Cost-cutting CEO slices ING in two

AMSTERDAM (Reuters) - Jan Hommen, the veteran cost-cutter who earlier this year took the reins at ING Group NV, the Dutch bancassurer bailed out by the government, has made the ultimate cut.

ING said on Monday it would split itself in two, disposing of its insurance operations over the next four years and raising 7.5 billion euros ($11.3 billion) in a rights issue.

The restructuring is part of a deal with the European Commission following the 10 billion euros ($15.01 billion) of state aid ING received to help it through the global financial crisis.

“The complexity of ING did not help us during the crisis,” Hommen said on Monday.

To the end, though, he defended the bank’s model, saying bancassurance was a proven and viable business strategy even as he moved to split the business up.

Hommen, 66, the former chairman of ING’s supervisory board, was nominated as CEO on January 26 this year. He took over formally for a four-year term in April.

He was seen as the steady hand who could right ING’s ship following the government bailout, and his reserved Dutch manner was for some a welcome contrast with predecessor Michel Tilmant, whose slicked-back hair and ubiquitous pocket handkerchief made him a model of the well-heeled European banker.

Unlike Tilmant, who pushed for higher salaries for top management, Hommen has led a regime of austerity in compensation at the company, taking no salary himself thus far.

A 1970 graduate of Tilburg University in the southern part of the Netherlands, Hommen’s background is in accounting, with much of his professional career spent in the United States.

Before ING, he was well known as a chief financial officer with a talent for controlling costs, first at aluminum giant Alcoa and then at Royal Philips Electronics.

He is also known widely for his work ethic -- a favorite anecdote in the Dutch press is of his first day at Philips, when he showed up so early for work the building was still locked.

($1=.6664 Euro)

Editing by Jon Loades-Carter