ING: Insurance Regulatory and Financial Issues May Prove Difficult in Divesting Insurance Business

ING warns that regulatory and financial issues could hamper plans to divest its insurance business via public offerings next year.
ING Groep NV, the global financial institution based in the Netherlands, has sold its U.S. online bank for $9 billion dollars after being forced by the European Commission to reduce its balance sheet by 45% as a condition for €10 billion that it received in financial crisis aid. Now, ING is preparing to spin off its insurance arm, but market volatility and stricter capital rules for insurance could unsettle its IPO plans.[1]

Regulatory concerns, market volatility and stricter capital rules for insurance could unsettle ING's IPO plans.
According to Dow Jones Newswires, ING Chief Executive Jan Hommen warned that the sale of its online bank, ING Direct USA, to Capital One Financial Corp. was complicated by regulatory and financial issues. Hommen is concerned that the process of divesting the insurance business could be just as difficult.

Analysts indicate that, in preparing for the proposed IPOs, ING will face a series of obstacles and that such divestments carry a 'material execution risk.'[2]

ING intends to separate its insurance and asset management businesses into newly created units, and restructure its capital base for the U.S. and European businesses.

Reports suggest that the divestments will ultimately cut ING's €1.3 trillion balance sheet in half, and reduce it from a global financial giant into a European-focused bank deriving the bulk of its business from Belgium, the Netherlands and Luxembourg.

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1ING Says Insurance IPOs May Be As Complex As Selling Web Bank, Maarten van Tartwijk, Dow Jones Newswires.
2. Willaim Elderkin, Soceite Generale, according to Dow Jones Newswires.

1 comment:

  1. It may only affect a part of the market segment. Although the regulatory concerns can make insurers think twice about their implemented policies.

    ReplyDelete