Dutch banking and insurance group ING said effects from the European debt crisis were worsening, and that serious consequences could arise from a disorderly Greek default.
ING, which experienced lower than that expected returns in 2011, warned that the troubles in Europe were beggining to affect the ‘real’ economy more, demonstrated by the company’s 21 per cent rise in loan loss provisions in the fourth quarter of last year.
Rival banks Credit Suisse and KBC also reported lower than expected results because of tough market conditions.
ING Chief Executive Jan Hommen stressed the need to fix the situation as quickly as possible.
“No one knew what was happening when Lehman (Brothers) fell. Nobody really knows what the consequences will be and that’s why I think it’s so dangerous to not have a good solution for this,” Hommen told reporters.
“It can have consequences for contagion and consequences that may be much more than direct. The indirect consequences could really be significant. Maybe we are directly not that exposed any longer, but indirectly we could be,” Hommen said.
ING last month scrapped plans to list their insurance and investment operations citing an uncertain economic outlook and volatile financial markets, and instead chose to explore other options for its Asian operations
The group said loan loss provisions rose to 530 million euros in the fourth quarter from 437 million euros in the preceding period.
It also took a 199 million euro hit on Greek government bonds, writing them down to market value, representing a total loss of 80 percent compared to nominal value.