* Reclassifies Asian insurance as "held for sale"
* Asian insurance operations are worth about $7 billion
* Q2 net profit 1.17 bln euros vs 1.34 bln forecast
* Shares down 2 pct vs 0.4 pct fall in insurance index
By Sara Webb
AMSTERDAM, Aug 8 (Reuters) - Dutch banking and insurance group ING now expects a quick sale of parts of its $7 billion Asian insurance business as it seeks to repay state aid and meet European requirements for its 2008 state bail-out, its chief executive said on Wednesday.
ING is also preparing to list its European and U.S. insurance units on stock markets as part of the restructuring that will break apart its once fashionable bancassurer business model.
"The sales process for our insurance and investment management businesses in Asia is on track," Jan Hommen told a results conference call.
"You will see some units go quicker than others, joint ventures take more time (to sell) ... Certain things will go relatively quickly," he said.
The group got 10 billion euros ($12.4 billion) of state aid during the banking crisis four years ago and is now having to sell assets to meet the conditions set by the European Commission for its bailout and to repay the Dutch government.
But a person close to the situation told Reuters that Canadian insurer Manulife and AIA, Asia's third-biggest insurer, are the only bidders left who might want to take on ING's entire Asian insurance unit - excluding ING's annuities business in Japan - and they have put in unattractive bids.
That leaves the scenario of a three-way split of ING's insurance assets into Southeast Asia, South Korea and the attractive pieces of the Japanese business, a strategy which could net ING a higher overall price and which could speed up the divestment process, the source said.
ING reclassified its Asian insurance and investment management operations as "held for sale" when it reported its second-quarter results earlier on Wednesday.
"We think the reclassification of Asia into 'discontinued operations' suggests that one or more transactions are imminent," Deutsche Bank analyst Spencer Horgan said in a note.
ING was disappointed by the bids for the Korean operations, nervous about Japan, and happy with the interest in the Southeast Asian business, one person familiar with the process told Reuters on Wednesday.
"They are not in a big hurry to sell the asset management business," the source added.
A second source said that ING is keen to find a solution for Japan before finalising buyers for its South Korea and Southeast Asian operations.
ING's chief executive declined to comment.
Earlier on Wednesday the group reported lower than expected earnings as its bank was hit by losses and provisions on loans, mainly in Spain and Greece, two countries at the centre of the euro zone debt crisis, and its insurance unit was hurt by a weak performance in Belgium, the Netherlands and Luxembourg, or Benelux.
Net profit fell 22 percent to 1.17 billion euros, below the lowest forecast given in a Reuters poll of analysts. ING shares were down 2 percent by 1158 GMT, trailing a 0.4 percent fall in the STOXX Europe 600 Insurance index and 0.1 percent fall in the bnking sector index.