In a move that seemingly
ensures ING’s ability to repay the final €3bn ($4.3bn) of its
obligation to the Dutch state ahead of its own May 2012 deadline,
ING is to sell its online banking unit ING Direct USA to US bank
Capital One.
The deal will see ING receive
$6.2bn in cash and 55.9m shares in Capital One currently worth some
$2.8bn. At current exchange rates ING will enjoy a capital release
of €2.9bn.
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The sale of ING Direct USA
forms part of ING’s restructuring plan which it filed with the
European Commission in 2009 to obtain the commission’s approval for
the support ING received from the Dutch state in November
2008.
ING received €10bn from the
Dutch state by issuing to it onebn core Tier 1
securities.
ING has already made two
repayments to the Dutch state.
The first was in December
2009 when it repurchased €5bn of the securities and the second in
May 2011 when it repurchased €2bn of the securities. ING paid an
early-repayment premium of €347m on the first repayment and a €1bn
premium on the second.
For its $9bn in cash and
shares Capital One will gain ownership of the US’ twentieth-largest
bank and second-largest direct bank.
At the end of March 2011 ING
Direct USA, now in its 11th year, reported that it had 2,275
employees, and a total of 7.7m customer savings accounts, cheque
accounts, brokerage services accounts and mortgage accounts.
Deposits totalled €57bn and own originated mortgages
€29bn.
The deal will boost Capital
One from its current position as the US’ eighth-largest bank to
fifth. At the end of March 2011 Capital One reported $125.4bn in
deposits and $199.3bn in total assets.
On closure of the transaction
ING will emerge with a 9.9% stake in Capital One, making it the
bank’s largest shareholder. ING will have the right to be
represented by one member on Capital One’s board of
directors.
Under its radical restructuring programme, ING has
formally separated its insurance and banking operations and plans
to embark on separate initial public offers of its European and US
insurance operations when market conditions are
conducive.
