Dutch bancassurer ING Groep NV on Monday said it would split itself in two as part of a restructuring deal with the European Commission, transforming itself over the next four years into a smaller, Europe-focused bank.
The company also said it would pay back 50 percent of its aid from the Dutch state early and launch a 7.5 billion euro (US$11.25 billion) rights issue.
The surprise announcement from ING accelerates a move that many analysts had expected, but not for years to come. ING had already set up separate boards to run its banking and insurance units but had denied any plans to split them.
The dismantling process, which is expected to run through 2013, will effectively leave ING as a primarily European operation with some smaller units elsewhere. The company said its balance sheet at the end of the restructuring will be 30 percent smaller than before its government bailout last year.
The restructuring deal between the Commission and ING is the most striking example yet of the deep changes the EU’s executive arm plans to force on banks that received state aid.
A rescue plan for Germany’s second-largest bank, Commerzbank, got the go-ahead from European antitrust regulators in May on the understanding that it divest about 45 percent of its balance sheet. Royal Bank of Scotland and Lloyds Bank Group, 70 percent and 43 percent respectively owned by Britain, are expected to be ordered into disposals by the European Commission.
Belgium’s KBC and Franco-Belgian Dexia are also awaiting rulings from the executive arm of the 27-member EU.
Analysts have feared ING’s restructuring would have to be deeper than the 6 billion to 8 billion euros of asset sales that it announced in April, and in August it warned that that might be the case.
ING said the divestment of the insurance operations would be completed by 2013, through IPOs and or sales. It will also split off some Dutch mortgage operations into a new company that would have about a 6 percent share of the Dutch mortgage market.
Pursuant to the restructuring agreement with the EU, ING also said it will have to sell ING Direct USA, its US online banking business. ING separately said the CEO of ING Direct planned to take early retirement.
Subsequent to a revised agreement with the Dutch state, ING said it would repurchase 5 billion euros in core Tier 1 securities in December. ING received 10 billion euros from the state in October last year.
It will have to repay the aid at 10 euros per share, plus an 8.5 percent coupon payment and a repayment premium of between 333 million and 691 million euros.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS