ING receives 10bn euros capital injection
ING, which is one of the world's largest banks, is to receive a €10 billion cash injection from the Government. The bank, which has 85 million customers worldwide, is the latest bank to be hit by the global credit crisis.
The bank recently took over 180,000 accounts from collapsed Icelandic banks Kaupthing Singer & Friedlander and Heritable Bank. It also took over the failed UK investment bank Barings in the 1990s.
As a result of the cash injection, the Government will receive preference shares in ING, the shares will pay the Government interest of 8.5% annually. The funds will push up its Tier 1 capital ratio from 6.5% to around 8%.
ING has over one million savers in the UK and has grown strongly following its attractive savings products. It has often appeared in best-buy tables.
ING has been the first Dutch bank to apply for help after the Government announced recently it had put aside €20 billion to support Netherlands banks if necessary.
The bank is scrapping its dividend payout to shareholders, while top executives have agreed to forfeit their annual bonuses and restrict their pay-offs to a maximum of 12 months salary.
Source: Financemarkets
Date: 20.10.2008 [ID: 201]