AMSTERDAM Dutch banking and insurance group ING ING.AS will speed up preparations for a stock market listing of its European insurance business next year after just completing the spin-off of its U.S. insurance and investment arm.
ING, bailed out by the Dutch state in 2008, is shedding its insurance, investment management and other assets through disposals or listings and is cutting thousands of jobs to repay state aid and bolster its capital.
Chief Executive Jan Hommen did not rule out alternatives to a listing for the European insurance business such as a trade sale. He said ING had held preliminary discussions on this, but also said other European insurers "are all struggling for capital."
ING spun off ING U.S. Inc (VOYA.N) on May 1 via a $1.3 billion share listing as part of an enforced separation of its global banking and insurance businesses and will sell the rest of its shares in the U.S. unit in further tranches.
"With that milestone completed, we are now accelerating preparations for the base case of an IPO (listing) of our European insurance company, with the aim of being ready to go to the market in 2014," Hommen said.
ING reported a modest recovery in lending to companies in its first-quarter results after this had contracted in the second half of last year.
Policymakers in Europe have put pressure on banks to lend more to companies and households to help to revitalize economic growth.
The bank's net loan growth amounted to 2.5 billion euros ($3.27 billion), of which the bulk - at 1.9 billion euros - was non-mortgage loans. That followed a net fall in lending of 2.9 billion euros in the third quarter and a net drop of 2.5 billion euros in the fourth quarter.
The group reported first-quarter net profit of 1.804 billion euros, up from 728 million euros a year ago and broadly in line with forecasts, driven largely by its banking business and boosted by divestments.
A poll of four analysts commissioned by Reuters gave an average forecast for net profit of 1.777 billion euros, ranging between 1.45 billion and 2.08 billion euros.
ING shares rose 3 percent to trade at the highest level since mid-February.
ING said results at its European insurance business - which includes contributions from units in Japan and South Korea that are up for sale - remained under pressure because of the low-yield environment, reporting operating profit of 79 million euros, down from 129 million euros a year ago.
(Reporting by Sara Webb; Editing by David Cowell and Jane Merriman)