Dutch banking and insurance group ING yesterday announced it plans to cut 7,000 jobs and that chief executive Michel Tilmant is to step down.
ING, in a statement, said the cuts should save 1 billion euros (US$1.287 billion). The financial giant is expecting a loss of 0.4 billion euros for last year.
The group’s banking division retained a net profit of 0.5 billion euros but its insurance division is expected to post a 0.9 billion euro loss, according to the statement.
ING also announced it would make use of the Dutch government guarantees for its so-called Alt-A mortgage division which deals with all its US mortgages. The Dutch government guarantees the mortgages for 80 percent.
In a separate statement, ING announced that Tilmant stepped down “in light of the extraordinary developments over the past few months and given his personal condition.”
ING board member Eric Boyer is to serve as acting CEO until the next annual shareholders meeting scheduled for April 27, ING said.
Tilmant would retain an advisory position until his retirement on Aug. 1.
ING said it hoped to receive shareholders’ approval at the April meeting for the appointment of Jan Hommen, previously chairman of ING’s supervisory board, as its new CEO.
On Oct. 19, ING Group became the second Dutch bank after Fortis, which also comprises ABN Amro, to receive government support.
The central bank at the time emphasized ING was a “strong and healthy bank.”
ING shares have however dropped substantially from almost 22 euros in September to 5.276 euros on Friday, not recovering either after receiving the 10 billion euros in government support in October.
The International Netherlands Group (ING) is a 1992 merger of several Dutch banks and insurance companies. It is active in banking, insurance and asset management, with more than 75 million customers worldwide.