Less than 10 years ago the International Netherlands Group, with its orange lion emblem, was the embodiment of finance rampant. Its banking, insurance and also asset management activities and presence have spread internationally. At present, as it surfaces early from a state-led bail-out hastened by its considerable portfolio of U.S. mortgages, it is again an example—however, this time of the type of organization that new, more challenging prudential standards encourage.
ING is now almost entirely a bank, more focused than before on Europe, with total income in 2013 around a third of that in 2007. While rivals such as Commerzbank or Royal Bank of Scotland still struggle to adapt to the new regulatory strictures, ING is ready to roll.
It has meant wrenching change. ING promptly repaid €5 billion ($6.3 billion at the time) of the €10 billion the state injected into it in 2008, raising €7.5 billion to do so. Further repayments followed, along with hefty interest and fees. A final €683m in principal is likely to be repaid ahead of schedule this year, assuming the European Central Bank’s impending review of big banks’ books goes well. The state will have earned a tidy €3.5 billion on its loans, plus €1.4 billion on the €24 billion in American mortgages it took off ING’s hands.
Still harder were the requirements of the European Commission, which told ING to hive off insurance and shrink. It sold off not only insurance operations from Argentina to South Korea but also direct banking in America, Canada and Britain, private banking, asset management, custody services and more—conducting more than 50 transactions in five years, says Patrick Flynn, its chief financial officer. It still owns 32% of its American insurance arm (floated in 2013 as Voya) and 68% of the European-cum-Japanese version (floated in 2014 as NN Group), but will sell down the latter from January. Including the market value of the insurance stakes it still holds, ING realised some €40 billion.