ING shares fall sharply, company unveils losses

AMSTERDAM, Netherlands (AP) - ING Groep NV abruptly reported losses in the third quarter on Friday, in response to a sharp drop in its share price as rumors swirled that it is facing a shortage of capital.

The bank and insurance company said it expects a net loss of around euro500 million (US$670 million) for the quarter, due to euro2 billion (US$2.68 billion) in various investment losses, write-downs and provisions for bad loans.

Last year it reported net profit of euro2.31 billion in the third quarter.

The company's shares recovered from even sharper falls before the news was released and closed down 24 percent at euro7.70 (US$10.31).

In March, ING was ranked among the top 20 financial services companies globally in terms of market capitalization, but its stock has lost nearly three-quarters of its value since then.

"Current developments in financial markets are unprecedented,'' said Chief Executive Michel Tilmant in a statement.

"Even the healthiest companies are feeling the negative effects.''

Tilmant did not directly address the question of whether ING needs to raise capital.

In its statement the company said that, as of Sept. 30, its banking operations are within target solvency ratios and it retains a low risk "AA'' credit rating.

However, it also noted the Dutch government has earmarked euro20 billion (US$27 billion) to assist any financial companies in trouble.

A spokeswoman declined to comment on whether the company will seek to tap government money this weekend.

The Netherlands has not specified how that money would be made available, but the country's finance minister said terms would be strict and receiving it would be conditional on executive bonuses being curtailed.

"The merits of the government program will be considered once the details are available,'' ING said.

The company repeated that its earnings will be released on Nov. 12 as scheduled and information released Friday is preliminary.

Source: The Star 18.10.2008