provisions.
According to IFRS, there are a number of rules of the game that need to be observed in order to make a provision. One of the rules of the game is that you have to be able to estimate an amount. It has to be estimatable, which is not the case. It is impossible for us to make an estimate. According to the rules of IFRS, you have to highlight in your annual report that this is an issue at play. We have observed those rules in doing so, I understand that you would like to have further details and further information. I hope you also understand that given the pending investigation, we cannot comment on it. Yes, I understand it, you yourself have used the word significant, under 45, there is a whole list of issues, you use the word significant.
Unfortunately, we don't have the scale of Richter in order to indicate the force of an earthquake, but this is not peanuts. Well, if you'd use the word significant, if there's an earthquake, well, that would probably mean a terrible earthquake. I think we do agree with each other. If we, says Mr. Jorna, if we want to adopt the financial statements, SBM hasn't wrapped up the issue in Brazil, but they are including things in the balance sheet. Mr. Jorna, this is a very technical debate. There's nothing technical about it. Please don't interrupt me, says the chairman. This is a discussion that involves many IFRS guidelines. If you don't agree with that, we have to have a separate discussion. In the interest of the meeting, I would like to proceed. Thank you. Microphone number two. Thank you, Mr. Chairman.
My name is Steven, the Foundation for Legal Protection of Investors. Well, we wonder whether Ms. Marijnissen is also interested in financial issues, because she is thinking out loud and philosophizing about remuneration, but I didn't hear her ask any financial question. However, we have analyzed the annual report, and we always came back to one thing. The one thing being costs. ING is growing slowly in all sectors, and so the repayment capacity and self-funding degree is very weak. Global efficiency and book value is also weak, and you're quite vulnerable to economic developments. What is your policy to counter these weaknesses? The ratio of underlying costs and income has increased from 54.2% to 55.5%. You want to decrease this to 50% or 52% in 2020. In the second and third quarter last year, it was already below 52%.
We are wondering what your policy is in this matter, and whether you can really reduce it as far as possible. Staff costs have increased. That's another issue. Lower other income in the department financial markets. Costs increased here and interest revenue. What we're wondering, looking at this, where will the growth in profit come from? Could you please try to wrap up, Mr. Steven? Well, yes, I would like to say something about remuneration as well. As long as it's new. I think so. I'm representing a group of people that have been involved with the company for some time already, and they say that it's not about the performance of one single person, but it's about the performance of the entire workforce. There are also lots of companies that pay out salaries, but CEOs never performed. Benchmarks lead to higher salaries.
We've never heard of a decrease in the CEO's salary because he came out in the higher margins of the benchmark. Could you please wrap up, Mr. Steven? As investors, we're only interested, really only trust companies that have a long-term goal, an investment policy that is a recruitment policy that is focused on recruiting talent. Excessive remuneration will lead to egos that have led companies such as Fortis, Enron, ABN AMRO, and other companies to terrible situations. I'd like to hear your comment on that. Thank you. Microphone number three. I'm just going to make a list of all the questions, and then we can close this round of questions. Thank you for allowing me to take the floor. My name is Job ter Horst. I used to work as an HR manager, and so I also dealt with remuneration.
A lot has been said about remuneration policy today. Of course, people may have different opinions on it. It strikes me, and Mr. Breukink has highlighted this, the EURO STOXX 50, that you don't pay remuneration that exceeds the median. That's unique. As such, I used to work for Heineken. I can tell you that they do pay over and above the median. This debate is not taking place there. Why is the debate taking place here? I think that the gentleman should realize this full well. There still is a public opinion, the public opinion is that ING was and still is a systemic bank, and that the bailout still is an issue for people. You can come up with all sorts of arguments, but it's useless, I think it's sensible to look at this whole issue from a different angle.
I'd like to make a proposal also from my experience. Why don't you base your remuneration on the long-term more? We can offer Mr. Hamers a contract. He has a contract for an indefinite period of time. Why don't we offer him a contract in which we say, "Okay, for the next 5 years, if you perform well, we will set up a system in which there will be a salary increase, an incentive increase, and we will also look at the pension." Ever since I stopped working, I know how important pensions can be. I can tell you that. Those things are perhaps things that perhaps have not been sufficiently considered, that could also calm down the public opinion.
Instead of coming up with a proposal like this one, increasing salary in one go with 50%, to say, "No, we're going to adjust the remuneration in the long term." Mr. Hamers probably enjoys his work, he'll probably say, "Well, I'll continue to work with ING for the next 5 years," then he can grow, his remuneration can grow over those years. That's my proposal. That can quieten people down and stop defending it with Euro Stoxx or the median because you will always lose out in that discussion. Thank you. Let me proceed to microphone six, then we will return to Mr. Van der Bos for the last word. Thank you. My name is Van Diepen. It's taken a while. I'm a retail shareholder from the south of Amsterdam. I have Two brief comments or questions to Mr. Hamers, rather.
As I said, I'm a retail investor. What I'm interested in is earnings per share, dividend, and the future of the company, shareholders' value. It's all very well, but that's the bottom line. That's my first comment. I would have voted in favor of the additional remuneration package of Mr. Hamers. I would like to voice my view. I'm interested in earnings per share, dividend, and the future of ING Bank. The second observation, something that is really upsetting me, people keep coming back on the state bailout. I was present with Mr. Hommen in the RAI. I was a private shareholder and a retail shareholder then. Of course, the state bailed ING out, but the retail shareholders and others purchased shares and never regretted it. We purchased shares, the taxpayers purchased shares, investors purchased shares. You never say that.
You're easily overtaken by leftist politicians and leftist newspapers. Now I have a question to Mr. Hamers. I'd like to congratulate you on your presentation. I thought it was fantastic, but I didn't really understand very much of it. I'm from a generation, perhaps I should say, 40 years ago, when I was a student, I worked for a market research agency that worked with typists at the time. If I look around here in this auditorium, I'm thinking I'm not the only one that doesn't work with the internet. I'm very old-fashioned. If you have a company, you concentrate on new developments, cost-cutting, blockchain, and so on and so forth. I am also a customer of ING. I have my deposits with ING, and there's a group of customers, and you've said very little about this group of customers.
My question is, please don't lose sight of those customers. I think it's fantastic, your story about digitization, et cetera, but I really didn't understand very much of it. Mr. Van der Bos, please be concise. My name is Van der Bos. I'm also a retail investor from West Friesland, a very sunny place. Couple of issues. In the introduction of Mr. Hamers, you talked about the love brand. This nice story. I agree with the previous speaker. I didn't really understand very much of it. All gibberish to me. Interesting thing was the service element of ING. What I mean to say is the issues that come up, their vulnerability, technical downtime. It seems that ING is lagging behind. There are more problems with ING than other banks.
It was said that ING is in control, but I think that if you don't have any major defects in your banking system and if you don't have any technical defects, that you might be in control. The presidium of the Socialist Party is present here in the room. I can see that. I would like to hear from ING, what are you doing about mortgages that don't have to be paid off, that don't have to be redeemed or amortized? I would like to hear about that in general and in detail. De Nederlandsche Bank is losing sleep. Mr. Knot is losing sleep. The Minister of Finance is very upset. We have the presidium or the board of the Socialist Party, perhaps they can comment on that.
I just said to the lady of the Socialist Party that they should discuss a remuneration policy in Parliament and talk to the minister because the same thing happened with Mr. Hommen. I have something else to say, and that is in the presentation of Mr. Hamers, he referred to the increase in consumer lending. I think it's only lending to the textile industry. My question is: how is ING growing in terms of lending? I'm talking about tailor-made lending. The VEB, there were people waiting here for a long time, and this gentleman of the VEB starts talking about a number of things and then says that he cannot adopt the financial statements. You can only be convicted after the judge has spoken. A possible conversation will relate to 2018.
