People Moves
ING Loses CEO To Exhaustion, To Cut 7,000 Jobs
Dutch bank ING’s chief executive Michel Tilmant is resigning as a result of exhaustion, effective immediately. He will be replaced by the former Philips’ chair and head of the bank supervisory board Jan Hommen in April. Executive board member Eric Boyer takes over in the interim.
In a separate move, ING is to cut 7,000 jobs after posting a fourth-quarter loss of €3.3 billion (£3.1 billion).
The stress of steering the bank through the financial crisis has “really taken its toll” on Mr Tilmant, a spokesman told WealthBriefing. “He is greatly respected by all ING staff and has been responsible for the company’s growth into a major international bank since he joined in 2004. However, he feels now is the time to resign and allow someone with more energy to take over,” the spokesman said.
Peter Elverding,a member of the supervisory board, will succeed Mr Hommen in April.
The bank also said that the fourth-quarter loss of €3.3 billion would push the group to a full-year loss of about €400 million when the end of year figures are announced next month. The job cuts are part of cost-cutting measures and the spokesman could not confirm which units of the bank will be affected nor in which of the bank's 35 locations the jobs would be lost. However El País reports that ING jobs are safe in Spain.
The bank’s losses include €2 billion from its structured credit portfolio. It said that the last quarter saw marked deterioration in market conditions, making it "the worst quarter for equity and credit markets in over half a century. We see further trouble ahead and this is why job cuts are necessary,” the spokesman said.
In order to strengthen capital ratios, the Dutch Government is to provide 80 per cent of ING’s €27.7 billion of residential mortgage-backed securities in sub-prime mortgages.
In October, ING agreed to a €10 billion cash injection from the Dutch Government after the nationalisation of Fortis’s Dutch activities in the Netherlands, including ABN Amro, for €16.8 billion. The same month, it sold its Taiwanese insurance operation to a local insurance firm in a deal due to be finalized in the first quarter of 2009.