ING plans to divest up to Eu8bn in assets as CEO takes group back to basics

ING plans to divest up to Eu8bn in assets as CEO takes group back to basics

Dutch financial services group ING, which received a Eu10bn ($13.2bn) bailout from the Dutch government in October last year, plans to divest up to Eu8bn of its assets as part of a strategy to reduce risk and refocus the organisation on its core business.

The move was well received by investors, sending ING's shares up 8.2% to Eu5.69 in early morning trading.

ING says it plans to sell between ten and 15 businesses "over time and as market conditions permit" which is expected to raise between Eu6bn and Eu8bn. The divestment should free up Eu4bn in capital, ING said.

The Dutch banking and insurance group had previously targeted divestments of between Eu2bn and Eu3bn, with Eu1.4bn achieved through the sale of ING Canada.

The asset sale comes as part of a plan by Jan Hommen, the new CEO of ING who took over from Michel Tilmant in January after the firm announced a fourth-quarter loss of Eu3.71bn and further tapped the government rescue fund, to reduce complexity within the group.

Part of the plan involves operating its banking and insurance businesses separately under the group umbrella.

"We are taking ING back to basics on all levels," said Hommen. "The crisis has reinforced the need for us to be even more in touch with our customers. We will be focusing on fewer but more transparent products. This will result in a company that is easier for customers, motivational for employees and more predictable for shareholders."

The firm, which has already completed half of its 7,000 job cuts and plans to reduce costs by as much Eu1bn this year, said its insurance business will focus on life and retirement business in the US, Benelux countries, central Europe, Latin America and Asia/Pacific.

In the US ING will move its variable annuity and fixed annuities business to low risk rollover products, divest its financial products division and will also review its life insurance activities in China and Japan.

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