(Adds Taiwan deal, ING CFO, asset manager comments)
AMSTERDAM/TAIPEI Oct 20 The Dutch government
has agreed a 10 billion euro ($13.5 billion) cash injection into
financial group ING ING.AS, and ING shares are expected to
rally on Monday after a 27.5 percent slump in the previous
ING sought government help to shore up its core capital and
restore investor confidence after a weekend of intense
negotiations and following the partial nationalisation of rival
Fortis FOR.BR two weeks ago. [ID:nLJ78025]
ING has also agreed to sell its Taiwan life insurance unit
to Fubon Financial (2881.TW) for $600 million, it said on
"We are in a large financial storm, and the storm has been
building in recent weeks. We wanted to make sure we had a
buffer, a buffer large enough to carry us through the storm,"
ING Chief Financial Officer John Hele told CNBC.
"Our shareholders and customers, all our stakeholders don't
have to worry about ING group."
A first indication on how shareholders receive the cash
infusion will be ING's market valuation, which fell to 15.3
billion euros on Friday after the group said it would post a 500
million euro net loss in the third quarter, hit by the credit
"The deal is better than expected. I expect that the stock
will go up this morning. A share issue would have been much
worse and would not have been possible in the current market,"
said Fred Huibers, asset manager at Haags Effectenkantoor, who
holds ING shares.
Huibers estimated ING shares would rise 15 to 18 percent at
Other market participants also expected ING shares to rise.
"The capital injection can be positive for ING. Shareholders
aren't sidelined this time," asset manager Rob Koenders at
Harmony Vermogensbeheer said.
ING is due to give further comment on the government cash
infusion and the Fubon deal in a conference call at 0900 GMT.
The Dutch state will have a position similar to common
shareholders and the deal is designed not to dilute shareholder
ING shares hit a 13-year low at 7.335 euros on Friday after
dropping three consecutive trading days. The shares have fallen
73 percent since the start of the year, compared with a 48
percent drop of the DJ Stoxx European insurance index .SXIP.
As governments around the world pour in billions of dollars
of state cash to help stabilise their banks, the Dutch
government has set aside 20 billion euros to pump capital into
its financial institutions. Several British and Swiss banks
tapped similar government funding lifelines in the past week.
Most of the smaller listed Dutch financial companies have
indicated that they did not plan to ask for capital support, but
ING and insurer Aegon (AEGN.AS) had only said they were looking
at the government offer.
Together with the 16.8 billion euros for the partial
nationalisation of Fortis, the Dutch government has already
spent nearly 5 percent of the country's gross domestic product
to help banks.
(Reporting by Niclas Mika and Gilbert Kreijger in Amsterdam,
and Faith Hung and Yvette Chan in Taipei; Editing by Quentin