ING near record low on report on interest payments
AMSTERDAM (Reuters) - Shares in ING (ING.AS) fell near a 16-year low on Friday on concern the Dutch bank and insurer might miss interest payments on certain bonds, and ING said it would divulge any deferred payments promptly.
Paul Beijsens, analyst at Theodoor Gilissen, pointed to comments in Dutch daily Het Financieele Dagblad in which the smaller Dutch Kas Bank (KASNc.AS) said it expected ING to miss coupon payments on its hybrid tier 1 obligations.
"A lot of investors are just getting anxious and are walking away from the stock," he said.
ING shares touched an intra-day low at 3.84 euros, close to its all-time low of 3.80 euros in September 1992, and closed down 12.4 percent at 4.04 euros. The DJ Stoxx European insurers index .SXIP fell 6.3 percent.
ING (ING.N), which got a 10 billion euro ($12.6 billion) capital injection from the Dutch state last October, said it would inform the market immediately if it would forgo interest payments.
"We have not done so at this moment," said a spokeswoman for ING, which wants to cut risks by leaving some markets and businesses to cope with the credit crisis after booking a 3.7 billion euro fourth-quarter loss on Wednesday.
ING, which sold its 70 percent stake in insurer ING Canada IIC.TO earlier this month, wants to focus on pension and investment products.
Fortis Bank analyst Klaas Kruijer said ING was facing a strategic issue. "It is working hard on it, but the market is waiting for it," said Kruijer.
Beijsens said concerns about ING's strategy and talk of a nationalization were exaggerated and the share fall was also related to problems in eastern Europe, where ING gets 5 percent of its revenue, and that many insurers stocks fell.
"AXA (AXAF.PA) lost 18 percent, Allianz (ALVG.DE) 9 percent. Minus 12 for ING is not that strange," said Beijsens, adding that it was right for ING to trim its business model to cope with the credit crisis and global economic slump.
The Dutch Finance Ministry, which also granted ING guarantees on 22 billion euros of risky U.S. credit assets last month, did not see a need to help ING again and a ministry spokeswoman said ING was healthy.
ING issued 4 billion euros in state-guaranteed bonds earlier on Friday, as part of a plan announced earlier to raise a maximum of 10 billion euros.