ING asks for govt help as worries grow over 27.7 bln euro Alt A pile
27th Jan 09, 2:53pm
ING forecast a 3.3 billion euro loss for the fourth quarter and unveiled a plan overnight to get the Dutch government to insure 80% of a 27.7 billion portfolio of so-called Alt A mortgages in the United States. They are illiquid and widely viewed as the next area of toxic debt to report massive defaults. ING's CEO also resigned and the bank said it would cut 7,000 jobs to save a 1 billion euros. ING announced it would also review non-core businesses and had identified several businesses that it would try to sell. ING did not identify the non-core businesses for sale. ING owns 51% of ING New Zealand, while ANZ owns the other 49%. The operation is struggling after two of its major funds were frozen and have since evaporated under a pile of toxic debt. ANZ may be forced to buy out ING if ING puts it up for sale, although it cannot be worth much at this stage given the extent of the funds outflow from ING in the last year. As part of the government rescue plan, ING agreed to proactively lend 25 billion euros to Dutch businesses and consumers and said it would not pay bonuses this year. Dutch government appointees to the board will also be consulted before new executive appointments are made. Here is the full ING release. and here is the page with all the presentations. "In the current environment we will continue to streamline the organisation to focus on the businesses and geographies where ING has a strong and sustainable position in savings and investments," ING said. * This article was first published in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.