ING reaches agreement on amended EC Restructuring Plan
(Thomson Reuters ONE) -
* Extended time horizon and increased flexibility to complete divestments of
Insurance/IM
* WestlandUtrecht activities to be merged with banking operations of
Nationale-Nederlanden
* State capital to be repaid in 4 equal tranches including 50% premium
* First tranche of EUR 1,125 million to be repaid on 26 November
ING announced today that, together with the Dutch State, it has reached an
agreement with the European Commission on significant amendments to the 2009
Restructuring Plan. The amendments extend the time horizon and increase the
flexibility for the completion of divestments and adjust other commitments in
light of the market environment, economic climate and more stringent regulatory
requirements.
As part of the agreement, ING has filed a schedule for repayment to the Dutch
State of the remaining EUR 3 billion in core Tier 1 securities plus a 50%
premium, in four equal tranches in the next three years. A first tranche of EUR
1,125 million will be paid on 26 November 2012.
"Since launching our Back to Basics programme in 2009, we have worked hard to
safeguard our financial strength, simplify our organisation and further
strengthen the focus on our customers, ensuring they are at the heart of
everything we do," said Jan Hommen, CEO of ING Group. "For our employees, the
past years of restructuring and insecurity have not been easy. We realize that,
against a backdrop of enormous changes in the financial sector and society at
large, our work is far from done."
"We are pleased that the agreement announced today gives us more time and
flexibility to complete the required restructuring while leaving our strategic
objectives unchanged. We will ensure that we maintain the momentum of the
programme as we have demonstrated in the past four years. We will continue our
efforts to improve our performance, serving our customers, managing risks and
controlling expenses to make sure that when the circumstances are right, we will
be ready for the next steps."
DIVESTMENT PROGRAMME
As part of the approval by the European Commission in November 2009 for the
State support received from the Dutch State during the financial crisis, ING was
committed to divest all of its Insurance and Investment Management operations,
ING Direct USA and WestlandUtrecht Bank by the end of 2013.
The operational separation of the Insurance and Banking activities was completed
at the end of 2010, the Latin-American Insurance/IM operations were sold in
2011, the sale of ING Direct USA was completed in February 2012, the first three
sales of the Asian Insurance/IM units were announced in October 2012 and this
month ING U.S. filed the registration statement for its IPO. Since the start,
ING has incurred over EUR 500 million in expenses in executing the Restructuring
Plan.
Under the amendments announced today, the ultimate dates for divesting the
insurance and investment management businesses have been extended. The
divestment of more than 50% of the Asian Insurance/IM operations has to be
completed by year-end 2013, with the remaining interest divested by year-end
2016. The divestment of at least 25% of ING U.S. has to be completed by year-end
2013, more than 50% has to be divested by year-end 2014, with the remaining
interest divested by year-end 2016. The divestment of more than 50% of
Insurance/IM Europe has to be completed by year-end 2015, with the remaining
interest divested by year-end 2018. As ING has committed to eliminate double
leverage, proceeds from the divestments will be used to that end, provided they
are not needed to maintain the leverage of the remaining insurance businesses.
The base case scenario for Insurance Europe and ING U.S. is to become standalone
businesses through an IPO process. The actual timing of divestments will depend
on market conditions and readiness including performance. The process to divest
the remaining units in Asia is on-going. Any further announcements will be made
if and when appropriate.
WESTLANDUTRECHT BANK
Under the terms of the original Restructuring Plan, ING was required to divest
WestlandUtrecht Bank, comprising mainly of certain mortgage, savings,
investments and consumer lending activities. However, due to market
circumstances and changing regulatory requirements, divestment of
WestlandUtrecht has proved not to be feasible.
Under the amended terms of the Restructuring Plan, the commercial operations of
WestlandUtrecht Bank will be combined with the retail banking activities of
Nationale-Nederlanden, which is to be divested as part of Insurance/IM Europe.
The integrated retail banking business will operate under the 'Nationale-
Nederlanden' brand, resulting in a competitive retail bank in the Dutch market
with its own funding capabilities and a broad distribution network. Nationale-
Nederlanden Bank will offer a broad and coherent product line, with mortgages,
savings, bank annuities, investments and consumer credit products, combined with
the core retail insurance products of Nationale-Nederlanden.
