Strategic update: Taking ING back to basics

Jan Hommen, CEO and Member of the Executive Board of ING Group, told an industry conference that ING is making strong progress on its strategy to take ING back to basics. “We made good progress in our efforts to reduce risks, costs and leverage,” he said at the Goldman Sachs Financials Conference in Frankfurt on 4 June 2009. “We are on track to cut expenses by EUR 1 billion this year as we align our cost base with today’s leaner operating environment.”

The economic crisis is fundamentally changing the financial services industry. The future will be marked by less risk taking, more regulation and higher capital requirements. Financial institutions have to make tough choices about how to succeed in this new reality. Simultaneously, earning and maintaining customer trust are more important than ever. That is why ING is making its business less complex, and is focusing on fewer, coherent and strong businesses. Hommen told the conference that ING will divest 10-15 businesses over the coming 3-5 years as market conditions permit. The total proceeds of this exercise are expected to be EUR 6-8 billion. Furthermore, divestments are expected to free up EUR 4 billion in capital. ING’s focus on markets where it has or can achieve leadership positions also means that ING will exit up to 10 of the 48 countries in which it is currently active.

In order to further increase business focus and reduce complexity, the banking and insurance activities will be operated separately under one group umbrella. Operational performance of each of these businesses will be sharpened. Ultimately, the revised strategy intends to create a more customer focused culture, a smaller portfolio of businesses, a simplified business model, clear products and efficient processes.