September 25, 2009 / 1:36 AM / 10 years ago

UPDATE 2-ING to sell Australia, NZ jv to ANZ for $1.6 bln

* Will sell 51 pct stakes in ING Australia, New Zealand

* Sale at 1.1 bln euros; expects profit of 300 mln euros

* Deal expected to close in Q4

* ANZ shares resume 0.4 pct lower (Adds background on ANZ, asset sales)

By Ben Berkowitz and Morag MacKinnon

AMSTERDAM/SYDNEY, Sept 25 (Reuters) - ING ING.AS said it will sell its 51 percent stakes in ING Australia and ING New Zealand to joint venture partner ANZ (ANZ.AX) for $1.6 billion in cash as part of its global restructuring.

ING Groep NV, which received 10 billion euros ($14.7 billion) in state aid last October and a 22 billion euro government asset guarantee in January, is raising 6-8 billion euros through asset sales as part of a restructuring plan announced in April.

The sale announced on Friday is separate from the pending sale of ING’s Asian and Swiss private banking assets, which sources have told Reuters is not likely until next month. That sale is expected to fetch slightly more than the ANZ deal. [ID:nSIN97619]

ING said it would book a net profit of 300 million euros on the deal, which will also free up 900 million euros of capital.

ING Chief Executive Jan Hommen said in a statement that the sale of the insurance and wealth management operations in Australia and New Zealand was part of a drive to simplify the organisation “and focus on fewer, strong franchises that form a coherent group.”

The joint venture was formed in 2002 and has 2,700 employees. It describes itself as the No.2 life insurer in Australia and the market leader in New Zealand.

ING said it will continue to focus on life insurance and retirement services products in Asia.

Of Australia’s big four banks, Australia and New Zealand Banking Group Ltd is considered to have the lightest local presence in Australia’s booming wealth management market, estimated to be worth some A$1.1 trillion.

Last month, ANZ paid $550 million for some Asian assets of distressed U.K. lender Royal Bank of Scotland (RBS.L).

Australian banks have been beefing up their presence in the local wealth management industry.

National Australia Bank Ltd (NAB.AX), the top lender, acquired the majority stake of Goldman Sachs’ (GS.N) wealth management operations in Australia two months ago.

ANZ expects a Tier 1 ratio of 9.5 percent after the ING deal, among the highest of Australia’s big banks. Chief Executive Mike Smith is ambitious in his growth plans to make it a super-regional bank in Asia.

ANZ also said the deal would result in a writedown of A$130-A$150 million in 2010.

The sale is expected to close by the year-end.

ANZ shares resumed trading after an earlier halt, slipping 0.4 percent, while the broader market was down 0.8 percent by 0204 GMT. (Editing by Ian Geoghegan)

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