* ING sees 500 mln euro Q3 loss
* Still assessing government capital injection plan
* Shares slump 27.5 percent to 13-year low
(Adds details, executive's, AFM comments)
By Gilbert Kreijger and Aaron Gray-Block
AMSTERDAM, Oct 17 Dutch bank ING ING.AS, the
Netherlands' biggest listed bank, said on Friday it expects its
first quarterly loss ever, hit by financial market turmoil and
falling asset prices, sending its shares to a 13-year low.
As the loss of confidence spread beyond shaky institutions
to banks previously considered well-capitalised, ING also said
its capital position is in line with targets despite the
turmoil in financial markets, which accelerated substantially
in the third quarter.
"ING's business model is sound and our commercial
performance is solid. However, that does not mean that we are
immune to the external environment," Chief Executive Michel
Tilmant said in a statement.
"The crisis is far-reaching, and even the healthiest
companies are feeling the negative effects."
ING said it expected to post a net loss of about 500
million euros ($674 million) for the third quarter, its first
quarterly loss since the group was formed in 1991. A spokesman
said ING would still post a profit of around 2.5 billion euros
for the first nine months of 2008.
ING's results had initially proven to be more resilient
through the credit crisis than many of its peers, such as
Belgian-Dutch rival Fortis FOR.BRFOR.AS, which was broken
up earlier this month, partly nationalised by the Dutch
government and partly sold off to French rival BNP Paribas
After speculation it would be a buyer of some of Fortis's
operations, ING said on Sept. 29 it would not make an offer for
Fortis's ABN AMRO's Dutch operations as the transaction would
not meet its financial requirements.
ING said on Friday third-quarter impairments on stocks and
bonds, losses attributable to financial counterparties and fair
value changes on property amounted to 1.6 billion euros. Loan
loss provisions at the bank increased to about 400 million
ING Bank's core tier-1 ratio, a measure of financial
strength, was at 6.5 percent and its tier-1 ratio was above
target at 8.5 percent at the end of the third quarter.
"There is no issue on the solvency. That was the most
important message to send out," said an analyst who did not
wish to be named.
ING shares initially trimmed losses but closed 27.5 percent
lower at 7.335 euros. Earlier in the day, the shares had
dropped on concerns about ING's capital position.
The Dutch stock markets regulator AFM said it had been in
contact with ING prior to its statement, but a spokesman for
the AFM declined to comment further.
ING said it will consider a Dutch government programme to
inject capital into healthy financial institutions once more
details are available.
"We know of course about the 20 billion programme and we
will always look at what the exact conditions are because if
there is recapitalisation taking place in the entire world, we
will also look at whether we want that as well," Chief Risk
Officer Koos Timmermans told state broadcaster NOS.
"But what we want to make clear today is that we don't have
an issue where you have to make repairs to your balance."
The Dutch government has set aside 20 billion euros ($27
billion) for capital injections into financial institutions and
is also prepared to guarantee interbank loans.
Larger financial stocks such as ING and Aegon (AEGN.AS) had
welcomed the government steps, but did not indicate whether
they planned to make use of the capital, while smaller firms
such as SNS Reaal SR.AS, Van Lanschot (VLAN.AS) and BinckBank
(BINCK.AS) said they did not need any government money.
Britain had earlier announced similar measures, and this
week British banks Royal Bank of Scotland (RBS.L), HBOS
HBOS.L and Lloyds TSB (LLOY.L) took the funding lifeline and
effectively became partially nationalised.
The finance ministry would not say on Friday whether it has
been in discussions with financial institutions over capital
ING operates the world's biggest online bank, ING Direct,
and said earlier this month it is acquiring more than 3 billion
pounds ($5.2 billion) worth of British deposits from troubled
Icelandic online savings providers Icesave and Kaupthing Edge
ING said the information it issued on Friday was
preliminary and final third-quarter results will be released on
(Editing by Jon Loades-Carter, Paul Bolding, Gary Hill)