Brussels starts probe into ING state support repayment

Brussels is to launch an investigation into changes in the way ING agreed to repay Dutch state support given to the financial services group during the financial crisis.

Competition commissioner Joaquin Almunia said in a statement on Friday the investigation would focus on three aspects of the case: changes to the repayment schedule, problems with the divestment of Westland Utrecht Bank and the possible misuse of state aid by ING Direct in Italy.
ING was ordered to divest large parts of its operations in return for a €10bn bail-out in 2008. The money could be repaid within three years with a 50% premium or converted into shares.
Early repayment
However, the government allowed ING to repay €5bn of the debt early, at an interest rate of up to 22%. The Commission ruled this amounted to an extra €2bn in state aid and imposed extra conditions on the bank.
In March, the European court of justice ruled that part of the European Commission’s decision to force ING to sell some operations in return for state aid was wrong.
Alumnia plans to appeal against the court ruling.
‘If ING works with the investigation, it will be over quickly,’ the Financieele Dagblad quoted the commissioner as saying.
FT: ING shake-up ruling to be challenged

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