The slowdown in the global economy claimed another victim yesterday as Dutch banking and insurance group ING slashed its profit forecast for the current year and saw its shares plunge.

ING cut its expected earnings growth to 5 per cent from a predicted 17 per cent. It blamed the deterioration of the world economy, alongside claims resulting from the September 11th terrorist attacks in the US which it estimated at €100 million, up from an earlier estimate of €50 million.

The shares, which tumbled 14.9 per cent to €26.60, had recovered 25 per cent since hitting a two-year low of €22.34 in late September.

The markets had been expecting a lowered forecast from ING, but not of the magnitude unveiled yesterday. The news sent ripples throughout European financials, leaving the insurance sector of the FTSE Eurotop 300 index down more than 5 per cent and the worst performer in late afternoon trade.

The news brought the threat of downgrades from a number of analysts. However, WestLB Panmure reiterated its outperform rating on ING saying: "Apart from the impact of the political and economic environment, we see the company is a good shape." Other notable losers included ABN-Amro which lost 6.4 per cent to €16.05 on the perception that it might have a profits warning up its sleeve, although the company has denied it.

France's Axa lost 7.3 per cent to €22.79 while German financial services group MLP dropped 3.6 per cent to €63.85.

Germany's third largest blue-chip bank, Commerzbank, tumbled 6 per cent to €16.39 as it announced plans to axe 3,400 jobs as it braces for a third-quarter loss.

The bank said the cost-cutting measures were intended to secure a rapid improvement in its earnings performance.

Commerzbank posted an after-tax loss of €120 million for July and August and cautioned that September had been bleak too.