Of course, you cannot make any provisions for matters you know nothing about because you don't know what the outcome will be, because has ING been found guilty? There are a number of cases ongoing. French banks, particularly the Crédit Agricole, have proposed a number of settlements or have been proposed settlements by the American regulator, but not EUR 0.01 has been paid out. It's being delayed and delayed. It could take decades before the money has to be paid. I think that the response of the VEB is improper. Thank you. Okay. No more questions are possible. What we're going to do is answer the questions that have already been raised. Let me hand over to Ralph. Yes. As quickly and as concisely as possible, I shall answer the question. Mr. Teves first. Yes, our cost-to-income ratio that you referred to has increased slightly.
They're not perfectly spread across all quarters, and those costs are concentrated in the first and the fourth quarter, which is why across the year, there are quite a few ups and downs in terms of cost-income ratio. As far as growth is concerned, I think that we've shown clearly that we grow. Grow in numbers of customers and in lending, more than 4% a year in specific lending. Once again, it's not a target for us, but it's something that we feel should be possible. We are growing much better across the world and in a more spread out way than other banks. In comparison with other banks, I think we are doing really well. No need to lose sleep on that one.
That has to do with the fact that we're growing in workforce, in the investments that we're making in IT. The transformation program that we announced a year and a half ago requires substantial investments. The first years of the program, the costs will remain more or less at the same level because we're cutting costs as well. The cost-to-income ratio will change. We also highlighted that the cost-income ratio in the second and third quarter is lower than for the full year. That has particularly got to do with in the first and the fourth quarter, we pay our regulatory cost, EUR 900 million a year.
Also in terms of profit growth or an improvement of profit concerning quality and the development of profit, there's also always pressure on account of lower margins related to the negative interest rate environment that we operate in. That is partially offset by the return on new loans that we enter into. Your comment on the financial market operations, you have a point there, I think. If we look at the market developments or developments in financial markets as such, and we're talking about financial year 2017, you know that it was quite an uneventful year. Customers want to secure their risks in terms of currencies and interest rates. If there's volatility, there's no volatility. If there's no volatility, customers don't really feel the need to hedge those risks.
If they don't want to hedge those risks, we don't do as much business with the financial markets. That's one effect. The second effect is, there are regulatory measures that impact on financial markets. We have divested certain operations. 2017, we announced and have almost now entirely implemented the divestment of our equity derivatives to different banks. The bank is experiencing a transformation on the one hand. On the other hand, in 2017, there was very little volatility in the market. There was little need to hedge, as we say, of our customers. If customers don't do business, we won't do the business either. Training staff, that is a top priority for us. As I pointed out earlier on, every staff member has to make his own plan for his own career. For us, that is absolutely crucial.
We have a development training budget that has to be allocated to those training projects that will really help the employee within or outside the ING in his or her career. Let me then proceed with the question of Mr. Diepen. That we shouldn't lose sight of our old-fashioned customers that don't use internet. We have 260, 270 branch offices where we can always serve our customers. We also help our customers to understand internet banking, and our customers can also get written bank statements, printed bank statements. It's not that we're losing sight of them. We still have services for them in place and branch offices in place. The services are there and available to all customers. The questions from Mr. Van der Bos about downtime. Yes, that's an interesting phenomenon. Has to do with two things.
Of course, we have to do everything in our power to make sure that our systems are fully available 24/7. We measure our availability. Availability is 99.5%, which is a very high percentage. Apparently, when there is downtime, people remember that. That's got to do with two things. First of all, we are simply a very large bank. We have eight million customers in the Netherlands, and that means that if there is a downtime, that will lead to quite a bit of upset. Of course, we don't want that. We want to be available, and 99.5% availability is a percentage that we will have to continue to increase in order to reduce our vulnerability in that respect. Question about mortgages that don't require amortization. Well, that's a very important thing. There are two things really, or there are several measures that we're taking in this respect.
First of all, restricting the possibility to enter into new mortgages that don't require amortization. Well, we've already done that. That way, there's no input anymore, new customers with those mortgages. Second, we've identified which customers, in due course, may have issues, may have problems with the fact that they have such a mortgage. We approach those customers that have such a mortgage and that might end up having a problem. We approach those customers because it's a problem we have to solve in advising our customers. The growth in tailor-made services. Well, this phenomenon, tailor-made, well, it encompasses so much more. In the eye of the beholder, I don't know how to say it in Dutch. I'll use the English term. We try to serve as many customers as possible as they feel fit.
Tailor-made services has got to do with the way we approach our customers, the way we advise them, and the products that we offer them. To be quite honest, in terms of the product, I don't think that we should look at tailor-made products. They're not in the consumer market because by and large, that would lead to problems. Either the products would be too difficult to understand, or you'd have issues at a later stage in which people would point out that, in hindsight, they didn't really understand what kind of product they were getting. Can I respond to that very briefly, Mr. Van der Bos?
Ms. Louwers.
Yes. As always, very brief. There's a considerable interest margin in the interpretation of the interest-only mortgages. Looking at the executive of the Socialist Party, I understand that there were other issues. I think your explanation about the sensitivity to malfunctions. You said that 99.5% availability makes them the bank with the fewest outages in the Netherlands. If you say that you're in control in other things, I think that bank that's unlikely to go offline, then you are in control in a great many areas, in my view. That's what I meant by that. Thank you for clarifying. Mr. Chairman. Wait a minute. I have two additional remarks. You said something about remuneration. We're not going to start that one again. The last person asking a question also said something about remuneration. I'll be very brief. We're talking about the long term.
As Mr. Breukink explained, our proposal already addressed the long term. These were shares that you needed to retain for five years, that had nothing to do with a short-term bonus. I understand that you want us to do more and possibly take stages, that's input for an evaluation. Mr. Steijns, please keep it short and snappy. Mr. Steijns, as for your costs analysis, we heard nothing about the free cash flow, our comment concerned the free cash flow and solvency. Please elaborate on your answer. Koos will touch on it briefly, we can tell you more after the meeting. If you consider the bank solvency, that's basically up. Nonetheless, I would even say despite the fact that we're growing considerably, because what you said in the beginning, that this bank is not growing. Basically, our bank does grow, but the bank solvency is up nonetheless.
If you look at cash flows, what you basically see is that in general, if you look at financing of our bank, monies toward refinancing, you see that the bank's cash position, of cash and cash equivalents, has strengthened over the years. I do not share your concern on either topic. We'll ask the auditor later on. Yes. By all means. Ladies and gentlemen, we already have a 50% delay. We're running late by 50%. I really need to move on, or I'll get some feedback about that. On to 2E. Those are the annual accounts for 2017. Please see the report. The accounts were compiled on 5 March of this year and were made available for inspection. As of the instruction from the AGM in 2015, it was examined. There's a statement of no objection from the auditor, so on and so forth.
I propose that Marc Hogeboom and Guy Bainbridge, our external auditors that I introduced at the start, will take the floor. Mr. Hoogeboom will start with a brief introduction. Thank you, Mr. Chairman. I'm pleased to take this opportunity to elaborate on our duties in auditing the annual accounts. I'm Marc Hoogeboom, and on behalf of KPMG, I've been the external auditors of the ING Group and the ING Banks since 2016. The 2017 financial year is my second year as the external auditor of the ING Group and the ING Bank. At this shareholders meeting, the ING has given us an exemption from our non-disclosure obligations so I can elaborate on our audit and our audit duties. In a snapshot, we try to depict the highlights of our audit.
