Switch to low-risk strategy for ING Barings

ING BARINGS, the City investment bank, is to switch its emphasis away from emerging markets and towards Western Europe in the wake of the huge losses as a result of August's Russian crisis, Godfried van der Lugt, the chief executive of the firm's Dutch parent ING, told staff yesterday.

David Robins, who replaced Marinus Minderhoud as head of ING Barings in September, is to brief ING's supervisory board in Amsterdam later today on the outcome of the four-month strategic review of the business. About 1,200 staff have already lost their jobs.

Senior ING executives have suggested that further job losses may be announced, although they insist the review is not just about cost-savings and may bring expansion in some areas.

In his New Year message to staff, Mr van der Lugt said the board was in broad agreement with the underlying spirit of Mr Robins's proposals to pull out of high-risk areas to focus on more stable parts of the world. The rebalancing of strategy should result in greater stability in earnings and improved profitability, he said.

However, a final decision to implement the changes would probably have to wait until the board met again in mid-February, he said. "Although the financial markets have recovered reasonably well in recent months, we shall have to accept a structural decrease in business volume in our corporate and investment banking activities in emerging markets.

"We fully understand the need to clarify the position as quickly as possible, but too much is at stake for us to be pressured into making a hasty and ill-considered decision."

The delay will worry executives who fear that Mr Robins's attempts to restructure may be frustrated by vested interests. Mr Robins is said to favour reducing emerging markets offices and switching resources into the UK and Western Europe to exploit the surge in corporate activity expected after the launch of the euro.