Dutch insurer ING, which has major operations in the Hartford area, said today it will take a 2008 loss of $4.3 billion, tap into 22 billion euros of Dutch state loan guarantees for its troubled loan portfolio and cut 7,000 jobs, Reuters reported today.
Michel Tilmant will step down as chief executive and retire Aug. 1, the Amsterdam-based company said, and will be replaced by board Chairman Jan Hommen, 65, former chief financial officer of Dutch electronics group Philips NV.
ING announced earlier this month plans to cut 750 U.S. jobs, including 96 in the Hartford area. It was not immediately clear whether today’s announcement means more Hartford job cuts are looming.
ING also said the Netherlands government has agreed to assume most of the risk on $35.8 billion in U.S. residential mortgage-backed securities. Last October, the company received a $13.0 billion bailout from the Dutch government.
At 11 a.m., ING’s U.S. shares traded at $8.73, up $1.69, or 24 percent.
“It’s just a major relief,” said Theodoor Gilissen analyst Paul Beijsens. “At the moment we can’t predict whether the market will get worse. ING may need more help, but at this point they addressed a major risk.”
After what it said was the worst quarter for equity and credit markets in more than half a century, ING said it would post an underlying loss of $4.3 billion for the fourth quarter.
ING said it would look into making divestments outside its core business, but declined to say what or how much it planned to sell.
ING also said it would cut costs in 2009, by scrapping 7,000 jobs out of a total of about 130,000 worldwide.
In addition to other cost-cutting measures, such as reducing head office spending, ING said it had decided not to launch its ING Direct banking service in Japan, a project it had planned to launch in 2008 pending regulatory approval.
It also said it would re-evaluate its sponsorship of the Renault Formula One racing team. (AP)
