ING Baring Securities could be the next financial group in Asia to suffer staff cutbacks as the Netherlands-based parent moves to stem the flow of red ink in its emerging markets operations. An internal company memo that began circulating last week in Hong Kong warned of tough measures to cut costs as much as 25 per cent, sources said. 'We are looking at numbers to identify areas where we can save costs and manage our cost base to represent the market environment in which we operate,' the company's head of corporate communications in Asia, Edward Naylor, said. Mr Naylor would not say whether staff cuts were among the options. The mandate to reduce costs comes as other brokerages in the region cut staff. Sun Hung Kai Investment Services confirmed it dismissed three analysts from its research team yesterday and 12 other staff, mostly back-office. Santander Investment said it had fired 15 per cent of its workforce in Singapore as part of its plan to merge its bank and stockbroking operations. Nine Hong Kong staff were dismissed in June as part of the merger. Last month Daiwa Securities cut 36 per cent of its staff in Hong Kong. ING Barings' provisions for Asia reached 590 million guilders (about HK$2.3 billion) in the first half of this year. The figure included provisions for loans by ING Bank in Asia as well as for its operations in Russia and Latin America. In announcing the first-half results last week, ING Group chairman Godfried van der Lugt vowed that 'we are not going to leave any countries where we're present'. But he also emphasised ING Group would move to control costs in emerging markets operations. Overall, the group's profits rose 74 per cent to 3.84 million guilders in the first half of this year. But banking operations - excluding acquisitions and sell-offs - fell 8.8 per cent, which the company blamed on the 'disappointing trading results and commission income of ING Barings as a result of the effect of the financial crisis in Asia'. Contagion from the Asia crisis hurt income in all its emerging markets, it said. For ING Barings' Hong Kong operations, the mandate to cut costs follows several redundancies early this year and staff changes in the past few months. ING Barings' economist and a property analyst moved to other brokerages, and the head of Asian equities, Angus Baxter, was recently recalled to London. A former staff member who recently left the firm said: 'I'm not surprised to hear of cuts in expenditure . . . otherwise I would have stayed.' Mr Naylor said ING Barings had 650 staff in Hong Kong and 2,000 in Asia. Analysts said ING Barings was not the only securities group under heavy pressure to cut costs. Since the rouble devalued on August 17, stocks and bonds have dived in the region. The seriousness of the rout will delay for months any fund-raising deals, while commission income from brokering has been depressed for months. Salomon Smith Barney managing director Stephen Roberts said: 'Credit spreads for borrowers throughout the region have widened substantially over the last few weeks. 'It's a global phenomenon of investors becoming more wary of emerging markets. I don't think I'd be optimistic enough to say we'll see a return to normal markets over the next few months.'