Dutch banking and insurance group ING said Monday it plans to restructure its business, selling off its insurance operations and raising up to 7.5 billion euros to pay back government emergency funding.
“ING announced today that it will move towards a separation of its banking and insurance operations, clarifying the strategic direction for the bank and the insurance company going forward,” the group said in a statement.
In order to repay government funds extended at the height of the global financial crisis, “ING plans to launch a capital increase … of up to 7.5 billion euros” (11.25 billion dollars).
Chief executive Jan Hommen said the fund raising “is a critical component of the measures we announced today to regain our independence and to chart a clear course forward.
“With investors’ support, we will be able to repay half of the funds we received last year from the Dutch state and maintain our capital strength,” he said.
The company will repay some five billion euros in state aid plus 950 million euros in interest on the 10 billion euros the government extended to the group in October 2008 and January this year to help it through the worst of the global financial crisis.
ING said the European Commission also required it to pay the state another 1.3 billion euros as it returned the emergency funding.
The company said that preliminary figures showed it earning a net profit of 500 million euros in the three months to September.