The European Commission has rejected a request from ING, a Dutch bank, to repay private investors around €1.2 billion in hybrid capital ahead of schedule.

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The Commission says the bank has yet to fully reimburse the Dutch state for the support it received, which was a condition of state aid provided in 2009.

Joaquín Almunia, the European commissioner for competition, said: “ING cannot repay its private hybrid capital holders until it has repaid the capital it received from the Dutch state in full. This is to ensure a fair distribution of the rescue burden in the first place.”

The decision means that ING’s call on the hybrid tier 1 instrument, which mainly consists of shareholders’ equity, cannot go ahead on 31 December.