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ING to sell off more operations

ING to sell off more operations
AP
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First Published: Thu, Apr 09 2009. 03 27 PM IST
Updated: Thu, Apr 09 2009. 03 27 PM IST
Amsterdam: ING NV, the Dutch bank and insurer, said Thursday it plans to sell operations it says could raise up to €8 billion ($10.6 billion).
The move, unveiled alongside a reshuffling of business units to simplify the company structure, is an increase from a previous target announced in January to raise €3 billion.
So far, ING has sold its Canadian operations for €1.4 billion.
“Next to a number of leading positions in key markets, a group of smaller businesses with no clear outlook for market leadership consumes a disproportionate amount of capital,” the company said in a statement.
Shares rose 9.9% to €5.775. They have had a wild ride, falling from above €25 a year ago and trading as low as €2.30 in March.
The company’s statement Thursday didn’t specify which business it would definitely sell or set any time frame for achieving the target. It also didn’t say whether there was any interest from buyers.
ING said it now plans to focus mostly on European banking, with extra focus on Belgium and the Netherlands. However, it intends to continue offering both banking and insurance in Europe, Asia and the United States.
It said it doesn’t plan to sell its online banking service, ING Direct, and that its life insurance businesses in China and Japan were “under review.”
Incoming Chief Executive Jan Hommen was to address investors at a meeting later Thursday. His predecessor, Michel Tilmant, resigned in January after saying ING expected to post a large loss in the fourth quarter, which turned out to be a loss of €3.1 billion.
ING has received significant aid from the Dutch government since the financial crisis began. Last year it received a €10 billion investment lifeline to shore up its equity base.
And in January the state assumed most of the risk for €27.7 billion in troubled U.S. mortgage-backed securities ING owns.
ING said Thursday it has cut 3,500 jobs so far since announcing plans to cut 7,000 in January, around 5% of its work force. As of Thursday, ING said it employs 25,000.
Hommen, a former chief financial officer of both Philips Electronics and Alcoa, said that ING’s tier 1 capital ratio _ the most widely used measure of a bank’s solvency _ was 9.3% at year end.
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First Published: Thu, Apr 09 2009. 03 27 PM IST