Dutch financial services group ING Group said on Thursday it plans to divest operations worth up to €8 billion ($10.65 billion) to reduce risk and will focus its banking activities on Europe.
ING, which was loss-making in 2008 and got a €10 billion injection from the Dutch state last October, said in a statement it wants to divest non-core activities worth €6 billion to €8 billion, or 10 to 15 businesses.
ING, which also said its insurance business would in future focus on life insurance and retirement services globally, had previously targeted divestments of €2 billion to €3 billion and had already sold a stake in ING Canada (IIC.TO).
ING, the biggest Dutch bank and insurance group measured by balance sheet assets, joins banks such as Royal Bank of Scotland and US Citigroup, which are cutting operations after being hit by the credit crisis and getting state aid.
“It is making us focus on, first of all, making sure we get through the crisis but also to set ourselves up after the crisis. To have a position in markets where we can lead,” ING Chief Executive Jan Hommen told reporters.
ING said it would wind down its retail bank operations in the Ukraine, review life insurance activities in China and Japan and strengthen activities in Poland, Romania and Turkey.
It will continue ING Direct, its global online savings bank, and Hommen said its ING Direct operations in the United States and Germany, where it operates ING-DiBa, were part of its growth strategy.
ING will split up its real estate operations, making its property investment management activities part of a global investment management unit and Hommen said it may team up this unit with peers in the future.
“We see in the global investment management area the focus, the consolidation. By separating the business out, and making it a standalone for-profit organization we have a potential to play a role in that consolidation process,” Hommen said.
He said ING’s Q1 results were “significantly better” than in the Q4 of 2008, when ING booked a loss of €3.7 billion, but declined to say whether ING was profitable in the first quarter. (Reuters)