March 31, 2014 / 10:51 AM / 4 years ago

UPDATE 1-Dutch group ING repays a further $1.7 bln to state

(Adds outstanding loan amount, details about dividend resumption)

AMSTERDAM, March 31 (Reuters) - Dutch financial services group ING has repaid a further 1.23 billion euros ($1.68 billion) of aid to the Dutch state, it said on Monday.

The payment takes the total amount returned to the state to 12.5 billion euros, ING said, including 9.3 billion euros in principal and 3.2 billion euros in interest.

ING dismantled its once-fashionable banking and insurance model and announced thousands of job cuts and other savings after its 10 billion euro state rescue in 2008, at the height of the global financial crisis.

ING shares were upgraded on Monday morning by Goldman Sachs to “buy” from “neutral”. The stock was up 2.7 percent in late morning trading in Amsterdam at 10.27 euros.

The payment was funded by a dividend from ING Bank to ING Group and reduced the bank’s Core Tier 1 capital adequacy ratio by approximately 0.4 percentage points.

A final fourth payment of 1.025 billion euros ($1.41 billion) will be made May 2015, including EUR 683 million in principal and EUR 342 million in interest and premiums, taking the total amount to 13.5 billion euros.

Once the final debt repayment has been made ING will resume dividend payments, spokesman Frans Middendorff said. ($1 = 0.7271 euros) (Reporting by Anthony Deutsch; Editing by Mark Potter)

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