ING Group has finalised an agreement by which it has agreed to the sale of most of its German banking unit, ING BHF-Bank, to Sal. Oppenheim for € 600 million.
The transaction includes ING BHF-Bank’s asset management, private banking, financial markets and core corporate banking businesses, with a total of € 6 billion in risk-weighted assets, € 600 million in capital (on the basis of German accounting rules) and about 1,800 employees.
Under the terms of the agreement, ING BHF-Bank will return to its old name, BHF-Bank AG. The bank’s board members will transfer to the new company with the exception of CEO Sytse Andringa, who will continue to oversee the businesses remaining with ING, which will operate under the name ING Bank Deutschland AG.
“We are pleased to have reached an agreement to secure the future for ING BHF-Bank and its employees,” said Michel Tilmant, Chairman of the Executive Board of ING Group. “For ING, the sale will release capital from a business that no longer fits into our strategy so it can be reinvested to support the growth of ING’s core businesses.”
ING has also reached agreements in principle to sell the London Branch of ING BHF Bank to Deutsche Postbank and to sell part of ING BHF-Bank’s corporate lending portfolio to HVB Group. Final agreements on those transactions are expected in the coming weeks. All three sales are subject to regulatory approvals and are expected to be completed at year-end.
Following the transactions, ING will retain ING BHF’s 83.7% stake in Deutsche Hypothekenbank (DHB), a restructured loan portfolio of about € 1.3 billion, and ING BHFBank’s private equity activities. ING will also retain the European Business Desk, which serves German subsidiaries of ING’s Benelux banking clients, to continue to provide products and services to ING’s key Wholesale Banking clients. ING’s direct banking business in Germany, ING DiBa, is not affected by these transactions.
For ING Group, the three transactions together are expected to result in a net loss of about € 90 million, to be booked at closing. The transactions will reduce the risk weighted assets at ING’s banking business by € 8 billion and free up about € 500 million in Tier 1 capital, resulting in an increase of 17 basis points in the Tier 1 ratio of ING Bank NV.
Source: ING Group