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.