October 19, 2008 / 11:12 AM / 11 years ago

ING agrees to strengthen core capital

A man cleans the windows of a ING branch in central Madrid April 14, 2008. REUTERS/Andrea Comas

AMSTERDAM (Reuters) - Dutch financial group ING has agreed to strengthen its core capital under an agreement with the Dutch finance ministry and the central bank, they said on Sunday.

Details will be given at a news conference at 1800 GMT by Finance Minister Wouter Bos, central bank governor Nout Wellink and ING Chief Executive Michel Tilmant, ING and the finance ministry said.

The Netherlands’ biggest listed bank, which said on Friday that it was about to announce its first-ever quarterly loss in the third quarter, was considering several options to shore up its capital position, including taking government money.

The Sunday Times reported earlier that a state-backed cash injection into ING could be worth up to 9 billion euros ($12.1 billion). ING has a market value of 15.3 billion euros based on Friday’s closing price, when its shares fell 27.5 percent.

As governments around the world have waded in with billions of dollars of state cash to help stabilize their banks, the Dutch government has set aside 20 billion euros to pump capital into its financial institutions.

ING said on Friday 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. That sent its shares to a 13-year low.

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, which was broken up earlier this month, partly nationalized by the Dutch government and partly sold off to French rival BNP Paribas.

If ING were to make use of the Dutch government program, it would follow similar steps taken by several British and Swiss banks this week that also tapped emergency funding lifelines from their respective governments.

Reporting by Gilbert Kreijger, Niclas Mika, Will Waterman and Catherine Hornby

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