ING Groep NV said Thursday it plans to sell operations worth about 8 billion euros ($10.6 billion), taking ING back to basics on all levels, CEO designate Jan Hommen said.
ING bank is moving to refocus its business, reduce risk and boost up its capital after receiving 10 billion euro from the Dutch government last October. It will keep its assets in Europe, including retail banking in the Benelux and Central Europe.
It is making us focus on; first of all, making sure we get through the crisis but also to set ourselves up after the crisis. To have a position in markets where we can lead, ING Chief Executive Jan Hommen told reporters, according to Reuters.
ING had previously said it would make 2 billion to 3 billion euros worth of divestments globally, moving its focus to life insurance and retirement services, Reuters reported. It had already sold a 70 percent stake in ING Canada for 1.4 billion euros.
Analysts were pleased that ING gave clarity on its strategy, and had chosen to focus on its strengths, according to Reuters.
â€œBack to basics, de- risking of the balance sheet and the raising of disposals with a capital relief of 4 billion euros -- that is more than I dared to hope for,â€ said Christian Vondenbusch, a portfolio manager at Robeco Asset Management , according to Bloomberg.
Theodoor Gilissen analyst Tom Muller said, â€œING can allocate capital to its most profitable activities, boosting profitability in the long run, he told Reuters. However he says that although the move may hurt earnings per share may hurt a little, its risk are deduced.
Along with the Dutch bank, Royal Bank of Scotland is also cutting operations after being hit by the credit crisis and getting government aid.
ING said Tuesday it has no plans to sell its direct banking operation ING-DiBa, saying it was part of the companyâ€™s strategy.
Recently, Amsterdam-based Company reported fourth-quarter loss of 3.71 billion euros. Hommen said the first quarter was significantly better than the fourth, according to Bloomberg.