Dutch banking group ING selling US online bank to Capital One
ING announced on 16 June 2011 that it has reached an agreement to sell ING Direct USA for a total consideration of US$9.0 billion (€6.3 billion) to Capital One Financial Corporation, a leading US-based financial holding company.
The sale will help ING Group repay the remainder of the money it owes to the Dutch government for a 2008 bailout. It is the latest move in Capital One's transformation from a credit card company into a major consumer bank.
ING Direct USA is the 20th-largest US bank and taking over its assets would bump Capital One up two places in the bank rankings to make it the country's seventh-largest lender by assets, according to SNL Financial, a financial services data firm.
ING has been restructuring since receiving a €10 billion bailout from the Dutch government in 2008. The European Commission and ING agreed on a restructuring plan in late 2009. The most surprising part of the plan was a mandate that ING sell its US online banking operations.
Last month ING paid €3 billion to the Dutch state, which included a 50% premium, and said at the time that it would repay the remaining €3 billion by May 2012. But with the proceeds from selling its US unit, ING could repay the remainder much sooner.
Early repayment is an important step for the company: once it is free of state restrictions, a European ban on acquisitions will be lifted and ING will have more pricing flexibility, allowing it to better compete.
Source: EuroNews Date: 17.06.2011 [296]
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