You can see, there's the ING Group and the annual reports of the ING Bank. Last but not least, 20-F. I'm pleased to elaborate on that. I'd like to elaborate on our audit duties as well as the statements that we issued as a result. In keeping with our instruction, we audited the corporate and consolidated financial statements of the ING Bank and the ING Group, have issued a statement of no objection as a result. Since the ING Group is also listed on the stock exchange in the U.S., ING Group needs to meet the Sarbanes-Oxley legislation. We issued a statement about the effectiveness of internal audit measures concerning financial reporting by ING Group.
This statement is also a statement of no objection. We issued a statement of no objection to the annual accounts known as a Form 20-F, as submitted to the SEC, the U.S. regulator for 2017. We also examined the half-year figures of the ING Bank and the ING Group. At the time issued a statement of no objection on those, too. We also examined the sustainability information included by the ING as included in the ING's annual report. Finally, the statements by the ING in the annual report, including those relating to corporate governance, have led us based on our reading, knowledge and understanding from that audit, to state that we did not see any material inaccuracies or conflicts with the audited annual accounts, and these contain the information required by law as indicated in our audit statement.
I will review the highlights of our audit statement, which is now long form, as they call it, and covers eight or 10 pages. I'll explain it to you briefly, and that also concerns the sheet summarizing the highlights. First, based on our duties, we've concluded that the annual accounts reflect an accurate impression of the financial state at the end of 2017 and of the results in cash flow over the course of 2017. Based on IFRS, the annual accounts have been drafted on the assumption of continuous business operations. Based on our duties, we concluded that this assessment by management is appropriate. As for independence and the audit by the auditors. We are globally independent of the ING Group and all its subsidiaries since 1 October 2015. 2017 was our second year auditing the annual accounts of the ING Group.
At least twice a year, we report on our independence to the audit committee and to the ING Supervisory Board. As for the materiality, as stated there. We have applied a materiality in auditing the corporate financial statements of ING Group. That materiality amount to EUR 300 million. In examining the calculation of remuneration, we apply a substantially lower materiality because accuracy requires that. In this case, in practice, this explanation is inspected in its entirety and in detail. Any difference that we observe above EUR 15 million is submitted in writing to the audit committee and the supervisory board. The scope of our duties. In addition to being the external auditor of the ING in the Netherlands, we're the external auditor in nearly all countries where the ING operates all over the world.
We determine for the group where and in what measure of depth the audit is necessary. We assess the results of the audit, discuss it with the teams on site, as well as with the teams in the Netherlands and the ING. We send teams to visit these countries once a year and assess the records of those local auditors. The significant risks and the key audit matters. A significant risk is an unknown risk of material importance that we believe needs to be considered, especially during the audit. These key audit matters often concern non-routine transactions or matters that need to be considered carefully to form an opinion. As per the significant risks, we examined the internal control of the ING concerning these internal risks, and we performed data-oriented duties to ensure that there's risk that will not yield a discrepancy of material importance in the financial statements.
For 2017, the significant risks are as follows. The first is the impairment losses on loans and advances. Second, provision of a legal matter. Third, the assessment of level 3 financial instruments, which by their very nature are more complex than level 1 and level 2 financial instruments. Last but not least, management override of controls. Of these four, we included the first two as key audit matters in our auditor statement and subsequently included the following key audit matters. Access management to IT systems and implementation of IFRS 9 reporting standard, which assumes an expected credit loss compared with IAS 39 in current loss models. I'd like to touch on two of the above-mentioned topics, the impairment losses on loans and advances, and use access to IT systems. Because of the uncertainty of estimates, we regard evaluating loans as core to our audit.
Based on the duties that we've performed, we have concluded that the estimates performed are reasonable and agree with the corresponding explanations in the annual accounts. For the ING Groep, the IT infrastructure is crucial to ensure reliable and continuous operations and the financial reports. In 2017, the ING Groep made efforts to improve its IT systems and processes, aiming to ensure continuity and reliability of automated data processing. The management was especially interested in the access rights to various IT applications and systems that are of direct relevance for its financial reporting. These access rights safeguard the access to and changes in these applications and their correct authorization. Considering the huge impact of IT on the organization, IT is a key audit matter.
Based on the duties that we performed, we concluded that there is sufficient foundation for us to rely on the functional IT systems in auditing the annual accounts. Before I hand you back to the other speaker, Mr. Bos, you're still here. Last year, I wasn't able to tell you how many management letter points there were and this year and how that's related to the number of management issues in the management letter from the previous year. In 2016, there were nine relevant topics that we mentioned to the management in our advisory letter. This year, there were 10 topics. You should not see that as an indication of a deteriorated audit setting or processes. On the contrary, I think that they have improved substantially in some points. I'm handing you back to the chairman. Thank you very much, Mr. Hoogeboom.
Please keep your questions short and snappy. Unlike in the previous round, it's not about extensive comments. These are short questions on substance only. We'll take all the questions in one round, and I'll see whether the accountant should answer them or the CFO of the ING. I'll start now, and I'll use a different system. I apologize, Mr. Bos, you were the last speaker. Now I'm going to give Mr. Spang the floor please, first. As you know, Mr. Van der Veer, I'm always brief. I warned you once, and then you gave me some extra time. Now the question for the auditor. IT is very important. On 22 April this year, we saw on Teletekst that Minister Grapperhaus mentioned that in the Netherlands we're running into serious problems. You visited several countries. Which countries?
Because you said the most important countries were visited by you once or multiple times. What are the most important countries of the ING operations? You keep talking about multiple visits, but how many times did you visit those specific countries? In those countries, did you also examine the IT system there and whether there might be unfortunate issues in the IT network? Okay, that's your question. Now on to Mr. Jorna. Thank you, Mr. Chairman. I'd like to ask the auditor about the materiality of EUR 300 million on the one hand. On the other hand, one of the key audit matters concerned the pending lawsuits. If you say that you observed no discrepancies in these cases that exceed the materiality, do you believe that this won't exceed EUR 300 million?
Which internal audits did you perform concerning compliance and Know Your Customer and transactions that banks shouldn't do? Which audits did you perform to ascertain that? As for the annual accounts in their own right, if you'd like to look at those in Germany, they're receiving too much money in savings because of your excellent interest rates. I've lost track of the situation. In the same country where you receive it, do you have to reinvest there, too? Trembling, I asked Mr. Timmermans last year about the Alt-A mortgages. Mr. Timmermans said that nothing was amiss. The auditor confirmed that, 6 months later, ING almost tanked and would have without any help. Mr. Timmermans' certainty of the Alt-A was not entirely accurate, and I am worried about the legal consequences.
Mr. Bos, I was delighted that Mr. Jorna is raising the Alt-A mortgages and Mr. Timmermans. I remember that as for the Alt-A mortgages, ING had less than 0.5% of arrears in payments, so I think that remark is misplaced. That was on my behalf. I'd like Mr. Hoogeboom. No, Hoogeboom, he's corrected. What mark would you assign ING today compared with last year? The reason for my question is that we, as shareholders, I have a good head for numbers to have plenty of places to turn if I need more help. It's all pretty difficult, it's in English now. My English is not wonderful, I would ask you to add a report in Dutch in the future. What mark would you attribute to ING now with respect to last year? Thank you, Mr. Bos.
Mr. Steijns, I'll wrap up. Thank you, Mr. Chairman. I'm Mr. Steijns from the SRB. We just spoke about that requirement of the Dutch U.S. authorities. There was some debate about that. We didn't hear the auditor about that, I'd like to hear more from the auditor and how the auditor feels about that. I also spoke about something that does concern us. That's the repayment ability concerning the cash flow. There is some financial damage. The only possible conclusion is, how do you say it? That the cash flow is weak solvency will also deteriorate. Thank you. Mr. Hoogeboom. Thank you. Where should we start? Should we start with Mr. Spanjer? That IT question? The chairman is in charge. I'm not. Your question is that IT in the Netherlands is one thing, that matters worldwide.
