ING Groep NV, the biggest Dutch financial-services company, said the separation of its banking unit from the insurance business, which it’s planning to divest, is proceeding as scheduled.
Today was the deadline for managers of 100 business units in 50 countries to sign off on having insurance and banking operate “at arm’s length,” Eric Robles, who’s in charge of the separation, told reporters in Amsterdam.
ING agreed to split the units by the end of 2013 to gain European Commission approval for a bailout that included 10 billion euros ($13.1 billion) of state aid and the transfer of 21.6 billion euros of U.S. mortgage assets. The firm, which traces its roots to 1743, also agreed to separate its U.S. online banking unit, ING Direct USA, and some Dutch retail banking assets.
Last month, ING said it had changed its “base case” to holding two insurance initial public offerings instead of one, getting separate listings for the U.S. operations and the European and Asian units. The IPOs are likely to take place in 2012, though they may come as early as in the fourth quarter of next year if conditions are favorable, Chief Executive Officer Jan Hommen said at the time.
The company is assessing the effects of the revised scenario, which may lead to additional costs, Robles said today. The 54-year-old in August took over as head of the project that started at the end of 2009, after his predecessor Frans van Houten left to become CEO of Royal Philips Electronics NV.
ING has said it doesn’t plan to divest ING Direct USA, which has been separated from the insurance operations, until 2013. Even so, preparations have been made, according to Robles.
“The design for splitting ING Direct USA from the bank is ready, but won’t be executed for now,” he said.