Dutch financial services group ING Groep NV (AMS:INGA) said on Wednesday it had concluded the sale of its UK-based online banking business ING Direct UK to Barclays Plc (LON:BARC) for a non-specified sum.
The divestment aligns with ING’s ongoing business portfolio review, serving its strategy to sharpen banking focus and enhancing its capital position, the vendor said.
Under the terms of the deal, announced in October 2012, ING had transferred GBP11.6bn (USD17.5bn/EUR13.4bn) of the unit’s savings and deposits along with GBP5.5bn of mortgages to Barclays.
The seller noted that the ING Direct subsidiaries in Australia, Austria, France, Germany, Italy and Spain are not affected by the transaction and neither is the ING Commercial Banking business in the UK.
The group went on to say it had recorded a combined loss of EUR260m (USD339m) as a result of the disposal, which is less than the previously expected EUR320m thanks to favourable market circumstances. The sale will result in a capital release of some EUR280m in the first quarter of the year, which in turn would positively affect ING Bank’s core Tier 1 ratio.
Dutch banking group ING Groep NV (AMS:INGA) on Tuesday said it had agreed to shed its British online banking business ING Direct UK to Barclays Plc (LON:BARC), without disclosing the value of the transaction.
The move is part of ING’s ongoing business portfolio review, serving its strategy to sharpen banking focus, the vendor said.
The agreed terms call for ING to transfer ING Direct UK’s GBP10.9bn (USD17.5bn/EUR13.5bn) savings deposits and its GBP5.6bn mortgages to Barclays, with the buyer to integrate these operations into its retail and banking division in the UK.
In a comment, ING’s CEO Jan Hommen pointed out that ING Direct UK’s new owner will continue providing the same services to the unit’s 1.5m customers in the UK.
Set up in 2003, ING Direct UK has some 750 employees as at 31 August 2012.
Its current parent expects a capital release of around EUR330m and a transaction loss after tax of some EUR320m from the disposal, which it sees to have a neutral impact on its core Tier 1 ratio.
ING Bank will keep part of its UK investment portfolio worth EUR9bn as of 31 August 2012, while liquidating another part of it to facilitate the transaction. The deal will not affect the ING commercial banking operations in the UK, the vendor said.
Subject to regulatory approvals, the transfer if ING Direct UK’s operations is seen to complete in the second quarter of 2013.