money

LONDON, May 23 — The US Treasury is re-looking at plans to float the Asian unit of AIG in case a bid by Prudential to buy the AIA fails, two British newspapers reported today.

BEIJING, May 23 — China and the United States should strengthen economic stability and policy coordination to combat risks to global recovery from Europe’s debt troubles, the Chinese Finance Minister Xie Xuren said.

BEIJING, March 5 — China will seek to heal social rifts and spur home-driven growth with more public welfare and rural spending even as the government tightens its belt after a burst of feverish spending, Premier Wen Jiabao said today.

Wen told the country’s parliament that China’s economy faced a clouded international outlook in 2010 and would stick to a steady policy course this year, shifting tack if needed to counter the lingering impact of the global credit crunch.

China would maintain an appropriately easy monetary stance and an active fiscal policy, he added, showing no sign of a break from current settings.

Wen also signalled continued caution towards the yuan, reiterating standard language that Beijing would seek to keep the currency basically steady at a reasonable and balanced level.

To the dismay of Washington and Brussels, China has frozen the yuan’s exchange rate at around 6.83 per dollar since mid-2008 to preserve the international competitiveness of its exporters.

In his annual “State of the Union”-style report to the National People’s Congress, Wen unveiled increases in spending for China’s poorer citizens and 700-million strong farming population that outstripped the planned rise in military outlays.

China wants to slow spending and bank lending after pumping out cash to counter the global downturn, but Wen said improvements in social welfare, healthcare and rural services were needed to secure the nation’s economic health and the ruling Communist Party’s hold over an increasingly fractured society.

“We can ensure that there is sustained impetus for economic development, a solid foundation for social progress, and lasting stability for the country only by working hard to ensure and improve people’s well-being,” Wen told the nearly 3,000 delegates of the Communist Party-controlled legislature.

China escaped the worst of the global slump by ramping up credit, slashing interest rates and launching a 4 trillion yuan (RM2 billion) infrastructure programme in late 2008.

The economy grew 8.7 per cent last year as a result, by far the fastest pace of any major country, but Wen played down the achievement.

More domestically-driven growth, fuelled by consumers more confident about their health, incomes and welfare protection, was needed to keep the world’s third-biggest economy growing at a solid pace, he said.

“We must not interpret the economic turnaround as a fundamental improvement in the economic situation,” Wen said in the cavernous Great Hall of the People.

“There are insufficient internal drivers of economic growth,” he added, reading aloud the 36-page report in a practiced, steady voice, occasionally pausing for effect and applause.

Wen said China was targeting 8 per cent growth in gross domestic product — the goal it traditionally sets every year — and an inflation rate of about 3 per cent.

Wen announced increases of 8.8 per cent on social spending and 12.8 per cent on rural outlays — more than the rise of 7.5 per cent in the military budget — to narrow the yawning wealth gap that economists blame for dampening domestic consumption.

China’s parliament is a party-run spectacle that affirms policy, rather than making or challenging it.

But the gathering offers an opportunity for the party leadership to sell their policies, which face growing doubts from wealthier taxpayers and from local officials who see little wrong with the country’s traditional recipe of industrial growth.

“We will continue to give preference to agriculture, farmers and rural areas, and to improving people’s well-being and developing social programmes,” said Wen, whose second and final five-year term running the Chinese government ends in 2013.

Still, the projected growth in welfare and agriculture spending is much slower than in 2009 when the financial crisis was raging.

Reflecting the conservatism of China’s financial planners, the budget deficit will again be kept below 3 per cent of national income, Wen said.

Last year the deficit was just 2.2 per cent of GDP despite massive government spending on infrastructure and job creation. — Reuters

SINGAPORE, March 5 — Singapore’s biggest sovereign wealth fund GIC and Qatar Holding LLC have committed to underwrite a significant portion of UK Prudential’s US$20 billion (RM68 billion) rights issue.

GIC is an existing shareholder, with a 0.5 per cent stake in Prudential, but Qatar does not appear to rank as an existing investor, signalling that the British insurer is inviting new investors to make the deal a success.

GIC’s potential investment comes amid news that it may be sitting on a paper loss of about US$5 billion on its investment in UBS following the conversion of its mandatory notes into shares.

It also shows how sovereign wealth funds are getting more active in global dealmaking after they turned cautious last year when they were burnt by early investments in Western banks such as Citigroup.