When we issue an auditor statement, it is issued for ING Group concerning all local entities banks, including IT. IT is a broad concept for access to systems or IT general controls user access in English. I can tell you that with respect to last year, we're in control globally are in better shape than last year. That was a key audit matter that was raised in the management letter last year is now back on track. That's part one. You had a question about our visits abroad. I jotted that down. If you look at ING you take the Netherlands, Belgium, Germany, that covers 60% or 70% of all assets, liabilities, earnings. We visit those countries several times a year, we attend the audit committees, the management closing meetings, we also examine the records.
We did that this year, too. We also visited London, Singapore, and Australia. I think that answers your question. You also mentioned doing business with non-banks, and of course, they're far more likely to leak information and IT, which a bank can't do. How have you secured that IT? Well, as I said, when we are on a local visit, we look at the records of the local auditor who is explicitly instructed to examine IT and to check access control and security of the systems there. In all the countries, not only the ones that we visited, but we look at the reports from all countries of all local auditors and check whether they pass muster. The pending legal matter that was mentioned by two speakers, I believe. First, a materiality.
That's set at EUR 300 million, which is 4.1% of the profit before tax and is therefore within the guidance of what's expected from major banks. About the lawsuit. I'm here as an auditor, and you're asking me about my role as an auditor in this specific issue. That concerns two components. First, procedural, and second, last but not least, the figures. In the procedure, my instructions appear in the directions 240 and 250 for auditors, which concern possible breach of legislation and regulations, as well as signs of fraud. We're responsible for ascertaining briefly as auditors that, in this case, the management took the right measures to investigate these matters. I don't do that on my own. I work with forensic experts because that's a specialty in its own right. We also request letters from attorneys internally and externally.
There's nearly two dozen of them, and we discuss the content of each and every one of them. As far as that procedure is concerned, I can confirm that management took the right steps to investigate this and to bring it to a successful conclusion. That's the procedure. My question about that is, in the course of that procedure, did you determine that there was proper leadership or not? What do you mean by leadership? Well, if we look where KPMG was at SBM, the CEO has admitted that he was in charge. You subjected that to your auditor's rules as well. He was basically in charge of bribery and other things that were wrong and so on. Don't challenge me to add more to that list of KPMG. I'm talking about the second, third, and fourth line.
Was there any management of subordinates concerning undesirable matters? I understand your question, but back to my instructions from the Shareholders and the Supervisory Board members. It's to examine the annual accounts to see whether they accurately reflect assets and results based on the one hand on IFRS and on the other hand, the 240, 250 group of instructions for auditors. I covered all steps that are required and need to be included in such a situation. They're listed one by one in 240, 250, and they basically involve determining, because this is something from the past, that the management takes the right steps to investigate this, both in terms of facts and potential improvements. I can confirm that management did this properly and adequately. Mr. Jorna, you're just arguing back and forth, so let's wrap it up here.
I wasn't done because I'd also like to provide the explanation about financials. Mr. Spanjer and Mr. Van Rijswijk already said something about that, but I would like to tell you about IFRS, which sets the standards. That question is whether the company should make a provision or not. There are three steps. First, there's an obligation. There's a current obligation arising from the past, a firm obligation. We believe together with management that they should. Next, the second question, because the process comprises three stages. Is there an outflow of cash likely? If the answer is yes, can the management make a reliable estimate, not just any estimate, but a reliable estimate? We, together with the management, believe that at the present stage, that is not possible, and IFRS does not allow a middle or including an arbitrary amount or setting a maximum on the amount.
I hope that answers your questions. Please continue with the other questions. Okay. We've covered IT. Okay, the mark to be assigned by both. I have a lot of instructions, especially the audit instruction is not about issuing marks and keeping score, but I'll try to answer your question. That's the shortest and easiest. Yes, but it's also the least refined. If you say it went from six to 6.5, you're almost taking the words out of my mouth. If we look at the extent and nature of succession, then I think that the firm is in somewhat better shape than last year. From six to six and a half or seven to seven and a half? Better. From seven and a half to eight. I'll leave that to your judgment. I think we understand where you're going, Mr. Van der Bos.
I have one more question for Mr. Van der Veer arising from the remark by the VEB man about those Alt-A mortgages. How much did that actually cost the ING as far as impairments on the Alt-A mortgages are concerned? That's a question for the CFO. Well, if you state a figure, that's all very well and good, but according to my information, the ING didn't pay a penny for that Alt-A mortgages issue, except that the security by the state was very expensive, so the impairments on those mortgages ended up not costing a penny. That's why I mentioned that. Okay. We're done with the questions and comments. All we're going to have now are answers. Mr. Hoogeboom, the remaining questions will be answered by the CFO. Well, there was another question about solvency and cash and cash equivalents.
Of course, for a bank, those are very important for the core capital ratio, as well as the cash and cash equivalents. We include those both locally and centrally in our audit. What are you saying about the weakness? The weakness. Our role is not to determine whether the ratio is weak or strong. Our job is to determine that the ratios have been accurately and completely included and properly explained by management, and they are. You didn't write anything about that in the management letter? Well, you could implicitly say that where I started my piece with the assumption of continuity has been substantiated. That's an important aspect. Okay, Mr. Timmermans is going to wrap up this round.
Mr. Stevens, if you look at the ING solvency, that's at 14.7, and the average of the European banks is roughly 13.5, so you could say yes, but that's only the current level. If you then look at the average return on solvency for ING, that's just over 10%. If you look at the average in Europe, it's a bit below 7. So that's why, relatively speaking, there's always room for improvement, but these are nonetheless good figures. If you look at free solvency, then the question is can you distribute it? What we do with those 10% is that we use about half of that 10% earnings to reinvest to grow the company. The other half will be distributed to you in the form of a dividend.
That's the brief summary of the free cash flow at the ING, which is generally quite robust. I wouldn't describe it as a problem. Back to Mr. Van der Bos about the Alt-A mortgages. You were kind enough to examine that portfolio in 2007 that amounted to about EUR 30 billion. It had a market value that at a certain point stood at 55%, so the market was abysmal if you look at the actual losses on that portfolio. We never rode out the entire course of that portfolio, but the losses on that portfolio, I believe it amounted to about EUR 1.5 billion. If you look at the total lending losses at the ING. In a peak year, they were roughly around EUR 2 billion. If you look at this specific portfolio, then that's not even the portfolio with the worst performance over its entire course.
I'm going to wrap up agenda item two and I thank both auditors. On to the vote about the annual accounts for 2017. First I have to tell you how many shareholders are represented here. That's over 6,700 shares at registration date, or EUR 2.8 billion on the record date. So votes may be cast on those EUR 2.8 billion ordinary shares. At the start of the meeting, I said there's about EUR 3.9 billion shares. If you divide that, then that works out to 72% of the capital is represented here. What else does it say there? I see some proxies and the like. Mrs. Leemreize knows all of this. We're going to open the vote. We're going to vote on agenda item 2E. Most of you know the drill. If you don't, you received a voting card and a voting handset.
You can insert the card with a gold chip facing you into the handset. Then you'll see a welcome message and your name displayed. If you insert the card the wrong way into the handset, you'll see a warning. If you want to cast your vote, there are three options. One is in favor, two is against, and three is abstain. On the screens, you see confirmation of your vote. The moment the vote is open, you'll be able to change that, but the moment the vote is closed, you can no longer change the vote you cast. If the voting handset malfunctions, we have hostesses in this area to assist you. We're going to open the vote on agenda item 2E, the annual accounts for 2017. Please cast your vote. Not everybody has cast their vote yet.
