ING to cut staff after banking, insurance split
ING, the largest Dutch financial services group, is to cut more than 2,000 jobs worldwide as it prepares to separate its banking and insurance operations in difficult markets.
The cuts, which equate to 2.5 per cent of ING’s workforce, come as banks across Europe shed staff in a reassessment of their businesses after the financial crisis.
Swiss bank UBS announced last month it was to cut 10,000 jobs as it winds down its fixed income division, while Deutsche Bank increased its job cut target to almost 2,000 staff.
ING, which missed third-quarter net profit forecasts by a wide margin yesterday, is dismantling its once-fashionable bancassurer model as a condition of the state bailout it received in 2008. It is also divesting insurance and investment management operations and other assets through disposals or stock market listings as it prepares to repay the aid and bolster its capital.
ING said it was to cut 1,350 out of a total 12,000 full-time equivalent jobs at its European insurance operations and 1,000 at commercial banking, out of 10,500 worldwide. It employed a total 94,000 people at the end of June.
The company said the redundancies would be made over two years. It was not clear when they will start.
The restructuring would “increase the agility” of ING and in an uncertain environment, chief executive Jan Hommen said.
The bank will complete the disposal of overseas operations, selling its ING Direct in the UK and Canada, in a retreat to its home market, he said. The group has already sold a stake in Capital One, the US bank holding company.
ING expects annual savings of €260 million from 2015 onwards in the banking business and savings of about €200 million by the end of 2014 in insurance, Hommen said.
Speaking to Reuters Insider, chief financial officer Patrick Flynn did not rule out further cuts.
“We will continue to look at what is in the interests of ING’s investors and take the appropriate decisions,” he said.
ING announced last year it was to cut 2,700 jobs, or 10 per cent of staff, at its Dutch retail banking operations in the face of deteriorating markets, following similar announcements by Dutch rivals ABN AMRO and Rabobank.