“The joint global co-ordinators have confirmed that syndication since the announcement has been very well received, with demand for primary underwriting well in excess of the size of the rights issue,” Prudential said in a regulatory filing in London.

Credit Suisse, HSBC and J.P. Morgan Cazenove are acting as joint global co-ordinators and joint bookrunners, it said.

Prudential said it has enlisted over 30 global and Asian banks as joint lead managers, co-lead managers and co-managers for the fund raising that will be used to finance its US$35.5 billion acquisition of AIG’s Asian unit.

In what is the insurance industry’s biggest acquisition, Prudential is buying American International Assurance in a big bet on soaring demand in Asia for personal financial services. AIA is regarded as AIG’s crown jewel because of its size, cash generation and presence in fast-growth Asia.

The latest announcement came when chief executives of Prudential CEO Tidjane Thiam and his AIG counterpart Robert Benmosche are leading a series of “town hall” meetings across Asia that aim to allay concerns among staff of both companies. [

The CEOs are reiterating they plan to keep the businesses and brands separate, with overlap mainly in back- and middle-office operations, according to people who attended the meetings.

The chief executives met employees in Malaysia and Singapore yesterday and are expected to visit Thailand today.

AIA serves more than 20 million customers in Asia. Prudential has more than 11 million life insurance customers in the region.

The deal, which AIG chose over a planned AIA initial public offering in Hong Kong, would help the bailed-out US group repay a big chunk of its taxpayer debt.

The banks that joined the syndicate are Banca IMI, Banco Santander, BofA Merrill Lynch, Citigroup, Deutsche Bank, ING Bank N.V., Morgan Stanley, RBS Hoare Govett and UBS Investment Bank as joint lead managers.

Barclays Capital, BNP Paribas, Credit Agricole CIB, Mediobanca, Natixis, Nomura International, Scotia Capital, Societe Generale, Standard Chartered, UniCredit Bank AG and United Overseas Bank are co-lead managers.

BBVA, BOC International, Commerzbank, DBS Bank, Fortis Bank Nederland, ICBC International Securities, Keefe, Bruyette & Woods, Lloyds TSB Corporate Markets, Macquarie Capital and RBC Capital Markets as co-managers. — Reuters

A MRT train travels along a track in a neighbourhood in Singapore which expects to see more tourist arrivals this year. — Reuters pic

SINGAPORE, March 5 — Visitor arrivals in Singapore are expected to rise 20-30 per cent to 11.5-12.5 million this year, helped by a pickup in the global economy and the draw of the city-state’s new casinos, the government said today.

Singapore Tourism Board (STB) CEO Aw Kah Peng told a tourism industry conference she expects tourism revenue to rise 41-50 per cent from 2009 to S$17.5-S$18.5 billion.

“This is hugely, hugely ambitious,” she acknowledged, but said she was hoping the final result could outperform the forecast.

In January, Singapore saw a 17.6 per cent rise in visitor arrivals from a year earlier. — Reuters

PUTRAJAYA, Feb 26 – Production and operations costs of most of the industries in Malaysia can be adduced as “artificial cost” as a big chunk of the cost element is the subsidy borne by the government, according to experts.

Actually, manufacturers should feel “embarrassed” when announcing that they have made a profit when the reality is that a major portion of their costs had been absorbed by the government. They should be ashamed if they lose money even with the government subsidies.

Take gas, for instance. A good number of industries are now switching to gas to power their manufacturing processes due to the lower price of gas (compared with diesel) while both fuels are subsidised by the government. The only difference is the amount of total subsidy.

The subsidised gas price for the power sector is RM10.70 for per Million British Thermal Unit (MMbtu), heavy consumers RM15.35 per MMbtu and Gas Malaysia Sdn Bhd RM11.05 per MMbtu. Unsubsidised price or current market price for gas for the energy sector is RM41.16 per MMbtu, heavy consumers RM56.20 per MMbtu and Gas Malaysia RM42.35 per MMbtu.

Subsidised diesel price for public transport and fishermen is RM38.65 per MMbtu or RM1.43 a litre and pump price RM45.95 per MMbtu or RM1.70 a litre. Market price for diesel is RM55 per MMbtu.

Looking at the figures, the industrial sector can surely differentiate the subsidised gas price they have been enjoying all these while.

Government subsidy target groups like fishermen will surely “shake their heads” upon seeing the very low subsidy they are receiving, compared with the industrial sector.

