(20 February 2009 – Europe) A fourth quarter loss of EUR 3,101 million (A$6.1 billion) by Dutch banking and insurance company, ING Group, has turned a potentially profitable year into a full year loss of EUR 171 million (A$337 million).ING said that the underlying net loss was driven by market volatility and declining asset prices. Divestments and special items also lost the group EUR 611 million, bringing the quarterly net loss to EUR -3,711 million.
Despite the fourth quarter hit, the banking side of the business has remained profitable.
In the fourth quarter, banking underlying net loss was EUR 1,065 million, while insurance underlying net loss was nearly double that mark, at EUR 2,036 million.
The banking unit of the group managed a full year profit of EUR 722 million, meaning that the insurance unit saw losses of nearly four billion euros.
Jan Hommen, Chairman of the Supervisory Board and CEO-designate said that ING had started the year focused on growth, and was overtaken by the pace and severity of the downturn in the fourth quarter that eroded earnings and equity.
ING has turned its focus to strengthen capital in these challenging markets. ING Group received a A$20 billion cash injection last year and has recently sold its stakes in its Taiwan life business and Canadian non-life business.
Hommen said that he aims to shrink the balance sheet of ING Bank by 10 percent compared with the end of September 2008, while continuing to lend to key customers in ING’s home markets.
The financial crisis is set to reduce the reach of ING, with Hommen indicating that a review will be undertaken and that the group will reduce in complexity by focusing on fewer businesses and markets.