Also revises the Group’s outlook to negative on the deteriorating economic environment

Fitch Ratings has revised to negative the outlook for ING Group.

At the same time, the agency downgraded the individual rating of ING Bank to 'B' from 'A/B'.

Fitch said the outlook and downgrade reflect the deteriorating economic environment and its impact on ING’s profits.

The rating agency, however, affirmed the ratings of ING Group, ING Bank N.V. and ING Verzekeringen N.V. and a number of their rated subsidiaries.

ING Group has two main subsidiaries: ING Bank, which contains most of the group's banking businesses, and ING Verzekeringen, which contains most of the insurance activities.

‘ING Group is expected to announce a Q308 net loss of approximately EUR500m, following EUR1.6bn of pre-tax write-downs. Further write-downs cannot be ruled out if market conditions worsen, said the agency. In particular, a potential increase in US housing defaults could negatively impact the group's portfolio,’ said Fitch in a statement.

‘The ratings of ING Bank take into account the material capital injection by the Dutch government, bringing ING Bank's Tier 1 capital ratio to 10%. The total planned capital injection into ING Group is EUR10bn; EUR5bn will be down-streamed to the bank and EUR2bn will be down-streamed to the insurance company,’ added the statement.

‘Earnings from insurance activities have decreased, reflecting lower investment income and a continuation of this trend is expected. Capital adequacy is expected to improve as a consequence of the Dutch government's support but remains relatively low for a rating in the 'AA' category,’ continued the statement.