Dutch financial services company ING Group said Friday that it may have to sell more assets to repay state aid, as it grapples to meet stricter banking rules and protect itself against choppy markets.

The chilly market environment is forcing ING to hold on to capital that otherwise could have been used to repay the state. As a result, it could be necessary to divest more banking assets to raise capital, Chief Executive Jan Hommen said. "There are disposal opportunities in case we need it," he said without elaborating.

ING received €10 billion ($12.8 billion) in state aid during the financial crisis in 2008 and still owes the Dutch state €3 billion ($3.8 billion), plus a €1.5 billion ($1.9 billion) repayment premium. The company had hoped to repay that money by May but said Friday that it could be delayed until the end of 2013.

"Given the ongoing crisis in the euro zone and increasing regulatory capital requirements, we need to take a cautious approach," Hommen said.

The CEO said key priority is to build and maintain a strong capital base even if this would hurt profits and disturb repayment plans. "Capital, funding and liquidity are priority this year. Earnings are also important, but not the first priority," he said.

European banks have to bolster their capital to make them better able to cope with potential losses on government bond holdings amid the debt crisis in the euro zone. By the end of June, large banks must maintain core Tier 1 capital ratios of 9%, which measures high-quality capital relative to risky assets.

ING already meets these rules, having reported a ratio of 9.6% at the end of September. But it will need to set aside a yet undisclosed amount of extra capital by 2016 because regulators have labeled it as being systemically important to the financial system. Its new target is a ratio of 10%, which should be achieved by 2013.

That, combined with a weak economy and ongoing market turmoil, make it too risky to cut the government lifeline at this stage, Hommen said.

There are consequences, however. Until it fully repays the state support, ING can't make acquisitions and it is banned from offering competitive prices in some markets. And investors won't receive a dividend until ING has fully redeemed the debt and complies with rules under Basel III, a new capital regime for the global banking industry.

It's not clear whether ING would face additional penalties from the European Commission if it fails to repay next year. The European Commission ordered ING to shrink its balance sheet by nearly 50% as a condition for its approval to the state support. The operation should be completed by the end of 2013 and mainly involves the divestment of ING's global insurance arm.

Some analysts say the Commission may relax its requirements because the restructuring didn't anticipate on a stricter regulatory environment.

Meanwhile, the revamp is increasingly frustrated by the market turmoil. ING said earlier this week that it will sell its Asian insurance business separately because choppy markets make it difficult to float it as part of a European-Asian IPO.

ING on Friday gave a strategy update in which it outlined its future as a standalone bank. It gave a sobering outlook, saying the industry has to confront the reality of a less profitable and lower-growth future. Against this backdrop, ING scaled down the financial targets for its bank, which had become outdated because they were based on old, more lenient capital rules.

Still, Hommen said the lender can benefit from further cost-savings, a more efficient balance sheet and strong market positions in the more robust European economies like the Netherlands, Belgium and Germany.

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