Wednesday, February 20, 2008
Dutch financial institution ING Group reported today in its quarterly results an impairment charge of €194 million euros (approximately US$285.6 million). However, as a result of selling an equity stake in rival ABN AMRO, the net profit of €2.48 billion, was 18% higher than last year.
The impairment charge is a result of risky investments, including RBMS (mortgage) investments backed by subprime loans and Alt-A loans, which are made to borrowers with a slightly better credit profile than those in the subprime category, as well as from collateral debt obligations (CDOs).
CEO Michel Tilmant said that “solid risk management” shields ING from the worst effects of the financial crisis. “ING’s exposure to the riskiest assets is limited, and the RMBS investments we selected have a high level of structural credit protection to absorb significant losses as the U.S. housing crisis deepens,” added Tilmant.