ING to sell ING Direct USA to Capital One
(Thomson Reuters ONE) -
* Total proceeds of USD 9.0 billion in a combination of cash and shares
* ING to receive USD 6.2 billion in cash and USD 2.8 billion in shares of
Capital One
* Transaction expected to result in capital release at closing of USD 4.1
billion
* ING to have 9.9% stake in Capital One after closing
* ING and Dutch State to adjust Illiquid Assets Back-up Facility
ING announced today that it has reached an agreement to sell ING Direct USA for
a total consideration of USD 9.0 billion (EUR 6.3 billion at current exchange
rates) to Capital One Financial Corporation, a leading US-based financial
holding company. Under the terms of the agreement, ING will receive USD 6.2
billion in cash and USD 2.8 billion in the form of 55.9 million shares in
Capital One.
The divestment is part of ING's restructuring plan which was filed with the
European Commission in 2009 to obtain the Commission's approval for the support
ING received from the Dutch State in the context of the financial crisis.
"Although I regret that ING Direct USA will no longer be a part of ING, I am
very pleased that we have found in Capital One a good home for our customers and
employees who are very important to the continued success of the ING Direct USA
business. It is with confidence that we are taking a stake in Capital One. The
diversified asset base of Capital One combined with the large deposit base and
marketing strengths of ING Direct USA make an ideal combination for a strong
future," said Jan Hommen, CEO of ING Group. "In addition, the transaction today
shows ING is taking decisive steps in the restructuring of ING Group and
underlines our commitment to meet the requirements of the EC in a prudent yet
decisive manner".
After this transaction, ING will focus on further building its ING Direct
operations in Canada, Spain, Australia, France, Italy, Germany, the United
Kingdom and Austria, none of which are impacted by today's announcement or the
EC restructuring requirements. ING Direct USA will retain brand attributes such
as the "orange ball". ING will allow a one-year transitional use of the "ING
Direct" trademark.
Under the terms of the sale agreement ING will receive USD 6.2 billion in cash
and USD 2.8 billion in the form of 55.9 million shares of Capital One, based on
a 10-day backward looking average share price from and including 15 June 2011.
With its pro forma 9.9% stake, ING will become the largest single shareholder in
Capital One. After closing ING has the right to be represented by one member of
the Board of Directors of Capital One.
The sale of ING Direct USA is expected to result in a net positive result of USD
0.7 billion and a capital release at closing of USD 4.1 billion or EUR 2.9
billion at current exchange rates. The transaction is expected to have a
substantial positive impact on ING Bank's core Tier 1 ratio of 99 basis points
at closing, based on the core Tier 1 ratio of 10.01% per 31 March 2011.
ING Direct USA, was launched in September 2000 and has since become the largest
direct bank in the United States. From its headquarters in Wilmington, Delaware,
the 2,275 employees offer 7.7 million customers savings accounts, checking
accounts, mortgages and brokerage services. As of 31 March 2011 ING Direct USA
had EUR 57 billion in funds entrusted and EUR 29 billion in own originated
mortgages. ING Direct USA is the operating name of ING Bank, fsb, a federally
chartered savings bank.
"I am proud of what the management and employees of ING Direct USA have achieved
over the past 11 years in setting a new standard in the US banking industry",
said Eli Leenaars, ING's CEO Retail Banking Direct and International. "I am
confident that ING Direct USA, with the support of Capital One, will continue to
be successful in the US market place. ING will continue to build on the
innovative and successful ING Direct model outside of the US in its quest to
become the world's most preferred consumer bank."
Capital One is one of the leading financial services companies in the United
States. Through its subsidiaries Capital One offers a broad spectrum of
financial products and services to 45 million consumers, small businesses and
commercial clients in the US, Canada and the UK. The company is one of the top
10 largest US banks by deposits and serves its customers primarily through a
banking network of approximately 1,000 branches in New York, New Jersey, Texas,
Louisiana, Maryland, Virginia and the District of Columbia.
ADJUSTMENT OF ILLIQUID ASSETS BACK-UP FACILITY
In connection with the sale of ING Direct USA, ING has reached an agreement with
the Dutch State to adjust the structure of the Illiquid Assets Back-up Facility
(IABF).The amendment serves to delink the IABF from ING Direct USA by putting
ING Bank in its place as counterparty for the Dutch State. The IABF is further
amended to ensure a continued alignment between ING and the State regarding
exposure to the Alt-A portfolio.
