The Netherlands ING Group said on Thursday that it plans to divest operations worth up to €8 billion ($10.6 billion) to reduce risk and will focus its banking activities on Europe.
ING, which was loss-making in 2008 and got a €10 billion ($13.3 billion) injection from the Dutch state last October, said in a statement it wants to divest non-core activities worth €6 billion to €8 billion ($7.98 to $10.6 billion), or 10 to 15 businesses.
The Group also said its insurance business would in future focus on life insurance and retirement services globally. It had previously targeted divestments of €2 to €3 billion ($2.66 to $3.98 billion) and had already sold a stake in ING Canada.
ING, the biggest Dutch bank and insurance group measured by balance sheet assets, joins banks such as Royal Bank of Scotland and U.S. Citigroup, which are cutting operations after being hit by the credit crisis and getting state aid.
“It is making us focus on, first of all, making sure we get through the crisis but also to set ourselves up after the crisis. To have a position in markets where we can lead,” ING Chief Executive Jan Hommen told reporters.
ING said it would wind down its retail bank operations in the Ukraine, review life insurance activities in China and Japan and strengthen activities in Poland, Romania and Turkey.
It will continue ING Direct, its global online savings bank. Hommen also said it would keep its ING Direct operations in the United States and Germany, where it operates ING-DiBa, as they are part of its growth strategy.
ING will split up its real estate operations, making its property investment management activities part of a global investment management unit. Hommen said it may team up this unit with peers in the future.
“We see in the global investment management area the focus, the consolidation. By separating the business out, and making it a standalone for-profit organization we have a potential to play a role in that consolidation process,” he said.
He also said ING’s first quarter results were “significantly better” than in the fourth quarter of 2008, when ING booked a loss of €3.7 billion ($4.92 billion), but declined to say whether ING was profitable in the first quarter.
(Additional reporting by Aaron Gray-Block, Editing by John Stonestreet and Hans Peters)
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