ING posts 478 million euro loss in 3Q

AMSTERDAM — Financial services company ING Groep NV reported a net loss of 478 million euros ($609 million) in the third quarter on Wednesday, after booking 1.51 billion euros worth of losses on devalued investments and assets.

The loss compares with profit of 2.31 billion euros in the same period a year ago, and was in line with expectations after the company issued a profit warning on Oct. 19.

ING, one of the 20 largest financial services groups globally, then received a 10 billion euro ($12.7 billion) investment lifeline from the Dutch government to shore up its cash reserves.

ING said Wednesday its underlying banking and insurance businesses were "generally sound" but it is facing increasing bad loans, falling investor demand for its products, lower fee income, and pressure on banking margins.

New life insurance sales were down 8.5 percent.

"We expect pressure on asset prices to continue to impact results in the fourth quarter, while weakening economic conditions will put pressure on results into 2009," chief executive Michel Tilmant said in a statement.

Shares fell 3.9 percent to close at 7.77 euros ($9.76) in Amsterdam Wednesday, and are down 71 percent since January.

The company's largest investment losses were on stocks, but it also booked sizable losses on real estate and mortgage-related investments and on bonds and other debt investments related to failed financial institutions such as the bankrupt U.S. investment bank Lehman Brothers.

The earnings "shows the enormous sensitivity of the group to the financial markets," said analyst Ton Gietman of Petercam Securities in a note on earnings. "It is highly likely that the fourth quarter will see more of the same."

He said the he would cut his profit estimates for the company for this year, but expects investment losses will taper off in 2009. He repeated a "buy" recommendation on the stock.

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