The government is estimated to bear over RM20 million in financial burden this year for gas subsidy alone and this “hidden cost” will continue to surge in years to come if gas prices are subsidised continuously.

Unfortunately, cumulative subsidy at around RM7 billion initially five years ago was enjoyed only by certain segments of the indutrial sector but not the people from all strata of society.

The bulk of the industries may pretend to be unaware that they have been actually inefficient in gas and diesel consumption. They seem to take the easy way out by switching to gas to take advantage of the cheaper energy, thanks to government subsidy.

Buying gas at market prices should jolt them up to boost energy efficiency and maximise their resources to minimise costs and improve competitive edge.

Under the Gas Sales Agreement, the gas supplied by Petronas, the national oil corporation, is based on medium fuel oil (MFO) price.

It is public knowledge that global oil price in the world market was on the upward trend throughout last year, resulting the same trend for MFO. MFO was sold around US$72 per barrel in December last year as compared with US$37 per barrel in March last year.

The higher the MFO price, the higher is the subsidy apportioned by the government for gas-powered industries.

Hence, the government is further burdened to increase the subsidy amount following spiralling demand from certain industries.

Petronas is said to be facing “supply hitches” following abrupt rise in demand for gas to the extent of exceeding its supply capacity.

Tenaga Nasional Bhd is also facing problems getting gas supply from Petronas, compelling the power utility giant to convert some of its electricity generation plants to be coal-powered.

Maybe it is time for the government to set prices of MFO, gas, diesel and coal based on market prices in order for local industries to have more choices for their fuel supply.

With that, reliance on gas will not be that high and hence, there will not be much difference in fuel price. This will pave the way for industries to opt for other sources of fuel if the demand for gas cannot be met.

A wide range of fuel will ease the “pressure” on the burgeoning demand for gas whose reserves are fast depleting. In conclusion, a prudent policy and pre-emptive measures adopted by the government and Petronas will help sustain the nation’s gas reserves for the future generation. – Bernama

GENTING Plantations Bhd has reported a pre-tax profit of RM301.9 million for its financial year ended Dec 31, 2009, down 37 per cent from the previous year's record level of RM482.88 million.

Revenue declined 27 per cent to RM755.6 million while earnings per share was 37 per cent lower at 31.1 sen, the company said in a statement Wednesday.

The weaker results in 2009 were mainly due to a six per cent year-on-year decline in the production of fresh fruit bunches (FFB) and softer prices of palm products amid a downturn in the global economy, it said.

The average crude palm oil (CPO) and palm kernel prices achieved in 2009 were RM2,236/mt and RM1,063/mt respectively compared with RM2,822/mt and RM1,595/mt in 2008, said Genting Plantations.

Contribution from the Property Division was also lower in 2009, down 45 per cent from the previous year to RM6.8 million due to the unfavourable economic conditions, the company said.

Expenditure incurred for the Biotechnology Division increased slightly in 2009 compared to 2008, but this was mitigated by the lower deficit recorded for the Plantation-Indonesia Division.

"Barring any unforeseen circumstances, the performance of the group for the coming financial year is expected to be satisfactory," Genting Plantations said.

The board of directors recommended a final dividend of 5.25 sen per ordinary share of 50 sen each, less 25 per cent tax, for the 2009 financial year.

This is higher than the final dividend of 5.0 sen per ordinary share, less 25 per cent tax, recommended for the previous year. - BERNAMA

KOTA KINABALU: The Sabah Fisheries and Fishermen's Development Corporation (Ko-Nelayan) recorded a gross profit of RM4.8 million, said Deputy Chief Minister Datuk Yahya Hussin.

BERLIN, Feb 21 – Germany’s finance ministry has sketched out a plan in which countries using the euro currency will provide aid worth between 20 billion and 25 billion euros ($27-$33.7 billion) for Greece, a magazine reported on Saturday.

Citing “initial considerations” by the ministry, German weekly Der Spiegel said the share of financial aid for Greece would be calculated according to the proportion of capital each country holds in the European Central Bank.

A spokesman for the German finance ministry said he would not comment on the report, which stated that the financial assistance should take the form of loans and guarantees.

The report said all euro countries would shoulder the burden and that Germany’s share in the package would amount to 4-5 billion euros, and be handled by state-owned bank KfW.

