Question to…

Question to Frank Koster, General Manager of Corporate Communications and Affairs for the ING Group: 

“In the light of financial crises hitting the headlines over the last six months – Northern Rock in the UK, the subprime mortgage crisis in the US, Société Génerale in France – how did financial companies such as ING adapt to the turbulence?”

The turbulence in recent months has certainly applied tight pressure on financial institutions to communicate the impact of the crises on their business performance and financial results. ING is fortunate to have a very limited exposure to troubled asset classes. Thanks to our business profile and risk management, we’ve been able to shield ourselves from the direct impact of the credit crisis.  

But in an environment where many financial institutions are being lumped together – and there was even a period where banks wouldn’t lend to other banks anymore – the presumption of innocence disappeared and the credibility of the whole financial industry was at stake. The burden was clearly on us to communicate our exposure to all of our stakeholders and we aimed to do so in an thorough and consistent manner.

In November 2007, ING released its third quarter results which showed a very limited exposure to asset classes under pressure. However, the results came at a time of heightened skepticism in the market about the accuracy of the results of financial services companies because of the complex nature of the credit crisis. Between November and the release of the fourth quarter results in February 2008, market sentiment towards financial services companies considerably worsened and share prices came under major pressure.  

At a few points in the month leading up to the fourth quarter results, there was much market speculation about ING’s risk exposure. In response to queries from analysts and journalists, they were directed to information in ING’s third quarter results, which said there was limited impact on ING’s results from the market turbulence.

ING’s response was to opt for full and extensive disclosure in its fourth quarter results and not be pressured into making an interim statement before then, which could have appeared defensive. It was also decided that ING chairman Michel Tilmant would take the company’s message of financial stability direct to a large international audience of analysts and journalists by holding press and analyst conferences in London, instead of at the company’s head office in Amsterdam. In his words, he wanted to “look the analysts in the eye”.

ING’s fourth results were generally very well received and the market showed it believed our message by marking the share price up after the publication of the figures. This disciplined communications strategy was successful.