Restructuring at ING
ING’s restructuring, which began in 2009, has effectively come to an end with the sale of the company’s remaining stake in NN Group on 14 April 2016.
Here we summarise the key points and moments in ING’s journey from a diversified financial services company to becoming a standalone, leading European bank.
2008 - 2015
In 2008 and 2009, as a consequence of the financial crisis, ING Group, like other major financial institutions in Europe, received state aid from the Dutch State. In order to receive approval from the European Commission (EC) for the Dutch State aid, ING Group together with the Dutch State were required in 2009 to develop and submit a restructuring plan to the EC that included the divestment of ING Group’s insurance and investment management businesses across the world. The sale of ING Direct USA was also included in the package of restructuring measures. This Restructuring Plan was approved by the EC in November 2009. Subsequently, the insurance and investment management businesses of ING Group were operationally separated from ING as of 31 December 2010 for the purpose of divesting it.
2011 - 2015
In line with the Restructuring Plan, ING Group divested a number of businesses around the world from 2011 to 2013, including divestments of insurance and investment management businesses in the United States, Latin America and Asia/Pacific (other than Japan). ING Group had indicated in 2012 that the intended base case for divestment of its European insurance and investment management businesses was through an Initial Public Offering (IPO), while keeping all other options open. In November 2013, ING Group expanded the scope of this intended base case IPO with the inclusion of the Japan Life and Japan Closed Block VA businesses.
On the banking front, ING Direct USA was sold in 2012, meeting a key requirement of the EC Restructuring Plan.
In the course of the continued streamlining of the company’s business portfolio, ING also made other major divestments including ING Direct Canada (2012), ING Direct UK (2012) and ING Car Lease (2011).
In May 2013, ING listed its US insurance and investment management business, Voya Financial, on the New York Stock Exchange and divested 25% of its stake. Following a number of follow-on transactions, the remaining stake was sold by March 2015. Following this transaction, ING Group had effectively eliminated its core debt (group leverage), meeting one of our key commitments in the EC Restructuring Plan.
In July 2014, NN Group, ING’s former European/Japanese insurance and investment management business, was listed on the Euronext Amsterdam stock exchange. Through the listing, ING’s stake in NN Group was reduced to 68.1%. Through a series of follow-on transactions, ING reduced its shareholding to 25.8% by 30 June 2015. ING’s minority stake was deconsolidated in line with IFRS accounting rules. With the divestment of more than 50% of its stake in NN Group and its deconsolidation, ING achieved compliance with the EC divestment conditions before the committed deadline of year-end 2015. In addition, after the deconsolidation of NN Group, the restrictions on acquisitions and on price leadership from the original 2009 Restructuring Plan, and amended in a restructuring agreement with the EC in 2012, no longer apply.
ING announced the sale of its remaining 14.1% stake in NN Group on 14 April 2016, fulfilling the terms of the revised restructuring agreement with the EC as amended in 2012, whereby ING was required to fully divest its shareholding in NN Group before the end of 2016.
ING’s total State aid was repaid in a number of tranches between 2009 and 2014.
On 7 November 2014, ING made the final repayment. This was achieved six months ahead of the repayment schedule agreed with the European Commission in 2012. Total repayments on the aid amounted to EUR 13.5 billion, resulting in an annualised return of 12.7% for the Dutch State.
In 2009, ING agreed to transfer/sell a portfolio of US mortgage securities to the Dutch State. The unwinding of this facility, also known as the Illiquid Assets Back-up Facility (IABF), was completed in early 2014, when the Dutch State sold the remaining securities in the market. This generated a EUR 1.4 billion cash profit for the Dutch State.
Also, in 2009 ING issued Government Guaranteed Notes, which all have been redeemed in full and for which ING paid a total of EUR 0.4 billion in fees to the Dutch State.
The total gross financial benefit to the Dutch State for ING’s support is approximately EUR 5.3 billion.