ING has committed itself to ensuring Nationale-Nederlanden Bank reaches certain
targets for mortgage production and consumer credit until 31 December 2015 or
until the date on which more than 50% of the Insurance/IM Europe operations have
been divested, whichever date comes first. Furthermore, ING has agreed on a
maximum ratio for mortgage production at ING Retail Banking Netherlands in
relation to mortgage production of Nationale-Nederlanden Bank until year-end
2015.
Of WestlandUtrecht Bank's EUR 36.4 billion Dutch mortgage portfolio, EUR 2.6
billion will be transferred to Nationale-Nederlanden Bank. ING Bank will retain
the remaining EUR 33.8 billion mortgage portfolio and in relation to this will
contribute EUR 350 million to the capital of Nationale-Nederlanden Bank. To
service existing WestlandUtrecht Bank labelled mortgages, insurance policies and
real estate finance agreements, part of WestlandUtrecht Bank will become a
separate entity within ING Retail Banking Netherlands.
Part of the employees of WestlandUtrecht Bank will transfer to Nationale-
Nederlanden Bank while another part will remain at the separate WestlandUtrecht
Bank entity within ING Retail Banking Netherlands. Unfortunately, this
reorganization will result in a number of redundancies, the full extent of which
will become clear in the next few months. The measures mentioned above will be
taken in accordance with local regulations and will be discussed with the
applicable stakeholders.
REPAYMENT OF DUTCH STATE
Since receiving EUR 10 billion in capital support from the Dutch State, ING has
consistently strengthened its capital position. Shareholders' equity has more
than doubled since 30 September 2008 and the bank core Tier 1 ratio of 12.1% as
of 30 September 2012 was 85% higher than that of 30 September 2008. At the same
time, ING has made good progress in repaying the capital support from Dutch
State. On the original EUR 10 billion in core Tier 1 securities issued in
November 2008, ING has paid over EUR 9 billion to the Dutch State of which EUR
7 billion in principal and over EUR 2 billion in interest and premiums.
Under the terms of the agreement announced today, ING commits itself to repaying
the remaining EUR 3 billion core Tier 1 securities at a total cost of EUR 4.5
billion, consisting of principal, premiums, accrued interest and coupon payments
would they be triggered by potential future dividend payments. The repayment is
scheduled in four equal tranches of EUR 1,125 million each. ING has notified the
Dutch State that it will pay the first tranche of EUR 1,125 million on 26
November 2012. This payment has been approved by the Dutch Central Bank (DNB).
After this tranche, ING will have paid to the Dutch State more than the original
capital support of EUR 10 billion, including EUR 7.8 billion in principal and
EUR 2.4 billion in interest and premiums.
A second tranche will be paid in November 2013, the third in March 2014 and the
final tranche will be paid ultimately in May 2015. After the last payment, ING
will have paid EUR 13.5 billion to the Dutch State, with a total annualised
overall return for the State of 12.5%. It remains ING's ambition to repay the
remaining support as quickly as possible and ING intends to accelerate
repayments if possible and prudent under the prevailing economic circumstances.
All actual repayments are conditional upon the approval of DNB.
OTHER COMMITMENTS
The 2009 Restructuring Plan included restrictions on acquisitions and price
leadership for certain products in EU markets. These restrictions will continue
to apply until 18 November 2015 or until the date on which more than 50% of
each of the Insurance/IM operations has been divested, whichever date comes
first.
The price leadership restrictions in Europe will be amended to reflect specific
conditions in various local markets. Under the amendments, the constraint will
no longer apply in the Netherlands and ING Direct will refrain from offering
more favourable prices than its best priced direct competitor among the ten
financial institutions having the largest market share in the respective
countries.
The calling or buy back of Tier-2 capital and Tier-1 hybrids will continue to be
proposed for authorization to the European Commission on a case by case basis
until ING has fully repaid the core Tier 1 securities to the Dutch State, but
ultimately until 18 November 2014, whichever date comes first. Notwithstanding
this restriction, ING will be allowed to call the EUR 1.25 billion ING
Verzekeringen NV hybrid (ISIN XS0130855108) and intends to do so per 21 December
2012.
