Financial services firm ING Groep NV (ING) aims to improve the efficiency of its Latin American operations this year after the global financial crisis forced the company to suspend its acquisition plans, according to a top executive.

For Carlos Muriel, chief executive of ING Latin America, 2009 is a year to cut costs and expand the firm's distribution channels, after pulling the plug on dealmaking in the second half of 2008.

"We were evaluating projects that were in advanced stages, acquisitions that would have allowed us to increase our scale in the region, which had to be shelved," he told Dow Jones Newswires.

Muriel said it's too early to say if ING could restart its acquisition program next year, noting that many of the deals he was looking at are still on the market because the crisis has limited the number of potential buyers.

"I think asset management and voluntary savings are what I would see as the biggest priority," he said.

ING was forced to seek government aid, temper its growth plans, and divest assets after extreme market volatility and sharp declines in asset prices in 2008 resulted in a loss of EUR729 million.

In order to free up capital and reduce its risk profile, ING sold its life insurance operations in Taiwan and its Canadian property and casualty business in the first quarter of this year.

In Latin America, the Dutch group has been active in recent years both buying and selling assets as part of its strategy to focus on pension savings and wealth management services.

ING bought Banco Santander SA's (STD) pension fund and annuity assets in the region for EUR1.14 billion in early 2008 in a deal that cemented its position as the No.2 manager of compulsory retirement savings in Latin America, behind Spain's Banco Bilbao Vizcaya Argentaria SA (BBV).

In Peru, ING increased its stakes in the country's leading pension fund company as well as a local mutual fund provider.

ING sold its insurance operations in Mexico to France's AXA SA (AXA) for EUR950 million, and completed the sale of its health business in Chile.

Today, the company has about 9 million clients in the region with operations in Brazil, Mexico, Chile, Colombia, Uruguay and Peru.

Latin America's compulsory pension savings industry, which represents the bulk of ING's revenue and clients in the region, is fast approaching maturity, according to Muriel, who sees wealth management services like mutual funds and life insurance as the biggest growth opportunity in the years ahead.

While the low use of financial services in Latin America is a boon for foreign banks and insurance companies, the rise of populism in several countries has caught foreign investors off guard.

ING took an EUR188 million loss in the fourth quarter from the expropriation of its pension fund business and provisioning for annuities in Argentina after the government nationalized the country's private pension industry.

Muriel said Argentina's pension fund companies are currently debating how to approach the government for compensation.

"Our experience was a lesson in the need to constantly study and watch political developments in each country where we operate," he said.

According to the executive, pension fund companies need to do a better job of promoting financial literacy where they operate so that the public identifies with the savings managed on their behalf, rather than seeing mandatory retirement contributions as an unwanted tax.

"I think the best defense against temptations to nationalize these resources is financial education and culture. One of the biggest lessons (from Argentina) is that important players like ING, BBVA, and Citigroup should have a much more proactive attitude in terms of helping to promote education," he said.

-By Ken Parks, Dow Jones Newswires, 52-55-5001-5723, ken.parks@dowjones.com