ING Group to divest insurance operations, reports higher Q3 results
Amsterdam - Dutch financial giant ING Group is to separate its insurance and investment management branches from its banking division, the company announced in a statement Monday.
By 2013, ING is to divest all its insurance and investment management operations as part of its previously announced Back to Basics programme intended to restructure and streamline the bank's activities.
ING also announced preliminary third-quarter results which showed that underlying net results were expected to amount to 750 million euros.
The figure compares with 229 million euros achieved in the second quarter and with 508 million euros in losses in the third quarter of 2008.
The decision to divest its insurance operations is also part of a larger restructuring plan the bank filed with the European Commission, the bank said.
ING said the separation is to be achieved over the next four years by issuing new shares, sales or a combination thereof.
The bank had worked "tirelessly" to devise a plan that would enable ING to repay the Dutch state and "return our focus to the business and what matters most to our customers," CEO Jan Hommen said in a statement.
The top manager added the decision to split the company was sparked by "widespread demand for greater simplicity, reliability and transparency."
The Dutch bank and insurer also announced it would issue 7.5 billion euros (11.26 billion dollars) in new shares to finance the repayment of last year's capital injection by the Dutch government.
ING said it would repay the Dutch government 5 billion euros in December, while also taking a pre-tax charge of 1.3 billion in the fourth quarter to repay government support. The remaining debt, also 5 billion euros, would be paid off.
In order to get approval from the European Commission for its restructuring plan, ING would have to divest its "very strong franchise" ING Direct USA, the bank said, emphasizing "the US market offers potential for growth." (dpa)