By Reed Stevenson
AMSTERDAM (Reuters) - Dutch financial group ING
Michel Tilmant will step down as Chief Executive, ING said, and will be replaced by Board Chairman Jan Hommen, former Chief Financial Officer of Dutch electronics group Philips
After what it said was the worst quarter for equity and credit markets in over half a century, ING said it would post an underlying loss of 3.3 billion euros for the fourth quarter, including 2 billion euros in losses from its structured credit portfolio.
ING also said it would cut 1 billion euros of 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.
In order to bolster its capital ratios, ING said the Dutch government would cover 80 percent of its 27.7 billion euros residential mortgage-backed securities (RMBS) in subprime mortgages, made to risky borrowers, and "Alt-A" loans, made to borrowers with a slightly better credit profile.
The Dutch government will take on the risk of the portfolio at a 10 percent discount to par value, and will receive 80 percent of cash generated from the portfolio.
Tilmant, CEO since 2004, will step down immediately and Hommen will formally take over for a four-year term once appointed by shareholders at a general meeting on April 27. Until then ING executive Eric Boyer will be acting CEO, the financial group said.
In October, ING agreed to a 10 billion euros cash injection from the Dutch government following the nationalization of Fortis's Dutch activities in the Netherlands, including ABN AMRO, for 16.8 billion euros.
The Dutch government had also set up a 200 billion euros state loan guarantee scheme in order to help extend credit. Earlier this month, it had convened a meeting of bank executives after indications that some banks had hesitated in tapping into the scheme.
($1=.7719 euros)
(Editing by David Holmes and Mike Nesbit)
