ING rocked by new loss
DUTCH financial services group ING reported a worse-than-expected first-quarter net loss as its insurance operation suffered from impairments on its equity and property investments.
The group posted a net loss of €793m (£711m) for the three months, well below an analysts’ consensus of a €553m loss and a dramatic turnaround from last year’s €1.54bn profit in the same period.
However, the result was a marked improvement from the fourth quarter of 2008, in which the group suffered a net loss of €3.7bn.
The group’s insurance operations suffered an underlying pre-tax loss of €979m versus last year’s €690m profit, with revenue down 28 per cent at €1.28bn.
But banking operations performed well, making an underlying profit of €698m before tax, down from last year’s first quarter profit of €1.41bn.
The group, led by chief executive Jan Hommen, plans to raise up to €8bn through asset disposals and will also cut 7,000 jobs in a bid to reduce operating costs by €1bn this year.
“Our first priorities are to reduce costs, risk and leverage to strengthen the group. At the same time, we are working to reduce complexity by focusing on fewer businesses and markets,” said Hommen.
He added that the firm has seen “lots of interest” in the assets it has put up for sale but insisted that ING would not sell unless it was at the right price.
Hommen took over from previous chief executive Michael Tilmant in January.