Capital One will buy the US online banking unit of ING for US$9 billion, making the Virginia-based lender the fifth-largest bank in the US in terms of deposits, the two banks said on Thursday.
The deal, one of the largest bank acquisitions in the US since the 2008 financial crisis, is expected to close later this year or early next year, pending approval by US and Dutch regulators, Capital One said.
“It is a rare occurrence in the game of banking, a game-changing transaction,” Capital One chairman and chief executive Richard Fairbank told reporters after the deal was announced.
“You haven’t seen a lot of bank merger and acquisitions of late,” Fairbank added.
Capital One will buy ING Direct USA for about US$6.2 billion in cash and US$2.8 billion of stock. As a result, Amsterdam-based ING will become the largest single shareholder in Capital One, with a 9.9 percent stake.
After the deal closes, Capital One will become the fifth-largest depository institution and the leading direct bank in the US, the bank said in a statement.
ING clarified that the deal would only affect ING Direct USA and not its online banking units in Canada, Europe and Australia, where it would focus its efforts going forward.
“Although I regret that ING Direct USA will no longer be a part of ING, I am very pleased that we have found in Capital One a good home for our customers and employees,” ING Group chief executive Jan Hommen said in a separate statement.
ING has been looking to sell off ING Direct as it seeks to raise funds to pay off the billions of euros it owes the Dutch government from its bailout during the global financial meltdown.
ING accepted a 10 billion euro (US$14.2 billion) cash injection from the Dutch government in October 2008 as financial markets reeled from the Lehman Brothers bankruptcy.
ING Direct USA was launched in September 2000 and is now the largest direct bank in the US, with 7.7 million customers, according to ING.
Following the acquisition, the online bank will retain brand attributes such as its trademark “orange ball,” ING said.
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