ING Groep NV (ING: Quote) announced that, together with the Dutch State, it has reached an agreement with the European Commission on significant amendments to the 2009 Restructuring Plan. The amendments extend the time horizon and increase the flexibility for the completion of divestments and adjust other commitments in light of the market environment, economic climate and more stringent regulatory requirements. As a result of the agreement, the Commission will close its formal investigations as announced on 11 May 2012. ING will withdraw the appeal at the General Court of the European Union that it filed in July 2012.
As part of the agreement, ING has filed a schedule for repayment to the Dutch State of the remaining 3 billion euros in core Tier 1 securities plus a 50% premium, in four equal tranches in the next three years. A first tranche of 1.125 billion euros will be paid on 26 November 2012.
As part of the approval by the European Commission in November 2009 for the State support received from the Dutch State during the financial crisis, ING was committed to divest all of its Insurance and Investment Management operations, ING Direct USA and WestlandUtrecht Bank by the end of 2013. Under the amendments, the ultimate dates for divesting the insurance and investment management businesses have been extended. The divestment of more than 50% of the Asian Insurance/IM operations has to be completed by year-end 2013, with the remaining interest divested by year-end 2016. The divestment of at least 25% of ING U.S. has to be completed by year-end 2013, more than 50% has to be divested by year-end 2014, with the remaining interest divested by year-end 2016. The divestment of more than 50% of Insurance/IM Europe has to be completed by year-end 2015, with the remaining interest divested by year-end 2018.
Under the terms of the original Restructuring Plan, ING was required to divest WestlandUtrecht Bank, comprising mainly of certain mortgage, savings, investments and consumer lending activities. Due to market circumstances and changing regulatory requirements, divestment of WestlandUtrecht has proved not to be feasible. Under the amended terms of the Restructuring Plan, the commercial operations of WestlandUtrecht Bank will be combined with the retail banking activities of Nationale-Nederlanden, which is to be divested as part of Insurance/IM Europe. The integrated retail banking business will operate under the ‘Nationale-Nederlanden’ brand, resulting in a retail bank in the Dutch market. Of WestlandUtrecht Bank’s 36.4 billion euros Dutch mortgage portfolio, 2.6 billion euros will be transferred to Nationale-Nederlanden Bank. ING Bank will retain the remaining 33.8 billion euros mortgage portfolio and in relation to this will contribute 350 million euros to the capital of Nationale-Nederlanden Bank. Part of the employees of WestlandUtrecht Bank will transfer to Nationale-Nederlanden Bank while another part will remain at the separate WestlandUtrecht Bank entity within ING Retail Banking Netherlands. The reorganization will result in a number of redundancies.
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by RTT Staff Writer
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