ING gets €10bn capital injection from state

Monday 20 October 2008

ING shares rose 20% in early trading in Amsterdam on Monday following the announcement that the financial services group is to get a €10bn capital injection from the Dutch government.

In return the government will get the equivalent of €10bn worth of shares in ING (based on the company's value on Thursday evening) and will be able to appoint two members of its supervisory board. These will have the right of veto on important decisions.

The deal also means that ING executives will not receive their 2008 bonuses.

The move was widely expected following a statement from ING on Friday that it will book a €500m loss in the third quarter of this year.

ING is the first Dutch financial institution to get a capital injection from the government's €20bn aid fund set up on October 9 to help fundamentally healthy firms. Fortis and ABN Amro were fully nationalised on October 3.

ING is a healthy financial institution, finance minister Wouter Bos said. 'But the situation in the market is so unpredictable at this point... and the expectations of the market are such that it is in the interests of ING to strengthen its capital by €10bn.'

ING's share price plunged 27% to €7.34 on Friday, forcing the company to publish preliminary third quarter results.

© DutchNews.nl

Comments have been closed for this article.