According to the German planning, the aid should be tied to strict conditions, the magazine said, adding that loan tranches should only be paid out once these are met.

Spokesmen for both the Greek finance ministry and the European Commission declined to comment on the report.

Chancellor Angela Merkel’s government has so far resolutely deflected appeals to promise Greece aid despite fears that failure to help Athens could threaten the euro.

Germany in public argues that leniency would take pressure off Athens and other euro zone debtors to cut their budget deficits. Behind the scenes, lawmakers acknowledge that Berlin has prepared measures if a rescue becomes inevitable.

Merkel’s position has been complicated by the fact the country is embroiled in a highly charged debate on the sustainability of Germany’s welfare state.

This has helped to galvanise public opposition to Berlin funding a bailout just as her centre-right coalition braces for a big test of its popularity in May, when voters go to the polls in Germany’s most populous state, North Rhine-Westphalia.

TRANSPARENCY

Speaking to Der Spiegel, Greek Prime Minister George Papandreou told Germany he was not seeking aid, and criticised the Commission for failing to ensure member states adhered to the EU’s Stability and Growth Pact that limits budget deficits.

“The union could in the past have more rigorously policed whether the stability pact was being observed – with us too,” he said. “In future we should allow the European statistics office direct access to individual member states’ data.”

“We suggested that, but not all countries wanted to have so much transparency,” Papandreou said.

Greece’s deficit swelled to 12.7 per cent of gross domestic product in 2009, way above the EU’s cap of 3 per cent, and Athens needs to sell some 53 billion euros of debt this year, including at least 20 billion euros in April and May.

In case demand should falter, German lawmakers have been quietly thinking about how Greece could be helped.

A senior financial official in the ruling coalition told Reuters last week Germany was considering using the KfW to buy Greek government bonds. A separate proposal saw the KfW issuing guarantees to German banks that bought the Greek bonds.

Separately, Der Spiegel said that an internal report by Germany’s financial market watchdog BaFin concluded that German banks could be seriously threatened if Greece or other countries including Spain, Portugal and Italy become insolvent. – Reuters

McDonald's Malaysia plans to train about 30 franchisees in the next three years and is inviting more people to join in.

The company's franchise programme would involve an investment of nearly RM4 million for the opening of a new restaurant, said senior director Chan Chee Chin after the opening of McDonald's Drive-In at Wakaf Che Yeh in Kota Baru today.

"We encourage more Malaysians to join us through the franchise system and those interested can contact us on the website," he said.

McDonald's Malaysia has 194 restaurants nationwide and three of them in Kelantan. Of the total, 21 are run by 10 franchisees.

Chan said a new operator would undergo a six-month training before opening the restaurant. -- Bernama

WASHINGTON: General Electric's overall work force fell by about 6 percent worldwide in 2009 as it struggled to deal with the effects of the deep recession and financial crisis, according to a company regulatory filing Friday.

GE's annual report shows the industrial and financial heavyweight reduced its overall employee head count by about 19,000 jobs to 304,000 workers.

It's the second year in a row that jobs have fallen at one of the world's largest companies after several years of job growth earlier in the decade.

Excluding 16,000 jobs that came on the company's rolls last year when it took a majority stake in a Central American bank, GE's work force fell by 35,000.

That was much larger than the 4,000 drop in jobs in 2008, the year that GE first began to feel the effects of the global downturn.

Worst hit was the conglomerate's GE Capital lending unit, which saw profits crumble last year as credit dried up and its losses on loans gone bad soared in areas like commercial real estate and credit cards.

GE Capital shed 25 percent of its work force to finish 2009 at about 55,000 employees, part of a company plan to significantly shrink the size of the division.

GE spokeswoman Anne Eisele said layoffs accounted for less than half of the change. Many jobs were left vacant after retirements or voluntary separations.

She also noted job losses were smaller than at other industrial and financial companies. Last year was one of the worst in GE's 117-year history.

It struggled mightily to stabilize GE Capital and keep profits up at its industrial units that make jet engines, power plant turbines and dishwashers.

The company also hit some painful milestones. It lost its top credit rating, slashed its dividend by 68 percent to conserve cash and watched its stock tumble 80 percent before recovering somewhat.

For all of 2009, GE's profit fell by 37 percent to $11 billion.

Still, the company said it expects that earnings will begin to grow again in 2011.

