ING Groep NV plans to sell shares of its former U.S. insurance unit, Voya Financial Inc., reducing the bank’s stake to 19 percent from about 32.5 percent.
ING, the biggest Dutch bank, is selling 34.5 million shares in New York-based Voya, the lender said yesterday in a statement. That stake is valued at $1.38 billion, based on Voya’s share price of $39.99. Voya has agreed to buy $175 million of its stock, according to the statement.
“Repurchasing shares is an effective way to manage capital and demonstrates our confidence in our plans,” Voya Chief Executive Officer Rod Martin, 62, said on a conference call last week.
The Dutch company, which once had insurance operations from Brazil to Malaysia, has been winding down its stake in Voya after taking a bailout in the financial crisis. The Amsterdam- based firm first sold Voya shares in an initial public offering in 2013 at $19.50 apiece.
ING shares rose as much as 1.9 percent and were up 1.4 percent to 11.16 euros at 9:50 a.m. in Amsterdam trading today, extending their gains since the start of the year to 10.5 percent.
ING returned a final 1.03 billion euros ($1.3 billion) in bailout money and premiums on Nov. 7. The combined market value of ING’s stakes in NN Group NV and Voya was 7.9 billion euros as of Nov. 5, providing the firm with “substantial financial flexibility,” ING said in a statement on that date.
ING has said it plans to resume dividend payments for the first time since 2008 after returning a 10 billion-euro bailout. The firm plans to return at least 40 percent of earnings to investors for 2015, CEO Ralph Hamers said on Nov. 5.
The Netherlands came to the rescue after the firm suffered losses on U.S. mortgage-backed securities during the financial crisis. In exchange for approval of the aid, the company was ordered by European Union regulators to dispose of its insurance assets, which include a 68 percent stake in NN Group NV, by the end of 2016.