ING Reins In Exposure to Potentially Bad Euro Debt

"We are not surprised that ING is giving its capital position priority over the repayment of state aid," said analyst Lemer Salah of SNS Securities. "Although the 'less-and-later' aspects of today's message are a disappointment, we feel comfortable with our 'buy' recommendation because of the fundamental attractiveness of what will remain in the medium term."

The EU Commission has ordered ING to split itself into separate insurance and banking companies by 2013 in response to the state support it received during the crisis, which also included the Netherlands assuming most of the risk for ING's portfolio of U.S. mortgage-backed securities. ING plans to sell its European and Asian insurance business, and spin off its U.S. insurance and asset management arm in an initial public offering of shares by the end of 2013.

Though Hommen said regulatory demands were "limiting banks' ability to grow," he laid out the hope that ING's banking arm will prosper by returning to a more traditional model of seeking funding from retail depositors and then lending the money to businesses itself.

In the years before the crisis, European banks generally raised increasing amounts of short-term funding from financial markets and invested in exotic financial products—such as mortgage-backed securities and derivatives—that they did not themselves create.

As short-term credit markets are increasingly closed to European banks, many have been forced to turn to the European Central Bank for funding. Hommen told investors he would seriously consider taking advantage of the ECB's second offer of three-year funding at 1 percent in February.

"It's too attractive to pass up," he said.

ING's presentation Friday noted it is continuing attempts to sell "non-core" assets to shrink its balance sheet, without elaborating on which.

Hommen said ING's strategy changes will "improve the quality of the overall asset side and produce a better return, with a low risk balance sheet."