ING sees Q3 loss, shares drop 27 percent

AMSTERDAM (Reuters) - Dutch ING expects a 500 million euro ($674 million) loss in the third quarter due to write-downs and said its capital position was in line with targets, sending its shares down more than 27 percent.

ING said in a statement on Friday that third-quarter impairments on stocks and bonds, financial counterparties and fair value changes on property were 1.6 billion euros. Loan loss provisioning at the bank increased to about 400 million euros.

ING Bank's core tier-1 ratio, a measure of a bank's financial strength, was at 6.5 percent and its tier-1 ratio was above target at 8.5 percent at the end of the third quarter, it said.

"There is no issue on the solvency. That was the most important message to send out," said an analyst who did not wish to be named.

ING said it will study a Dutch government program to inject capital into financial institutions.

"ING will continue to take a prudent and disciplined approach in the interests of its shareholders. The merits of the government program will be considered once the details are available," ING said.

ING shares initially trimmed losses but closed 27.5 percent lower at 7.335 euros. The DJ Stoxx European insurance index <.SXIP> was down 2.9 percent.

The Dutch government has set aside 20 billion euros ($27 billion) for capital injections into financial institutions and is also prepared to guarantee interbank loans.

The finance ministry would not say on Friday whether it has been in discussions with financial institutions over such assistance.

ING's Belgian-Dutch rival Fortis was broken up earlier this month, partly nationalized by the Dutch government and partly sold off to French rival BNP Paribas as some Fortis clients and counterparty banks pulled their money from the bank.

(Additional reporting by Aaron Gray-Block in Amsterdam; Editing by Jon Loades-Carter)

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