I'm just going to wait for a couple of seconds. The vote is closed. Just going to wait for the outcome. I can see the results. I'm not going to read out all those numbers, but 99.77% has voted in favor. Thank you for that. The financial statements have been adopted. Now I'd like to proceed to the profit retention and distribution policy. I'd like to refer to the annual report. My explanation is as follows. ING is aiming at maintaining a healthy core capital ratio that is over and above the current requirements of fully loaded core capital ratio. The requirements are now 11.8% plus a comfortable management buffer. Well, this is jargon anyway, that also comprises the Pillar 2 guidance. With a core capital ratio of 14.7%, as Mr. Timmermans just said, we are meeting those requirements.
ING is committed to pay out a progressive dividend in which dividend proposals will also be based on expected future capital requirements, growth potential for the group, the net result, and developments in rules and regulations or legislation. I would prefer to proceed to the vote unless anybody has a very urgent question. Very briefly, Mr. Jorna, please. Yes. How sustainable is this dividend in view of your policy, stable and growing dividend policy in the context of Basel IV? Have you already reflected those requirements? Is 14.7 really that comfortable? I assume this is the only question. Mr. Timmermans.
Basel IV, Mr. Jorna. Yes, will lead to stricter requirements, and we have indicated something this past quarter in which you see that in 10 years' time, under the same conditions with the same portfolio, you would require 15% more capital. We feel that we are comfortable, and we're over and above the minimum, and we assume that over the 10 years we will be making more money, not be paying out everything in terms of dividend, which means that you don't have to immediately change your dividend policy. In that respect, we feel comfortable with what we're doing. Thank you. I'd like to proceed to 3B, dividend. I'd also like to refer to the annual report. Net profit for 2017 amounted to EUR 4.9 billion, added to the reserves, EUR 2.3 billion, which means that we have an amount of EUR 2.6 billion available to the general meeting.
We propose to pay out a dividend of EUR 0.67. Taking into account the interim dividend of EUR 0.24, there'll be a final dividend of EUR 0.43. The amount of EUR 0.43 per ordinary share shall be paid out as a final dividend in cash, upon withhold Dutch dividend tax, and the supervisory board recommends that the AGM accept this proposal. May I proceed to the vote? Thank you. We shall proceed to the vote. You may cast your vote on agenda item 3B, dividend for 2017. The vote is open. Vote is closed, and we'll just wait for the results to appear on the screen. The dividend proposal has been carried with 99.4%. Thank you. I'd like to proceed to item 4A of the agenda, ING's application of the revised Dutch Corporate Governance Code. I'm addressing the matter. I'd like to refer to the annual report.
Why do we have this item on the agenda? Well, we have a revised Dutch Corporate Governance Code, which is the Van Manen code, it's applicable to Dutch-listed companies such as ING. What is the difference between this code and the previous one? There is more focus on the long-term value and more focus on the word culture. The premise for ING is that it complies with the code, the publication of the application of Dutch Corporate Governance Codes by ING Groep. That is where you can read It's a lengthy document, but it's available for perusal. You can read why and how ING complies with this code and where it deviates. This is not a voting item. This is just by way of information, I assume everybody is happy with this new code. Thank you for that.
I'd like to proceed to item 4B of the agenda, which is the amendment of the Executive Board profile. What is the difference here? We've added to the profile that we aim for a 30% gender diversity. That's a ratio of men and women. We had to do that because this is also something that is required by the new code. It's quite a technical change to make sure that our profiles are correct, we're happy to take this on board. I can tell from your faces that you agree with that. Amendment of the profile of the Supervisory Board, well, we also changed that profile. I'm sorry. This also concerns the 30% again. I'm sorry. Don't really get it. Ah, there it is. Furthermore, we've included a change in the period, or the mandate, in conformity with the revised Dutch Corporate Governance Code.
A supervisory director can be appointed for a period of two times four years, then twice there can be a reappointment for a period of two years. The reappointment will not take place automatically, but will be subject to the performance of the supervisory director. Well, this is a point of information in which we disclose that we've changed something, unless you want to say something.
Yes, please be concise.
I shall be concise. The diversity and competence matrix, perhaps you can include that because it concerns diversity in the Executive Board and the Supervisory Board, I would suggest that you apply it to the profile of the Executive Board and Supervisory Board in the annual report. That way, it would be easier for us to see whether the members of both boards comply with that profile with the requirements. Second point, your 30% standard.
Right now, you're not complying with the 30%, not in Supervisory Board. What are the steps that you have taken or are taking in order to comply? I shall answer briefly. Well, the matrix here is up and coming. Don't worry. In terms of gender diversity, we complied, but we had an excellent female supervisory director who left the board unexpectedly in September, also the procedures for approval by the European Central Bank and De Nederlandsche Bank take quite a while. We would have wanted to propose a new supervisory director, but we're not proposing one because we're simply not there yet, which is a nuisance indeed. We would have liked to do it differently, but that's simply the way it is.
Temporarily, to put it bluntly, we are deviating from the code, but we simply cannot speed up. Thank you, Chairman. Mr. Stevenson, please.
Yes, I can be very brief because in 2019, half the supervisory board will be stepping down, or 2021 rather. Are you going to anticipate on that, or what is your policy? Keeping in mind the continuity of the supervisory board. Mr. Van der Veer.
Well, I grew up thinking in the long term, people can always be reappointed. I would like to leave my point number two to Mr. Wijers. I will be happy to leave it to Mr. Wijers. On a serious note, of course, we have planning. You must pay attention. There are people that can be reappointed and others who cannot be reappointed. Yes, but at this point, they would be stepping down. Mr. Van der Veer.
Well, if someone has served for years, he can be reappointed, or she can be reappointed again two times for two years if there is reason for that. But the issue, Mr. Stevenson, and please take my word for it, this is simply standard bread and butter, as they say in English, for the nomination committee. Obviously, they are keeping an eye on this in view of continuity of the company. I can rest assured that next year you will have a proper schedule. Yes, we always keep in mind that there may be developments in the long term, sometimes as occurred in September, you can have to deal with an unexpected event. The supervisory director had been with us for a very short period of time, and it takes quite a long time to get the approval of the regulatory authorities.
It is something that, yes, we do take into account. Ms. Haase was appointed last year. In 2021, she could stay on till 2022. Why don't you leave that to the people who deal with that? We do not want to waste our time. I do not think our shareholders want that. Yes, it is a suggestion, but I would nonetheless ask you to develop a proper roster. Thank you for that. Item 5, the agenda, which is granting discharge of liability of members and former members of the executive board. We can proceed to address this item 5A. We have already explained all this in the financial statements 2017, the report of the executive board, the Dutch Corporate Governance Code, and the chapter on the Sarbanes-Oxley Act, remuneration, and so on and so forth. I would like to proceed immediately to the vote, Mr. Jorna. Of course. Yes.
I have a shareholder's right to speak, so I would like to avail myself of that possibility. We have taken a look at the executive board and looked at the pros and the cons, and ultimately we decided to vote in favor. But we do have a question. In the entire remuneration issue, we never heard from Mr. Hamers. We have a new Dutch Corporate Governance Code, and the code says that you should ask Mr. Hamers how he feels about his salary, and he should give an answer. My question is, can Mr. Hamers perhaps share his point of view with us as he shared his views with you on his salary? The code says, and I think that the VEB was one of the parties supporting the new code.
It clearly says that it's a conversation between the supervisory directors and members of the Executive Board, that it is not necessary to publish, disclose anything externally. It's not necessary, but it is possible. We're not going to do it. That's clear. I'd like to proceed to discharge, and the vote is open. You can vote on the discharge of members of the Executive Board, and the vote is open. I'd like to close the vote, and let's wait for the results on the screen. The proposal has been carried with almost 97%. Thank you for that. Now we're proceeding with item 5B, discharge of members of the Supervisory Board. The same explanation as I just gave you. You have the documents. Would you like to ask a question? I'm looking at Mr. Jorna. No, no question.