Orders inched up toward the end of 2009, which GE sees as a good sign for its industrial units. GE will also start the process of shedding its stake in the sagging NBC Universal entertainment division if a deal with cable operator Comcast closes later this year as planned.

And GE expects to have $25 billion in cash on hand by the end of 2010. - AP

WASHINGTON (AP): Regulators shut four banks from California to Florida on Friday, boosting to 20 the number of U.S. bank failures this year following the 140 closures last year in the worst financial climate in decades.

SHARIDAN M.ALI

Quiet trading due Chinese New Year holiday

KUALA LUMPUR: Asian markets were mixed in morning trade despite positive development in the US market.

The US stocks were driven higher on Wednesday due to stronger-than-expected corporate results and upbeat economic data.

Industrial production in the US rose more than anticipated in January with 0.9% increase in production at factories, mines and utilities.

Wall Street extending its rebound where key U.S. equity indices were up between 0.4% and 0.5% in overnight trading.

FBM KLCI gained 0.87 points or 0.07% to 1,259.94 at 10 a.m with 171 gainers and 165 losers meanwhile 159 counters remained unchanged.

Heavyweight Tenaga gained 14 sen to RM7.99 while Tanjong gained 20 sen to RM17.96. Other top gainers were Sunrise that increased by 18 sen to RM2.28 and KLK gained 14 sen to RM16.70.

HWANGDBS Vickers Research said stocks would likely to show an upward bias too given the positive external backdrop.

“Nonetheless, trading activity (which stood at just 545 million shares yesterday) is expected to remain thin as some investors are still away due to the Chinese New Year festival.

“FBM KLCI will probably strive to protect its recent gains by staying above the resistance-turned support level of 1,255 ahead.

Immediate upside, however, is seen to be relatively limited at the moment,” it said in its note today.

Upward regional bourses include Jakarta Composite Index that added 22.84 points to 2,581.34 while Japan’s Nikkei 225 gained 15.09 points or 0.15% to 10,321.92.

Other regional bourses namely Singapore Straits Times Index lost 9.77 points to 2,784.29 and Seoul’s Kospi Index was down by 0.22 points to 1,627.21. Nymex crude oil futures lost 0.26 cents to US$77.07 per barrel while rinngit stood at 3.4 to the US dollar

SHARIDAN M.ALI

SINGAPORE: Singapore's exports jumped in January for a third straight month as global demand for the city-state's electronics and petrochemicals surged.

Exports excluding oil rose 21 percent from a year earlier to 12.1 billion Singapore dollars (US$8.6 billion), according to Trade and Industry Ministry figures released Wednesday.

January's trade figures suggest Singapore's economy will grow sharply in the first quarter compared with a year earlier when the country was mired in a deep recession.

The government expects the economy to grow up to 5 percent this year after shrinking 2.1 percent last year.

Electronics - which account for 39 percent of non-oil exports - continued to grow, rising 23 percent from a year earlier after climbing 25 percent in December.

Increased demand for petrochemicals, primary chemicals and specialized machinery helped offset a dip in pharmaceutical exports, the ministry said.

Pharmaceuticals - which make up 10 percent of non-oil exports - fell 30 percent while petrochemicals surged 97 percent.

In seasonally adjusted terms, exports fell 8.9 percent from December.

A 31-percent drop in sales to Europe, Singapore's biggest non-oil export market, was offset by a surge of 76 percent to China and 16 percent to the U.S. - AP

LOS ANGELES: Simon Property Group Inc., the largest U.S. shopping mall owner, made a US$10 billion hostile bid Tuesday to acquire ailing rival General Growth Properties.

The acquisition would allow General Growth, the No. 2 owner of shopping centers, to emerge from bankruptcy protection.

General Growth filed for bankruptcy last year after buckling under the weight of billions in debt it racked up during a massive expansion effort fueled by cheap credit.

The move is Simon's second attempt at a major acquisition in three months.

In December, Simon offered $700 million in cash and stock to buy more than 60 outlet shopping centers from another competitor, Prime Outlets Acquisition Co.

The deal is pending.

Simon is using its comfortable cash cushion and credit lines to take advantage of falling commercial property values, which are off 40 percent from their peak in 2007.

And General Growth has some prized centers, including the Glendale Galleria in Southern California and the South Street Seaport in Manhattan.

Simon has been able to weather the economic downturn despite rising retail vacancy rates in the double-digits in some cities.

