The Dutch government will buy a new class of securities that count towards INGâ??s core Tier 1 capital but have no voting rights and are not dilutive for ordinary shareholders, ING said on Sunday. The group will also scrap its final dividend for 2008, and the executive board will take no bonuses â?? either in cash or shares â?? this year. The government will take two of the 12 supervisory board seats.
ING also announced on Monday that it had agreed to sell its Taiwan life insurance unit to Fubon Financial for $600m.
The â?¬10bn injection will boost INGâ??s Tier 1 capital, which stood at 6.5 per cent at the end of September to 8 per cent. It will also reduce the groupâ??s debt-to-equity ratio from 15 to 10 per cent.
Michel Tilmant, ING chief executive, insisted his company met regulatory requirements last week, but the market had come to expect much higher levels following state recapitalisations of banks around the world.
The new class of securities will pay a fixed 8.5 per cent annual coupon, with a step-up guarantee to match dividends on ordinary shares, and can be bought back at any time for 150 per cent of their issue price. ING also has the option to convert them into ordinary shares after three years.
