ING in the red after state aid payments

DUTCH bancassurance group ING yesterday blamed hefty state aid repayments enforced by the European Commission for pushing it heavily into the red over the fourth quarter, as it unveiled a wide-ranging pay review for its executive staff.

ING, which is required to sell or spin off its insurance business by the end of 2013 under a deal struck with the EC, said it made a net loss of €712m (£618m) for the fourth quarter of 2009, over double the amount forecast by analysts. Over the full year, the group made a loss of €935m, after paying back €5bn in state aid plus penalties.

ING’s bank operations swung into the black over the last quarter of the year despite a 19 per cent rise in loan loss provisions to €686m, posting an underlying pre-tax profit of €132m.

But the insurance arm made an underlying pre-tax loss of €47m, down from a loss of €2.5bn in the fourth quarter of 2008.

ING said its 2009 bonus pool was 57.6 per cent higher than in 2008, reflecting improved performance. Staff will receive €330m in cash bonuses, the same as in 2008, but will also be paid €190m in deferred equity awards.

It also unveiled a provisional new remuneration policy for the management team, who did not receive any bonuses in 2008 or 2009.

Under the new policy, board-level bonuses will be curbed at a maximum of 100 per cent of fixed pay, with chief executive Jan Hommen’s 2010 salary pegged at €1.35m.