Dutch financial group ING posted its first-ever quarterly loss on Wednesday as impairments on stocks and bonds, counterparty losses and property writedowns ate into its income.
ING Group NV had projected the loss in October before agreeing to a €10 billion ($12.7 billion) cash injection by the Dutch government to shore up its core capital. Those measures will put ING’s core Tier 1 capital ratio at 8%. Its net loss for the Q3 was €478 million, after writedowns totaling €1.5 billion.
ING posted a profit of €2.3 billion a year earlier. “Weakening economic conditions will put pressure on results into 2009,” ING CEO Michel Tilmant said in a statement. A revaluation of structured credit investments linked to mortgages also triggered a €1.6 billion drop in ING shareholders’ equity.
ING was one of the healthier financial institutions with relatively manageable losses from the credit crisis, but it decided to take the capital injection to shore up its balance sheet after its share plummeted to a 15 year-low on investor concerns over the impact of the credit crisis. Its shares have since recovered 54% to just above €8 but remain well below levels close to €30 seen a year ago. (Reuters)