Dutch financial services group ING is to split off its insurance activities and continue as a bank following what the Financial Times describes as ‘intense pressure’ from the European commission about state aid.
ING announced on Monday morning it is to ‘completely separate’ its banking and insurance operations. The structure and make-up of the board will also be revised, the company said in a statement.
The plans form part of the restructuring demanded by Brussels following its investigation into state aid at a number of European banks.
The restructuring will cut ING’s balance sheet by about 30%. ING said it hoped to have full commission approval for the revamp before its extraordinary shareholders meeting on November 25.
The process will begin next year and be completed by 2013. It is not yet clear if the insurance arm is to be sold or floated on the stock exchange. All ING’s investment management activities and ING Direct USA are to be sold as well.
ING said it is still committed to the ING Direct model in other countries.
At the same time, ING is to issue €7.5bn in new shares. Some €5bn of the proceeds will be largely used to pay back part of its €10bn state loan, the company said in another statement.
ING also said preliminary figures show it had made net profit of €750m in the third quarter of this year.
Sources in Brussels told the Financieele Dagblad competition commissioner Neelie Kroes did not think ING had been unfairly treated and pointed to the restructuring requirements placed on Commerzbank and West LB.
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