* Sale of insurer could raise 2 billion euros
* Bank hopes to carry out sale within two months
* Listing marks end of five-year period of restructuring
(Adds share sale, market cap estimates)
By Thomas Escritt
June 5 Dutch bank ING aims to list its
insurance arm within two months, it said on Thursday, in one of
the biggest European public share offers of the year which will
complete the bank's enforced reformation since its state
bail-out five years ago.
Chief Executive Ralph Hamers said that NN Group, the
insurance subsidiary which had a book value of 14.7 billion
euros ($20 billion) at the end of the first quarter, would be
floated "within one to two months", if market conditions allow.
Bankers close to the deal said NN's initial public share
offer (IPO) could net the bank up to 2 billion euros, valuing
the insurer at around 8 billion euros.
Two bankers estimated the market valuation for the insurance
business would be between 7 billion and 8.5 billion euros
"This signals the launch of the final major transaction in
ING's five-year restructuring," said Hamers. "With the IPO of NN
Group we will have substantially completed the repositioning of
ING to a pure bank."
ING said the insurer, which has a strong position in the
Dutch domestic market, a substantial European presence,
operations in Japan and a global investment management business,
would pay a one-off dividend of 175 million euros next year on
profits in the second half of 2014.
Hamers said the listing was expected to take place "within
one to two months time, but we are not in a hurry."
NN Group made an operating profit of 905 million euros in
2013 on gross written premiums of 9.5 billion and from results
for 2015 onwards intends to pay out 40 to 50 percent of the net
operating result in dividends, NN Group's chief executive Lard
"We are a leading Dutch insurer with a strong European
footprint and a strong Japanese business," Friese said, adding
that the company would focus on its Dutch business, targeted
international growth, and on cash-generating businesses.
SALE OF ONE-TIME MAINSTAY
The bank valued the insurer's Netherlands Life business at
5.6 billion euros and the Insurance Europe business at 3.1
billion euros. The fund management business had 168 billion
euros in assets under management in March.
The insurance business was ING's mainstay before the
financial crisis, when it was a leading proponent of the then
fashionable bancassurance business model.
But ING, then one of the world's largest banks, was forced
to take a 10 billion euro bail-out from the Dutch state during
the crisis and has already radically reshaped itself to comply
with the terms of the rescue, shedding investment banking
operations and cutting thousands of jobs.
The bank is due to pay back its final tranche of state aid
with a 1.025 billion euro payment in May 2015, a move that could
allow the bank to resume paying dividends.
ING has also spent 850 million euros on boosting the
insurance arm's capital ahead of the share offer and the
insurer's defined benefit pension plan was made financially
independent in the first quarter of the year, at a cost of 541
Three Asian investors - private equity firm RRJ Capital,
Singapore state investor Temasek and its unit SeaTown -
are already due to take part in the share offer as anchor
investors having already invested 1.125 billion euros in the
ING said it aims to have sold more than 50 percent of its
shareholding in the insurer before the end of next year and the
remaining shares before the end of 2016.
(Additional reporting by Anthony Deutsch and Freya Berry;
Editing by Matt Driskill, Greg Mahlich)