ING became the latest European bank to seek government funding, agreeing to a €10 billion cash injection as well as scrapping executive bonuses and its year-end dividend.
Following a weekend of intense negotiations after seeing its share price sliced by over a quarter in the latest trading session and the partial nationalisation of rival Fortis two weeks ago, ING sought help to shore up its core capital and restore investor confidence.
As governments around the world pour in billions of dollars of state cash to help stabilise their banks, the Dutch government has set aside €20 billion to pump capital into its financial institutions.
Several British and Swiss banks tapped similar government funding lifelines in the past week.
Most of the smaller listed Dutch financial companies have indicated that they did not plan to ask for capital support, but ING and insurer Aegon had only said they were looking at the government offer.
"The market environment has changed over the last two weeks and the expectations for capital levels have changed following massive capital injections in financial institutions worldwide," ING Chief Executive Michel Tilmant said.
"We have accepted the consequences of this situation and welcome the support of the Dutch state," he told an news conference yesterday, flanked by Dutch Finance Minister Wouter Bos and central bank president Nout Wellink.
Reuters