Writedown drives ING to £7bn loss

ING, Europe's biggest insurer, stunned investors yesterday by posting a net loss of €9.6bn (£6.93bn) for 2002 under US accounting standards after a huge goodwill charge, knocking its shares.

ING said it was writing down €13.1bn euros after tax on the goodwill of several acquisitions made in the last few years. The move sent it deep into the red and came after it last month posted a €4.3bn net profit under Dutch accounting principles.

ING described the move as an accounting change and said its profit under Dutch rules would not be affected. But its shares slipped, with investors already nervous that several major European insurers might be about to unveil massive rights issues to relieve their stretched balance sheets.

Analysts said the size of ING's goodwill write-down made it look as though the bancassurance giant had overpaid for its two main recent acquisitions – US insurers Aetna and Reliastar – and called into question their future profitability. ING bought Aetna and Reliastar for $13.8bn in summer 2000 - a move which made it one of the top 10 global asset managers. The Dutch group attributed the write down in their value to the falls in global stock markets in the last three years.

ING had to publish a "reconciliation" of its results under US GAAP, American accounting rules, because it is listed in New York as well as in Amsterdam.