View this article online: https://www.insurancejournal.com/news/international/2009/01/26/97254.htm
Dutch financial and insurance group ING will take a 2008 loss of €1 billion ($1.294 billion) and will tap into a Dutch state guarantee for its troubled loan portfolio, it said on Monday, adding that its Chief Executive Michel Tilmant will step down.
After what it said was worst quarter for equity and credit markets in over half a century, ING said it would post an underlying loss of €3.3 billion ($4.27 billion) for the fourth quarter, including €2 billion ($2.588 billion) in losses from its structured credit portfolio.
It will also cut 7,000 jobs out of a total of about 130,000 worldwide.
In order to bolster its capital ratios, ING said the Dutch government would cover 80 percent of its €27.7 billion ($35.85 billion) residential mortgage-backed securities (RMBS) in subprime mortgages, made to risky borrowers, and “Alt-A” loans, made to borrowers with a slightly better credit profile.
The Dutch government will take on the risk of the portfolio at a 10 percent discount to par value, and will receive 80 percent of cash generated from the portfolio.
ING also said Michel Tilmant, Chief Executive since 2004, would step down and would be replaced by board chairman Jan Hommen.
Hommen, who was chief financial officer of Dutch electronics maker Philips until he joined ING’s board in 2005, will be appointed after an April 27 shareholders meeting, ING said.
In October, ING agreed to a €10 billion ($12.94 billion) cash injection from the Dutch government.
(Editing by David Holmes)
By Reed Stevenson
AMSTERDAM, Jan 26 (Reuters) –