EUROPE - Despite regulatory setbacks in both Poland and Hungary, bancassurer ING is still upbeat about the business opportunities in Central and Eastern Europe (CEE).

In its annual report, it said it still believed in "solid growth opportunities" in the region, with its market of approximately 220m and a "relatively low penetration rate" for pensions and life insurance.

However, the prospect of further regulatory change in the region was still a concern, it said.

Last year, Hungary quasi-nationalised its mandatory pensions to meet its budget deficit targets.

ING, which reported a net result of €3.2bn after a €935m loss in 2009, said it lost €10m as a result of a prepaid capitalised commission write-off in its Hungarian pension fund.

It added that lower fees and premium-based revenues were in part driven by lower revenues of its Polish pension scheme.

Despite Poland's capping of the commissions a second-pillar scheme can earn, ING's Polish pension fund has also become the country's largest in terms of assets under management, ING said.

It added: "Uncertainties about mandatory savings regulations could lead to extra demand for voluntary pensions, which could offer ING opportunities for a further sales increase."

ING said its €387bn global investment management company (ING IM) had focused on enhancing its global investment capabilities by establishing a "skills-based multi-boutique structure".

ING IM, which saw its assets under management increase by 13%, reported that all asset classes outperformed their respective aggregated benchmark over the past 12 months.

Jan Hommen, ING's chairman, said the company's focus for 2011 would be on preparing two IPOs - one Europe-led and one US-led - through sharpening its strategic direction, strengthening its capital base and improving its investment results.

The European Commission has ordered ING to split up its banking and insurance operations after it received financial support from the Dutch state.