ING will sell its 51 per cent stake in its wealth management joint venture to partner Australia and New Zealand Banking Group (ANZ), it was announced today.
The Dutch group will receive A$1.7 billion (Ôé¼1 billion) from the sale, of which around Ôé¼300 million will be profit. The deal will also free up Ôé¼900 million of capital. The Amsterdam-based company is shedding a number of assets as part of its global restructuring plan, which was announced in April.
The ING/ANZ joint venture was established in 2002 and was originally scheduled to run until 2012, but when ING received around Ôé¼10 billion in state aid last October, the deal came under review. ING also received a Ôé¼22 billion government asset guarantee in January of this year. It now aims to shed assets worth up to Ôé¼8 billion.
ING's exit from the partnership reflects a growing trend of Western banks leaving Asian operations in order to focus on their domestic operations. Earlier this year, UK-based insurance giant Aviva sold its Australian wealth management business to National Australia Bank for Ôé¼488 million.
Jan Hommen, CEO of ING Group, said: ÔÇ£This transaction is another important step in executing our Back to Basics strategy. The sale of our insurance and wealth management operations in Australia and New Zealand is further proof of our determination to simplify the organisation by focusing on fewer, strong franchises that form a coherent group.
ÔÇ£This shows once more that our continued transformation is well on track.ÔÇØ
ING has said it will, however, continue to focus on life insurance and retirement products in Asia. The deal is separate from the pending sale of INGÔÇÖs Swiss and Asian private banking assets, which is expected to be announced next month and is predicted to fetch more than the ANZ deal.
The joint venture, which had 2,700 employees, managed around A$45 billion (Ôé¼26 billion) in assets and was the number three life insurer in Australia.
The deal is expected to close by the end of this year. ING Australia and ING New Zealand Holdings will now become wholly-owned subsidiaries of ANZ, the Melbourne-based bank said in a statement. It will continue to use the ING brand for up to 12 months while future branding is determined.
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