Under the original transaction terms agreed between ING and the State in January
2009 the State assumed the risk on 80% of the Alt-A mortgage securities of ING
Direct USA and ING Insurance Americas. Only the part covering ING Direct USA,
which currently covers approximately 85% of the total portfolio, is adjusted in
the agreement announced today and the text below only refers to this part. The
ING Insurance part of the IABF remains unaltered.
Under the terms of the original transaction the Dutch State receives 80% of all
cash flows from the portfolio and a guarantee fee from ING. In return, the state
pays a funding fee and management fee to ING. ING Direct USA held on its balance
sheet a receivable from the Dutch State along with the remaining 20% of the Alt-
A portfolio, ensuring an alignment of interests between ING and the Dutch state
regarding the performance of the portfolio.
Under the terms of the agreement announced today, the government receivable will
be transferred from ING Direct USA to ING Bank. In return, ING Direct USA will
receive on its balance sheet an amount in cash from ING Bank. Also, after the
sale of ING Direct USA, ING Bank will receive the funding fee and management fee
from the Dutch State and pay the guarantee fee.
The 20% of the Alt-A portfolio not covered by the IABF will remain on the
balance sheet of ING Direct USA and will move to Capital One as part of the sale
of ING Direct USA. In order to ensure continued alignment between the interests
of ING and the Dutch State with regard to the Alt-A portfolio, ING will provide
a counter guarantee to the Dutch State covering 25% of the 80% part of the Dutch
State. This guarantee will cover realised cash losses if they would exceed the
35% that is implied by the current market value of the portfolio. This
adjustment will therefore lower the risk exposure for the Dutch State. The
potential capital and P&L impact of the alignment for ING Bank is expected to be
limited.
The sale of ING Direct USA to Capital One and the transaction with the Dutch
State are expected to close in the fourth quarter of 2011 and are subject to
regulatory consent.
ING's commercial finance activities and ING's insurance operations in the United
States will be unaffected by this transaction. As announced earlier, ING
continues to prepare its US retirement and life insurance businesses for an IPO
as part of the agreement with the European Commission to completely separate its
Banking and Insurance operations and divest the latter. More details on the IPO
programme will be made available if and when appropriate.
NOTE FOR EDITORS
Jan Hommen will address the announcements made today in an analyst and investor
conference call at 8:00 a.m. CET on Friday 17 June 2011. Members of the
investment community can join at +31 20 794 8500 (NL), +44 20 7190 1537 (UK) or
+1 480 629 9031 (US) and via live audio webcast atwww.ing.com.
A media conference call will be held at 9:00 a.m. CET on Friday 17 June 2011.
Journalists are invited to join the conference at +31 20 794 8500 (NL) or
+44 20 7190 1537 (UK) and via live audio webcast atwww.ing.com.
Press enquiries Investor Inquiries
Carolien van der Giessen Raymond Vermeulen Investor Relations
+31 20 541 6522 +31 20 541 5682 +31 20 541 5460
Carolien.van.der. Raymond.Vermeulen(at)ing.com Investor.relations(at)ing.com
Giessen(at)ing.com
About ING
ING is a global financial institution of Dutch origin offering banking,
investments, life insurance and retirement services. As of 31 March 2011, ING
served more than 85 million private, corporate and institutional clients in more
than 40 countries. With a diverse workforce of about 105,000 people, ING is
dedicated to setting the standard in helping our clients manage their financial
future.
Important Legal Information
Certain of the statements contained herein 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) the implementation of ING's restructuring plan to
separate banking and insurance operations, (4) 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, (5) the frequency and severity of
insured loss events, (6) changes affecting mortality and morbidity levels and
trends, (7) changes affecting persistency levels, (8) changes affecting interest
rate levels, (9) changes affecting currency exchange rates, (10) changes in
general competitive factors, (11) changes in laws and regulations, (12) changes
in the policies of governments and/or regulatory authorities, (13) conclusions
with regard to purchase accounting assumptions and methodologies, (14) changes
in ownership that could affect the future availability to us of net operating
loss, net capital and built-in loss carry forwards, and (15) ING's ability to
achieve projected operational synergies. 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.
pdf version of press release:
http://hugin.info/130668/R/1524158/460040.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#1524158]
Unternehmensinformation / Kurzprofil:
Datum: 16.06.2011 - 22:47 Uhr
Sprache: Deutsch
News-ID 55638
Anzahl Zeichen: 12539
contact information:
Town:
Amsterdam
Kategorie:
Business News
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