Dutch lender ING’s US online banking business ING Direct USA has
been sold to Capital One for $9bn.

ING’s divesture of its online banking business in the US
market was ordered by the European Commission (EC)
following ING’s receipt of a €10bn ($14bn) bail-out by the Dutch
government. The deadline set was 2013.

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Of the $9bn, ING will receive $6.2bn in cash and the remainign
amount in shares of Capital One, which amount to 55.9 million
shares and a 9.9% stake in the US-based financial holding
company.

ING will thus become the largest shareholder in 1,000 branch-
and 45m customers-strong Capital One.

Hommen: “I regret sale”

ING’s CEO Jan Hommen said he regretted the sale, but emphasised
that he was “very pleased” to have come to an agreement with
Capital One.

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“It is with confidence that we are taking a stake in Capital
One. The diversified asset base of Capital One combined with the
large deposit base and marketing strengths of ING Direct USA make
an ideal combination for a strong future,” he said.

ING is now instead going to focus on its direct banking
businesses in Canada, Spain, Australia, France, Italy, Germany, the
United Kingdom and Austria, markets where ING does not need to
scale back its business as they were not outlined as part of the
EC’s restructuring requirements.

The sale of ING Direct’s US business comes
after the unit returned to profit in fiscal 2010 with a pre-tax
income of €648m versus a pre-tax loss of €7m in the previous
year.

Funds entrusted at the unit increased by 11.3%
to €58bn.

At group level, total deposits at ING Direct
grew in fiscal 2010 by 9.6% to €238.1bn.

Key statistics of ING Direct USA:

  • launched in 2000;
  • 2,275 employees;
  • 7.7m savings/current accounts, mortgages, brokerage
    services;

 

Capital One is also rumoured to bid for HSBC’s US credit card
business.

HSBC is trying to divest its US card business as part of its
strategy to focus on profitable markets and cut costs.

Although profitable, HSBC’s US card business
does not meet the bank’s desired ROE of between 12-15% and has thus
been labelled as non-core. However, North America was HSBC’s least
profitable region in terms of pre-tax profits as of year-2010:
Having lost $7.74bn in 2009,
HSBC’s US arm posted a profit before tax of $454m.