* CEO sees no improvement in bad loan provisions
* Shares up 2.9 pct in line with other bank stocks
(Adds CEO comment, background)
AMSTERDAM Jan 7 Dutch banking and insurance
group ING said it may need to cut more costs to cope
with new regulations and high provisions for bad loans,
highlighting the pressures on banks to shrink their businesses.
Banks globally are facing higher capital requirements to
satisfy regulators at a time when a weak economy is reducing
demand for investment banking and credit services, forcing them
to reduce costs by cutting operations and jobs.
Deutsche Bank in September announced a plan to
cut bonuses, axe more jobs and sell assets to meet tougher
capital rules, while Swiss bank UBS is cutting 10,000
jobs as it winds down its fixed-income division.
Nomura Holdings Inc, Japan's biggest brokerage,
will make cuts in its equities and investment banking
businesses, with its loss-making European operations taking the
ING, which is dismantling its banking and insurance model
after needing 10 billion euros ($13 billion) of state aid in
2008, said on Monday the weak economy would continue to have an
impact on operations.
"Risk costs for the bank have been increasing amid the
economic downturn, and we don't foresee an immediate
improvement," Chief Executive Jan Hommen said in a New Year's
speech to his employees.
Risk costs are provisions for loans that are not expected to
be repaid or not repaid fully because borrowers are in financial
trouble or are going bankrupt.
"While we have initiated steps to reduce expenses, we are
also confronted with headwinds including higher regulatory costs
and the Dutch bank tax, and we must continue to align our cost
structure to a leaner operating environment," Hommen said.
In November, ING announced a second round of job cuts, axing
2,350 mostly European jobs. That followed a plan in 2011 to cut
2,700 Dutch jobs to cope with deteriorating markets.
ING employed 86,881 people at the end of
ING shares were up 2.9 percent at 7.60 euros by 1010 GMT, in
line with increases in the share prices of other European banks
after regulators eased global bank liquidity rules to enable
lenders to issue more credit to help struggling economies grow.
($1 = 0.7666 euros)
(Reporting by Gilbert Kreijger; Editing by Erica Billingham)