European Commission Approves ING Restructuring; Opens New Probe

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The European Commission on Friday approved a restructuring plan for Dutch bank and insurer ING made during the financial crisis as compatible with the European Union’s internal market, but also opened an investigation into amendments to the plan.

Friday’s approval followed a court ruling in March that the Commission had failed to show that extra aid granted to the Dutch financial group gave it an advantage over rivals.

The Luxembourg-based General Court, Europe’s second-highest, annulled part of a 2009 decision by the European Commission, which demanded a restructuring plan from ING, including asset sales, before it could approve the aid.

After the original Commission decision, ING said it had had to make hefty concessions, including selling its online bank ING Direct USA in February, no longer being a price leader in some markets and not making acquisitions.

However, the Commission’s approval was based on a restructuring plan submitted in 2009, and since that time, the Dutch state and ING have notified the Commission of amendments to the plan, the Commission said in a statement. The Commission on Friday opened an in-depth investigation into these changes.

“The Commission considers that the complexity of the issues justifies an in-depth analysis,” the EU executive said.

At the same time the Commission said it has appealed the General Court’s judgment to the Court of Justice of the European Union, Europe’s highest court.

The original Commission judgment followed the granting to ING by the Dutch State in the autumn of 2008 recapitalization aid of €10 billion [$12.88 billion], the Commission said. This was followed in March 2009 by an impaired asset measure, which contained a State aid element of €5 billion [$6.44 billion].

In October 2009, the Dutch State changed the repayment conditions of ING’s recapitalization aid, thereby giving ING the option to repay early at more favorable terms, which also contains state aid.

(Reporting By Sebastian Moffett)