More companies moving away from risky Spain
August 10, 2012 1 Comment
As the crisis continues to pull Spain further into debt more and more companies are taking steps to reduce their exposure to the struggling country.
Financial services group ING Groep NV reported a 22% fall in second-quarter net profit as it took a hit to cut it’s exposure in Spain.
Separately, Swedish security services group Securitas AB said it may take steps to terminate more contracts in Spain following significant cuts to unprofitable contracts in the first quarter, and fears that some Spanish customers may be unable to pay their bills.
There is already much speculation surrounding where the Spanish economy is going and if Spain will require further financial aid from Europe and steps such as these will only intensify concern.
Securitas and ING are not the first to cite Spain as a “risk” or to distance themselves from the country. Last week the International Consolidated Airlines Group, which owns British Airways and Iberia, said it has already started taking steps to prepare for the possibility that Spain could leave the Euro entirely.
ING said they reduced their exposure to Spain in response to the worsening crisis to “reduce the funding mismatch in that country.” Last month the company cut it’s total exposure from 41.1 billion euros to 34.9 billion through selling covered bonds and residential mortgage-backed securities. As a result of this ING said they made a loss of 234 million euros.
Spain “is going through a massive reduction in government spending, which is having an impact on the economy at large,” ING Chief Executive Jan Hommen said in a statement.