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ING Direct to be sold by 2013


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#1 markber

markber

    1 billion bucks

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Posted 04 November 2009 - 04:58 PM

QUOTE

ING to sell Delaware-based bank in 2013

By ERIC RUTH • The News Journal • October 27, 2009


Worried about a crackdown by European Union regulators and scrambling to pay back "bailout" funds from the Dutch government, ING Groep NV said Monday that it has agreed to sell its Delaware-based U.S. Internet bank in 2013.

The sale announcement isn't expected to have any immediate impact on Wilmington operations of ING Direct, but does add another element of uncertainty to an industry that is already contending with staff cuts, earnings slides and impending regulatory overhaul.

"It is business as usual here," said Cathy MacFarlane, chief of corporate relations for the bank's U.S. operations. "2013 is a long time away. We are a strong business model, a strong brand and we are continuing to give our customers the best value in town."

About 1,200 people work from the four city buildings of ING Direct, which specializes in online and phone-based retail banking in the U.S. market.

Long considered one of the parent bank's most attractive businesses, ING Direct had been growing steadily since it came to Wilmington 10 years ago, stressing a message of savings through its "Orange" branded products.

When customers began expressing concern about the sale through the bank's Twitter page, the bank's Wilmington team was quick to respond Monday.

"Have no fear, we're still Orange, still as safe as Fort Knox and still paying more interest than your mattress," the bank Tweeted back at 12:15 p.m.

"I think that really sums it up," MacFarlane said. "We all feel that way."

In the past five years, national ING Direct staff levels have grown from 805 to 2,209, falling slightly when the financial crisis struck.

ING Groep NV also said it wants to raise $11.3 billion in a rights offering and sell its insurance units in an effort to pay back bailout funds. The bank has been cutting costs and selling operations since the financial crisis struck, when it was forced to seek two major rounds of assistance from the Dutch state.

The EU is reviewing bailouts across Europe to ensure state aid doesn't give some banks an unfair advantage. It forced Commerzbank AG, Germany's second-biggest bank, to sell assets in May, and has indicated that Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc may be forced to sell assets and branches.
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The company said it will likely seek an initial public offering for the insurance businesses within four years.
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"This is a momentous day for us: splitting the bank and insurance is not a decision to be taken lightly," said Chief Executive Jan Hommen, a former board chairman who took the executive job in January after his predecessor was fired.

"We're making a decisive move to turn ourself into a simple organization."

ING had been a leading advocate in Europe of the advantages of combining banking and insurance, and historically the two arms have generated about equal shares of the company's earnings. ING was created by the 1991 merger of insurer Nationale Nederlanden and NMB Postbank Group.

But Hommen said the events of the past year "have changed the environment in which we operate, and the complexity of ING didn't help us during the crisis."

He said ING bank, which will remain within the holding company, will benefit more from transparency and a smaller balance sheet than it did from cost savings on related businesses.

Analysts from SNS Securities praised the company's strategic moves, saying they were considering changing their "reduce" advice on shares.

In addition, "ING seems to have negotiated the best deal by far" with the Dutch state among companies that received aid, they wrote.


source: delawareonline.com/article/20091027/BUSINESS/910270319/1003







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