We also discussed the matter, and with 1,186,000 votes, we're going to vote against. For the following reason, we feel that the Supervisory Board has made a major mistake with this remuneration proposal, and this has not been discussed yet. Actually, we feel, and with Mr. Wijers as a Chairman, the situation may be different because he has experience with Heineken, because you used every trick in the box because you want to increase the variable and the fixed salary. We think that the turn at the top is a wrong signal to your employees.
I don't agree with the words that you're using. I hear what you say, and I'd like to give the floor to Henk Broekink, who's the Chairman of the Remuneration Committee. I think the structure that was used for the proposal, but we can rehash it all if you want.
Has led to the fact that this concerns a significant fixed part of the salary package. It's not a way to circumvent variable remuneration. It is fixed remuneration. What's more, should there have been conditions attached to the shares relating them to performance somehow or other, that would have qualified immediately as variable remuneration, and that's simply not allowable. Obviously, we had our proposal scrutinized to check and see whether it meets the criteria, which is a maximum of 20%, and we came out with flying colors. We consulted experts to find out whether there was a glitch or there was an issue, which was not the case. Mr. Van der Veer, I'd like to support what he said, and I would like to reiterate, we don't recognize your words. There was no intention whatsoever to circumvent anything. It was a salary in the long term.
I would appreciate it should you reconsider your position and your selection of words.
In that sense, why would you then choose a variable element such as shares? The share price, and even though they only vest in 5 years' time, and the share price, and you have faith in your company, the share price is going to increase. In that respect, it simply is variable. You can also see that the short-term remuneration is always in cash and in shares. I haven't seen that the fixed salary, even though this is novel, that the fixed salary would be paid out in shares, which is why we consider this to be a shortcut or a deviation. Mr. Broekink, I'm just going to ask him whether he wants to make a closing remark.
Yes, I'd be happy to comment on that because there are other aspects as well. One of which is that you say the share price is going to increase. The share price can also go down. That would be the answer that I would obviously have to give you. Another important element is, and it might be useful to explain this again. There may be this idea that we would be talking about a 50% salary increase now, that's not the case. What we said, it is a matter of granting a package of shares that will only vest in 5 years' time. We thought, and in part, we still think that with that, we do justice to the connection with the long-term or medium long-term value creation.
That is in line with a number of elements that we find are emphasized in the new Dutch Corporate Governance Code. That is the reason why we did it the way we did. If that had immediately led to a salary increase of 50% to be paid out in cash or otherwise, then we would have been able to understand the turmoil. For all these reasons, we decided to go for this other instrument, and allow me to repeat it yet again. Within the limitations that the current system gives of 20% maximum variable, we haven't been able to find anything else that would do justice to increasing the package in the medium long-term. We felt that this was a very charming solution. There were many experts that supported us in this respect.
Mr. Chairman? I just wanted to add something on this point. The VEB is right.
There's been a lot of turmoil, the bank should concentrate on banking. We shouldn't be looking at salaries. We should move forward. I would like to thank the executive board, I will be voting in favor. I think we should stop all this fussing about. The proposal to grant discharge of the members of the supervisory board will be put to your vote. Mr. Vink? Yes. You can vote now on the discharge of the members of the supervisory board. The vote is open. Vote is closed. We'll just wait for the results. The proposal has been carried with 95.1%. Thank you for that. I'd like to proceed to Item 6 of the agenda. This is the amendment of the remuneration policy for the members of the executive board.
You may think that's strange, that is due to the fact that the agenda had already been published before we withdrew the proposal. This is water under the bridge, this issue. Because it's been withdrawn and everything has already been said about it, I would like to proceed immediately to Item 7 of the agenda, which is the composition of the supervisory board. We're talking about the reappointment of Eric Boyer, this is a decision point. First of all, by way of explanation, the supervisory board is aiming for a composition of the supervisory board with a minimum of 30% men and 30% women, as we just discussed. In the context of the fact that in September 2017, Ann Sherry stepped down unexpectedly, all of a sudden we're below this percentage.
We know, I am not going to repeat all of this again, but since this is concerning the Supervisory Board, I'd like to confirm once again that we are doing our utmost to, once again, reach the 30%, but we do not have them yet. Today, I would like to address the reappointment of Eric Boyer. I'd like to inform you that we have drawn up the appointment in accordance with all the guidelines concerned. It is a binding proposal or nomination rather. Do you have any questions, Mr. Jorna? Chairman, I do not know whether I should ask this here under this item because it does not really concern the appointment of Mr. Boyer, but it concerns the fact that Mr. Wijers is moving on to your position. Would you like me to raise this here or under any other business?
I think, first of all, we should vote on Mr. Boyer, because otherwise we will get all mixed up with all these different topics. Then we will give you the opportunity to ask a question. I'd like to open the vote on Mr. Boyer. You can cast your vote now for the reappointment of Mr. Boyer. If you have all cast your vote, I would like to close the vote now, and we will just wait for the results to appear on the screen. Mr. Boyer has been appointed with 91.5% of the votes. Eric, congratulations. Now, I'd like to give Mr. Jorna the opportunity to ask a question as you just pointed out. Yes, Chairman. Mr. Wijers is very close to my heart, particularly at Heineken, where we enjoy a beer. I am very much in favor of appointing him as a chairman.
However, legislation stipulates that you may not have more than five points. Chairman at Heineken, two points. Chairman here, ING, two points. Supervisory director HAL, one. That is five. Remains the Concertgebouw, and unfortunately, the Concertgebouw, unfortunately for Mr. Wijers, the Concertgebouw, where he is a chairman, qualifies as two points, two out of three points. It scores as a major company, he ends up with seven points. In that sense, Mr. Wijers is shaking his head. Mr. Wijers, the number of employees has to exceed 250. The Concertgebouw meets that requirement, and the value of the assets has to be in excess of 17.5 million EUR, and the Concertgebouw also complies with that according to the annual report. That is seven points, and you are infringing the law.
I am sorry, there is no other way around it. I am happy for you to continue, but you have got to let go of one of your positions. I can make it better because the slogan is, "Everything sounds better in the Concertgebouw." Let me help you. At the time, we checked to see whether Concertgebouw count for two points, and we looked at it. I cannot remember exactly what the details were, but ultimately, the decision was that these points do not count. You should not look at the law on administration and supervision, but you should look at other requirements, the CRD requirements. If you look at the CRD requirements, you find an entirely different calculation. We cannot help it that the two different calculation methods and Mr. Wijers would comply with the criterion. I will be happy to discuss this with you bilaterally.
Mr. Wijers is going to continue to sound lovely in the Concertgebouw. Mr. Vreeke, please be concise because in fact, I had already wrapped up this item on composition. I am extremely pleased with Mr. Wijers as the successor to Mr. Van der Veer because at Heineken, he introduced Heineken 0.0, and here he is going to continue to work on an environmentally friendly organization. I think that we have a rosy future ahead of us with Mr. Wijers. Item 8A. These are always very technical issues, authorization to issue ordinary shares. I am going to try to read it out really quickly. Agenda item 8A and 8B concern the authorization of the executive board to issue new shares, and the proposals to be dealt with at this meeting are in accordance with the other proposal at the AGMs of preceding years.
This authorization provides more flexibility than the authorizations requested prior to 2016. Therefore, for ING, it will be much easier to, if necessary, respond to developments in the financial market such as the concentration of large shareholders in the corporate governance review 2015 and 2016. The authorizations are also in accordance with international market parties. In this item of the agenda, 8A, we are dealing with the authorization to issue 40% of subscribed capital with, insofar as reasonably possible, preemptive rights for existing shareholders. In order to avoid any misunderstandings, 40% boils down to a nominal amount of, and I can read it out, but then you would know what you will be voting on. This authorization can be used for any purpose of funding, not only to strengthen capital, but also to fund acquisitions.
