Updated from 1:55 a.m. EST
, the Dutch financial service company, reported a fourth-quarter underlying or adjusted loss of 3.1 billion euros ($3.9 billion) because of market volatility and declining asset prices and said it planned to cut operating costs by 1 billion euros in 2009.
The net loss in the quarter was 3.7 billion euros.
ING said the fourth quarter "marked the worst quarter for equity and credit markets in over half a century."
The shortfall consisted of a loss of 1.07 billion euros at ING's banking arm, mostly because of increasing provisions for bad loans, and a loss of 2.04 billion euros at its insurance arm, primarily because of investments gone sour.
In the year-earlier fourth quarter ING posted underlying profit of 2.64 billion euros.
For fiscal 2008, ING posted an underlying loss of 171 million euros, a swing from profit in 2007 of 9.2 billion euros.
ING Chairman and CEO designate Jan Hommen said 2008 was "marked by a sharp deterioration in financial results and the necessity to reinforce our capital base with the support of the Dutch state. ING had started the year focused on growth, and we were overtaken by the pace and severity of the downturn in the fourth quarter that eroded our earnings and our equity."
Hommen said that after assistance from the Dutch state, the company's tier 1 capital ratio -- the most widely used measure of a bank's solvency -- was 9.3% at year end.
ING has cut two deals with the Dutch government. Last year it received a 10 billion euro investment lifeline. In January, the state assumed most of the risk for 27.7 billion euros ($35.8 billion) in troubled U.S. mortgage-backed securities ING owns.
"Our top priorities this year are to further reduce asset exposure and rationalize the cost base," Hommen said in a statement. He said the company would reduce loans by 10% from September levels, and cut expenses by 1 billion euros by the end of the year.
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