ING to raise EUR 7.5 billion to repay govt restructure
The Dutch financial institution plans to sell off its insurance operations to pay back state aid that was extended to the group in October 2008.The Hague – Dutch banking and insurance group ING said Monday it plans to restructure its business, selling off its insurance operations and raising up to EUR 7.5 billion to pay back government emergency funding.
"ING announced today that it will move towards a separation of its banking and insurance operations, clarifying the strategic direction for the bank and the insurance company going forward," the group said in a statement.
In order to repay government funds extended at the height of the global financial crisis, "ING plans to launch a capital increase ... of up to EUR 7.5 billion" (USD 11.25 billion).
Chief executive Jan Hommen said the fund raising "is a critical component of the measures we announced today to regain our independence and to chart a clear course forward.
"With investors’ support, we will be able to repay half of the funds we received last year from the Dutch state and maintain our capital strength," he said.
The company will repay some EUR 5 billion in state aid plus EUR 950 million in interest on the EUR 10 billion the government extended to the group in October 2008 and January this year to help it through the worst of the global financial crisis.
ING said the European Commission also required it to pay the state another EUR 1.3 billion as it returned the emergency funding.
The company said that preliminary figures showed it earning a net profit of EUR 500 million in the three months to September.
AFP / Expatica