The authorization would be valid for a period of 18 months, subject to extension by the AGM. We would like to emphasize that it is the intention of ING to do anything that is reasonably possible in order to respect preemptive rights of shareholders and to avoid any dilution. All this in accordance with the applicable rules and regulations and applicable law. Further information as to how we will be dealing with the preemptive right of shareholders is included in the annual report for 2017. The supervisory board has already approved the proposal. The authorization will replace the authorization granted by the previous AGM under item 8A. I know from the past that a number of people felt that the 40% was rather high, and it is something that we are already familiar with. This is not new information for us.
Nonetheless, I would like to ask you whether there are any questions. Mr. Federbach. Thank you, Mr. Chairman. My name is Gert Federbach. I work for PGGM Investments, and I am voting on behalf of our customers, including Pensioenfonds Zorg en Welzijn. You referred to our comment that we made at previous meetings, and I would like to reiterate it here for the minutes also in this meeting. We intend to vote against the proposal 8A, precisely because of the level of the authorization. We would call on you to restrict your authorization only to exceptional financial circumstances in which you would avail yourself of the 10 plus 10, which is a common percentage in the Netherlands. Once again, I would request you to commit yourself to that percentage and not to use it for mergers and acquisitions. Thank you. We understand your request.
Please vote on agenda item 8A. I'll state the amount for the minutes. This concerns 40% of the issued capital. It concerns EUR 15,343,160.67. Please cast your vote. This is the nominal amount, not its stock exchange value. The total amount was, it says million where I am, EUR 15,543,161.76. That's the amount stated. Over to the notary. It's still EUR 15 million. EUR 15.5 million approximately. The notary is shaking his head. Please cast your vote on 8A. If you will cast your vote, I close the vote and we'll see the results. The proposal has been carried with 90.2% of the votes cast in favor. Thank you. On to agenda item 8B. This concerns the issue of ordinary shares with or without preemptive rights of existing shareholders. The proposal, as explained, Mr. Fink will state the amount in a moment.
I can already see that it's in the EUR millions. This concerns 10%. The difference compared with the previous proposal is that no preemptive right is associated. Does anybody have any questions? I'll proceed to the vote. No, that's the photographer. There's a question at microphone 3.
Mr. Chairman, I'm Mr. Heineman. I'm a private shareholder living in The Hague. I attend quite a few shareholders' meetings. I've never seen an item such as 8B, authority to issue ordinary shares, with or without the preemptive right. It's always without preemptive right. Why did this suddenly come about at the ING? That's very unusual. Can you please explain that?
When I was a little boy, I would leave with no coat on. Mr. Fink, it's a high percentage. That safeguards shareholders' rights. That's why the authorization is being requested for that percentage with regard to the preemptive right. I think that serves your interests.
I also have a question for any other business. I'm going to remain where I am.
Okay. Let's vote on agenda item 8B, the authorization to issue 10%, which equals EUR 3,885,790.44. That's the base value, the nominal amount. Please cast your vote on agenda item 8B. If you've cast your vote, we'll wait for the results. The proposal has been carried with 98.1% of the votes cast in favor. On to agenda item nine, this is the reverse authorization of the executive board to acquire ordinary shares in the company's capital. This is purchasing shares. Okay, this concerns a maximum of 10% valid for 18 months at a purchasing price that should be at least EUR 0.01 and should not be higher than the highest share price Euronext. We'll ask, this is totally standard.
I'll open the floor to questions. This is a standard item. Otherwise, we'll vote. Now we're going to vote. Please cast your vote on this agenda item nine. Please cast your vote. The vote is open.
I close the voting and we wait for the results.
I close the vote, we'll wait for the results concerning agenda item 9.
The proposal is approved.
Proposal has been carried with 98.6% of the votes cast in favor. Thank you. That takes me to agenda item 10. That's any other business. I'll give you another opportunity to ask brief questions. After that, I have some concluding remarks before we wrap up over drinks in the adjacent area. Are there questions? I see Mr. Heineman. Let's start with you. Then we'll have a round with the different microphones. Mr. Heineman.
Mr. Chairman, why doesn't the ING offer an option dividend? There's quite a bit of turmoil in the government about abolishing the dividend tax, that might stop the proposal from being adopted. All those problems could easily have been averted if all firms offered an optional dividend. The optional dividend, which would largely be appealing to foreign shareholders, then they could participate in the company tax-free, not only receiving money but also enjoying the rising profits in the companies. That's the idea, that the dividend will rise along with the profits and earnings in the company. Why couldn't we do this in all cases also with other firms having this optional dividend? That would solve the entire problem pending in the government.
We'll start with all questions and have one concluding round of answers at the end. Onto microphone six. Please keep your question brief.
I have two questions. I'm [Mr. Lissarsoy]. The first is about semantics, and I think that we can resolve that fairly easily. Where the sustainability policy of the ING keeps mentioning low carbon. I hope that that's not the objective. I would like to replace that with low carbon dioxide emission or curtailing carbon dioxide emissions. Low carbon would mean I'm trying to eliminate all staff as quickly as possible. The second point is more substantial. It relates to privacy, and you know that's a hot topic. Protecting the privacy of customers and everybody who entrusts data to the ING. Quite honestly, I had to disclose personal data to the ING, and they were leaked very quickly. I complained to the ING via the contact form posted on the ING website.
I received no response, and repeating the complaint merely yielded the message the ING does not disclose information to third parties, and that didn't get me anywhere.
Did you have another question, sir?
I have a very brief question. Apparently, I missed it during the meeting on page 110 in the annual report. I have said previously, profit is an opinion, cash is a fact. Is it disconcerting that in this bank, the operating cash flow is negative? The total cash flow is positive, but the operating cash flow is negative. See page 110. Thank you, Mr. Chairman. I would like to talk about women. I am looking at you and see no woman among you. I appreciate women, and I am not pleased about this. I know that that gentleman is pointing to the beautiful woman who was there. Apparently, she does not want me to see her. Perhaps she will return. The gender ratio is skewed. What do you think of that?
Onto microphone four.
Hardly anything has been said about this, I have a few questions about remuneration. What damages did ING suffer? Please tell me that. Second, who is footing the bill? Quite honestly, I hope it is not us as shareholders or the account holders, because we were not even consulted. Who is going to foot the bill? Next about the principles of the Supervisory Board and Mr. Broekink said, we are not about principles, we deal with other things. The more I watch this event, I notice Mr. Balkenende and I have been associating him with the Balkenende standard, and I associate standards with principles. I felt there was a conflict there. Mrs. Haase. Thank you, Mr. Chairman.
Please tell me how many retail and how many wholesale customers are identified, because I did not get the sense of how many people who, of course, can vote with their feet is taken into consideration in the statements by Mr. Hamers. My second question. Last year, I realized that with all the changes in how you communicate with the bank is sidelining a large share of the population. During this meeting, others have stated that we need to do justice to people who, as a result of all different problems, would still like respect and would still like to care for themselves and do not want to depend on others because of all kinds of changing procedures, as Mr. Hamers says it. As I just read and remember, the slip to transfer payments on paper is going to disappear at the end of this year.
Mr. Spanjer, I have a question about the AVG of 25 May. Is your IT prepared for that? On 25 May, when it starts, after zero sharp, will you be able to handle it? On 2 April this year, there was a notice on Teletekst by Mr. Grapperhaus with measures for the digital dike reinforcement. The ministry thinks it's time to get to work on this because he sees a national threat. My question is, are you going to join the digital dike reinforcement? Of course, a banking system will be seriously impacted if the wrong card is driving on the highway. I'm Rengers. I'm a private shareholder. Last year, I asked a question about a problem which has yet to be resolved to my satisfaction. We can't resolve it here, but I would like to mention it.