The Indianapolis-based company popularized the so-called lifestyle center mall design that turned malls into neighborhood-like communities.

Simon owns more than 380 properties, including the Houston Galleria and the Fashion Valley Mall in San Diego.

Many national retail companies have stores in regional malls like those that Simon and General Growth own.

If Simon or another large mall operator were to acquire General Growth's centers, that could give it more muscle to negotiate for higher rental rates with retailers.

Under the terms of the offer, General Growth's unsecured creditors would get $7 billion, which would pay them in full.

Shareholders would receive $3 billion, or $6 a share in cash and $3 a share in other assets.

The offer, however, might be amended so shareholders could receive Simon stock instead of cash.

"Simon's offer provides the best possible outcome for all General Growth stakeholders," said David Simon, chairman and CEO, in a statement.

Simon disclosed its offer after General Growth's board failed to respond to a formal offer it made last week.

In a letter to General Growth's board dated Feb. 8, Simon spelled out its offer and argued shareholders stand to gain more from a takeover than if General Growth emerged from bankruptcy as a standalone company, or accepted a rival bid.

"We are convinced that a transaction with Simon is superior to any proposal you may be considering," Simon wrote in the letter, stressing the proposal was not open-ended.

A spokesman for Chicago-based General Growth had no immediate comment.

Though the official committee for General Growth's unsecured creditors has backed the deal, stockholders appeared to be looking for a sweeter offer from Simon or another competitor.

Shares in General Growth shot up nearly 28 percent, or $2.62, to $12.02.

Simon shares rose $2.82 to $74.82 in afternoon trading.

Alexander Goldfarb, an analyst with Sandler O'Neill & Partners, said he expects other offers to drive the bidding higher.

"General Growth has a number of options," Goldfarb said. "This is not the only one."

Any offer, should it be accepted, would be a steal compared to what General Growth was worth in 2007.

Back then, with shares trading above $60, General Growth had a market value of about $15 billion. At Tuesday's closing price, the entire company was valued at about $3.8 billion.

But any new owner would have to deal with General Growth's massive debts.

The company racked up $27 billion in debt by the time it sought shelter from creditors last April, making it the largest real estate bankruptcy case in U.S. history.

In December, a bankruptcy court approved its plan to restructure $10.25 billion in debt.

A plan for restructuring another $1.7 billion in debt is up for approval when some conditions are satisfied.

At the time, General Growth said it was considering "all indications of interest in the company."

That fueled speculation the mall operator was fielding offers.

Many real estate investment trusts are also flush with money, having raised $34.5 billion of new capital last year.

Some traders are speculating Brookfield Asset Management could be among those interested in buying General Growth.

The company has been looking to expand its slate of retail properties and acquired a stake in General Growth last year.

Brookfield hasn't provided details but said the stake was "significant." Published reports have suggested the Brookfield spent as much as $1 billion - something the company hasn't confirmed or denied.

In 2006, Brookfield made a bid for shopping center owner Mills Corp. but was foiled by Simon.

Brookfield spokesman Denis Couture declined to comment Tuesday. - AP

AMSTERDAM: ING Groep NV, one of Europe's largest banking and insurance groups, reported a hefty loss for the fourth quarter on Wednesday, reflecting a mixed operating performance and a big charge related to an earlier bailout.

ING's net loss was euro712 million ($980 million), far less than the euro3.71 billion the company lost in the same period a year ago at the height of the financial crisis.

This quarter's figures included a one-time payment to the Dutch state of euro930 million.

That was demanded by the EU Commission's competition authority after it ruled a bailout package given to ING by the Netherlands was too generous.

At the company's operations, it made a euro132 million profit at its banking division, mostly due to a highly profitable retail division, but its corporate and real estate divisions continued to lose money.

In addition, provisions against bad loans rose by euro686 million.

A year ago the banking division lost euro1.84 billion.

"The bank showed a strong commercial performance, supported by improved interest margins, higher results from financial markets and cost reduction," said Chief Executive Jan Hommen in a statement.

The company has cut 7.9 percent of staff over the past year and now employs 107,173 people.

Under pressure from the EU, ING is planning to split its banking and insurance arms by 2012.

ING lost euro47 million from its insurance activities, compared with a euro2.5 billion loss a year ago.

And it made euro273 million on investments, compared with a loss of euro217 million a year ago. - AP