Reuters logo
UPDATE 1-ING Direct USA split plans on hold pending EU case
December 1, 2010 / 4:51 PM / in 7 years

UPDATE 1-ING Direct USA split plans on hold pending EU case

* ING wants to keep unit, faces EU order to sell by 2013

* EU trial on state aid ongoing, may impact EU orders

* ING still reviewing real estate inv. management options

(Adds ING comment, background)

By Gilbert Kreijger

AMSTERDAM, Dec 1 (Reuters) - Dutch bancassurer ING ING.AS has put on hold the separation of its online bank ING Direct USA pending a European court case on state aid against the European Commission, it said on Wednesday.

ING has to divest ING Direct USA by 2013 as part of European Commission approval for 10 billion euros ($13.09 billion) of Dutch state aid received in 2008.

But the bank is challenging some Commission calculations and would like to keep the U.S. unit.

The group is splitting into a bank and two insurance units, which ING plans to list in the fourth quarter of 2011 or later, and will have bank and insurance units operate independently from Jan. 1. ING Direct USA will remain part of the bank for the time being.

“We have the designs to disentangle ING Direct USA from the rest of ING’s banking activities ready since July. However, implementation has been put on hold because the entanglement with the rest of the Bank is limited and relatively easy to solve,” Eric Robles, who leads the ING separation process, told reporters.

ING and the Dutch state in January objected at a European court in Luxembourg to European Commission calculations on how much state aid it has received. If ING wins it may have to divest less business.

“If the ruling comes we will see what consequences it will have and what we will do,” said Robles.

The court may take up to 30 months to make a ruling and an ING spokesman said the sale of ING Direct USA, which has been split from insurance, was one of the last things to do by 2013.

ING Direct taps into consumer demand for online savings products but its U.S. unit has been a cause for worry because savings were invested in U.S. mortgage products, which have fallen in value since the credit crisis.

The unit had 231 billion euros of funds at the end of September, of which a quarter was at ING Direct USA. The U.S. unit contributed 43 percent to ING Direct’s third-quarter underlying profit.

Robles said he was not working to separate ING Real Estate Investment Management, which is part of the bank.

“Whether there will be a sale, initial public offering or something else is not part of the separation process that I am responsible for,” Robles said.

The ING spokesman reiterated the company was still reviewing options for its real estate investment management unit, while sources told Reuters in July ING may need to break up the unit to conclude a timely sale. [ID:nLDE665055] ($1=.7639 Euro) (Editing by Jon Loades-Carter)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below