Last week, I encountered another problem, I spoke up, I went to Leeuwarden, and they resolved it there, thanks to Mrs. Kuipers and Mrs. Andringa , to my utmost satisfaction within 15 minutes. Many people can learn something from these two ladies. After discussing remuneration policy all afternoon, I think you should pay these two ladies a bit more. Maybe you should give them a bonus. Now, Ralph will start answering the questions. I'll check them off. As for the optional dividend, quite honestly, Mr. Heineman, we have checked into that regularly. There are some supporters, but more importantly, there's resistance. There's very little interest because most investors can deduct the dividend tax from their income, and it also causes dilution that leads to some resistance. If a majority of our shareholders support this idea, we'll certainly consider it.
We don't sense that there's majority support for that, we're not going to pursue it for the time being. Now, Mr. Lissarsoy . I have a brief remark. I almost forgot. Well, hold that thought. Mr. Lissarsoy will certainly examine that remark about carbon dioxide emissions, if your data were indeed leaked, we deeply apologize, and we'll address that ASAP. We have people who can continue on that. Now, Koos will talk about the cash flow. As for the gender balance, yes, we do care about that. No, no. Now I'm busy with my answers. We have a dedicated program to recruit more and more women and to advance them up the ranks to get them into management.
Luckily, we have extremely competent women who can serve as a role model for many women and encourage them to pursue careers at the ING, we think that's a very important message. I had forgotten to tell you that most people I interact with at the ING are women, they're great gals, and I'm very satisfied with them. In fact, I'm more satisfied with them than the others pertaining to my gender. Next about damages. Well, yes, that's a reputational damage, we can't put a financial price to that. Depending on who is looking at it, the ING has sustained reputational damages, that doesn't surface in the development of our business plan. We'll get back to you about that in the next quarter, but reputational damage is indisputably damage, it's regrettable. Okay, what's reputational damage if it doesn't cost me a penny?
What are we complaining about? Have we thought of a monster that doesn't really exist and doesn't cause any damage? You say that you didn't experience any damage. Well, reputational damage. How does that manifest? A bank is about money and capital. Not everything in a bank is about money. Well, there are also principles. You just said that you're not about principles, so you didn't suffer any damage. I'm going to wrap up this section of the discussion. Materialistically, apparently, we didn't experience damage. It's all in our mind. Well, reputational damage is difficult to impossible to quantify. Well, I'm trying to quantify. If you can't, then there wasn't any. I have nothing to add. Thank you. As for Mrs. Haase. Who is going to cover the reputational damage? We track our reputation score. At a certain point it declined. It's rising again.
Every day or every week, we measure the Net Promoter Score and how satisfied customers are with ING. That took a brief hit, we're back at the top in some weeks. Our services are excellent according to customer perception. That doesn't mean that in a certain period, customers and non-customers alike might have been dissatisfied briefly about ING. We'll have to do our best to restore that confidence. I can't put a price tag to that. I don't think there is a price tag to it. If you say that the only damage you know is financially quantifiable, that's your perception. We think that reputational damage is also damage. I agree entirely with you. There are several types of damage. It wasn't a financial problem for us, that's what you're saying, right? Yes. Okay.
The other type, how did you experience that? I don't notice it when I use the ATM machine. Nobody is decrying me or booing me at ING ATMs. I'm not going to pursue this debate. We understand your question. We're not going to follow up on that. We still have to answer Mrs. Haase's question. Thank you very much for your question. If I understood you correctly, when Mr. Hommen is talking about numbers of customers, 30.4 million at the end of the year, how many are retail and how many are wholesale? Is that what I understood? Yes. Of the total of 37 million ING customers. The major wholesale customers, there are a few thousands of them. Next, there are the SME customers. There are a few hundred thousand of those. I can't tell you those figures off the top of my head.
Most of that 37.4, so about 36.5 million to 37 million consists of consumer, so retail customers. That means that the 20,000 people who switched to Triodos after the issue about your remuneration hit the media, well, they're gone. It's only a very small percentage. The damage is minimal. Well, those numbers don't ring a bell. I don't know where you found them. Every day we track how many new customers we receive and how many leave. We certainly didn't notice those numbers. Thank you for your reply, Mr. Van der Veer. For managing and properly answering my last question as well. Mr. Spanjer had two questions. I think Steven is the best equipped to answer them. It's about GDPR and other monitoring tools. We're talking about the GDPR. We're hard at work to get that up to scratch before May 25th.
You mentioned digital dike reinforcement, we're working together with banks and teams from the government and e-companies, not only in the Netherlands but also at the European level. We're testing whether we're properly equipped yet. Apparently, we're not yet, we're trying to maintain the digital dike reinforcement to be ready for the GDPR. Thank you for answering my question. I have another one. How about if next year, what if we start at 11:00 A.M. instead of at 2:00 P.M.? Perhaps you can ask Mr. Wijers as well. Mr. Spanjer, you can ask Mr. Wijers about that over drinks. It's past 6:00 P.M. We're not going to hold the meeting any longer. There's another answer for the person from Leeuwarden and Mr. Heineman. Something has flipped his mind.
Yes, it occurs to me again, Mr. Hamers asserted that an optional dividend will cause dilution of shares. I don't understand item nine or 10. There's the authorization to repurchase company shares, it doesn't matter whether money or shares leave the company. It's six of one or half a dozen of the other. It really doesn't matter. I don't understand the dilution point. Okay. Shares under agenda item nine are repurchased, they're not canceled. They could be sold again in normal banking operations. You're not willing to make a commitment to reconsider the optional dividend next year, no. I have the courage to state that now. Does it take that much courage? We still have two unanswered questions. One was from Mr. Rengers . Thank you for your compliment to our coworkers.
I propose that after the meeting, we forward you to the right person if it still hasn't been resolved. There was [Mr. van de Weerdt] , who had a question about the cash flow from page 110, Koos was going to answer that one. If you look at what we're trying to do as the ING, we want to sustain our margin. Government bonds don't make you strike gold nowadays, our battle plan for last year was to issue more loans than bring in savings, to fund that by having fewer government bonds. What happened was that issuing more loans than bringing in savings, that yields a negative operating cash flow, that's funded by reducing the government bonds, that's exactly what we aim to do to sustain the company's overall margin and to keep those loans going.
That was part of our strategy to preserve the company margins. Finally, if you want the minutes, fill out one of the request forms outside, the definitive outcome of the vote will be posted online within a few days. Over to Mr. Hamers. Thank you, Jeroen. I'd like to highlight this last meeting chaired by Mr. Van der Veer. He joined our Supervisory Board at a time when it was not obvious for somebody with his experience to join ING Supervisory Board. That was in the middle of 2009, as a loyal shareholder, I'm sure you remember that period well. Even so, Mr. Van der Veer mentioned that he would be happy to join ING's ranks.
We have a lot grateful for, and we should acknowledge that, because especially given the chairman at the time, Peter Elverding, and then Mr. Van der Veer taking over 2 years later. I think that's been a very good transition from a bank insurance company to bank. After that, we launched the Think Forward strategy for the bank. Then one and a half years ago, we had vast latitude and support for accelerating that strategy. The obvious conclusion is that all the experience that Mr. Van der Veer brought on board the ING by giving us latitude and supporting us embodies our objective of enabling people to remain at the vanguard and to maintain a competitive company. I'd like to thank him on all our behalf. Thank you. Thank you.
It was a great privilege to do this for all these years, except for the past month. Now I'm going to conclude that meeting after welcoming Hans Wijers as the new chairman. Within one minute, I will step down. Hans, I wish you all the best in your new role. Thank you, Hans, for stepping into my shoes. Ladies and gentlemen, I'm closing the meeting. Thank you for coming. Enjoy a drink next door.
Good.
Quite a success.