The agreement announced today has been formally approved by the European
Commission. As a result of the agreement, the Commission will close its formal
investigations as announced on 11 May 2012. ING will withdraw the appeal at the
General Court of the European Union that it filed in July 2012. For principal
legal reasons the European Commission will continue with its appeal against the
General Court ruling of March 2012. However, ING, the Dutch State and the
European Commission have agreed that any outcome of this procedure will not
affect the agreement as announced today.
NOTE FOR EDITORS
Jan Hommen will address the announcements made today in an analyst and investor
conference call
at 9:30 CET. Members of the investment community can join the conference call at
+31 20 794 8500 (NL), +44 20 7190 1537 (UK) or +1 480 629 9676 (US) and via live
audio webcast at www.ing.com.
A press conference will be held at 11:00 CET. Journalists are invited to join
the conference at ING Amsterdamse Poort, Bijlmerplein 888, Amsterdam.
Journalists can also join in listen-only mode at
+31 020 531 58 46 (NL) or + 44 20 3365 3210 (UK) and via live audio webcast at
www.ing.com.
For the media, ING has moving and still images available of the Amsterdamse
Poort building, which is ING Group's head office since September 2012. Please
visit the mediakit at www.ing.com for pictures that are free to use. Footage (B-
roll) can be downloaded via VideobankOnline.com, or requested by emailing
info(at)videobankonline.com.
Media enquiries Investor enquiries
Raymond Vermeulen ING Group Investor Relations
+31 20 576 6369 +31 20 576 6396
Raymond.Vermeulen(at)ing.com Investor.Relations(at)ing.com
Frans Middendorff
+31 20 576 6385
Frans.Middendorff(at)ing.com
ING PROFILE
ING is a global financial institution of Dutch origin, offering banking,
investments, life insurance and retirement services to meet the needs of a broad
customer base. Going forward, we will concentrate on our position as an
international retail, direct and commercial bank, while creating an optimal base
for an independent future for our insurance and investment management
operations.
IMPORTANT LEGAL INFORMATION
Certain of the statements contained in this document are not historical facts,
including, without limitation, certain statements made of future expectations
and other forward-looking statements that are based on management's current
views and assumptions and involve known and unknown risks and uncertainties that
could cause actual results, performance or events to differ materially from
those expressed or implied in such statements. Actual results, performance or
events may differ materially from those in such statements due to, without
limitation: (1) changes in general economic conditions, in particular economic
conditions in ING's core markets, (2) changes in performance of financial
markets, including developing markets, (3) consequences of a potential (partial)
break-up of the euro, (4) the implementation of ING's restructuring plan to
separate banking and insurance operations, (5) changes in the availability of,
and costs associated with, sources of liquidity such as interbank funding, as
well as conditions in the credit markets generally, including changes in
borrower and counterparty creditworthiness, (6) the frequency and severity of
insured loss events, (7) changes affecting mortality and morbidity levels and
trends, (8) changes affecting persistency levels, (9) changes affecting interest
rate levels, (10) changes affecting currency exchange rates, (11) changes in
investor, customer and policyholder behaviour, (12) changes in general
competitive factors, (13) changes in laws and regulations, (14) changes in the
policies of governments and/or regulatory authorities, (15) conclusions with
regard to purchase accounting assumptions and methodologies, (16) changes in
ownership that could affect the future availability to us of net operating loss,
net capital and built-in loss carry forwards, (17) changes in credit-ratings,
(18) ING's ability to achieve projected operational synergies and (19) the other
risks and uncertainties detailed in the risk factors section contained in the
most recent annual report of ING Groep N.V.
Any forward-looking statements made by or on behalf of ING speak only as of the
date they are made, and, ING assumes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information or for
any other reason. This document does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities.
PDF version of press release:
http://hugin.info/130668/R/1658957/536946.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ING Group via Thomson Reuters ONE
[HUG#1658957]
Unternehmensinformation / Kurzprofil:
Datum: 19.11.2012 - 08:08 Uhr
Sprache: Deutsch
News-ID 204828
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