ING has shelved plans to apply for a banking license in China and plans to exit one of its two insurance joint ventures there, as it looks to shore up its capital needs, a top executive said on Thursday.
The Dutch financial group is also in the process of cutting 900 jobs in Asia-Pacific as part of a plan to cut 7,000 globally, said Hans van der Noordaa, chairman and chief executive of ING'S Asia-Pacific insurance and investment management business.
We are doing a global review of our activities given the fact that we need to, as a company, make sure that we are in line with what I call a new environment, Noordaa told Reuters.
We looked into the opportunities to start our own bank (in China). For the time being it's not on the priority anymore.
Late last year, ING (ING.AS) had said it was looking to expand its business in China and expected to make a decision on whether to apply for a banking license early in 2009.
Noordaa said ING will also exit one of its two joint ventures -- ING Capital Life and Pacific Antai Life Insurance Company -- in China in 2009, part of a global review of its activities to ride out the economic downturn and the credit market crisis.
We are reviewing our position there and I think longer term it would be better when we have one joint venture, he said.
Also, capital is scarce so you have to set your priorities, Noordaa, whose firm has decided not to sponsor the Formula One racing championships after this year's season, said.
The Amsterdam-based banking and insurance group is looking into making divestments outside its core business. The job cuts from a workforce of about 130,000 are aimed at cutting 1 billion euros of costs in 2009.
Noordaa, who was in Mumbai to announce the formal launch of ING's distribution platform for investment products, said the firm had some disappointments in India following a big slump in assets but it remained committed to the country.
ING's India fund unit's assets have dropped almost 74 percent in the year to February compared with the Indian mutual fund industry's asset fall of 11.55 percent. Its chief executive Vineet Vohra and investment director Paras Adenwala have left.
Everybody in the Indian market has to adjust to a new reality. A little bit less growth, Noordaa said, adding that appointing a new CEO and investment head was his top priority.