ING Group will receive a €10 billion (approximately A$20 billion) capital injection from the Dutch Government.
The banking and insurance group said the measure did not indicate any problems, but was intended as a buffer to navigate the current market and economic environment."We feel... it is prudent to raise our core capital, to reinforce our strong competitive position in this changing landscape," ING chief executive Michel Tilmant said.
The money is coming from a €20 billion government fund intended to help sound financial enterprises absorb external shocks. The Government will receive 1 billion securities, which have a status similar to stocks but will not dilute the share price.
"With this capital reinforcement, ING, a healthy and well-managed enterprise, has robust financial resilience," the Dutch Government said in a statement.
The group also announced it would not pay out dividends over the second half of 2008, and the group's executive board will hand in their performance bonuses over 2008.
In Australia, ING Group operates the joint venture ING Australia (with ANZ), in which the Dutch group owns a majority stake of 51 per cent.
ING Australia, which has $45 billion in assets under management, said yesterday it was business as usual.
"If you look at the context of what is happening in Europe, it is no different than what the UK Government did to all of its eight major banks, it's no different to what the US did to all nine of its major banks," a spokesperson for ING said.
"[They are] injecting capital into those banks to free them up for credit."
