ING Groep NV
) has completed the sale of its division - ING Direct UK - to
). The deal was announced in Oct 2012.
ING transferred the division's savings and deposits worth €13.4
billion and mortgages worth €6.4 billion to Barclays as per the
terms of the deal. ING has already recorded the impact of the
transaction in its results for the second half of 2012. Owing to
this deal, ING incurred a loss of €260 million, which is lower
than €320 million expected before. The lower loss on the
investment portfolio stems from positive market trends witnessed
over the last couple of months.
However, the divestment will lead to €280 million worth of
capital increase in the first quarter of 2013, due to the
reduction in risk-weighted assets. This is expected to positively
impact ING bank's core Tier 1 ratio of 11.9% as of Dec 31, 2012
by 12 basis points.
The sale of ING's UK division is part of a series of asset
divesture that the company has been undertaking to pay back the
bailout fund it took from the Dutch government during the 2008
financial crisis. It is also in line with the company's strategic
aim to concentrate more on the core banking segments.
In Nov 2012, ING concluded the sale of ING Direct Canada - the
Internet banking division of ING Bank of Canada - to
The Bank Of Nova Scotia
). Further, in Feb 2012, ING completed the sale of its online
banking unit, ING Direct USA, to
Capital One Financial Corp
For Barclays, the acquisition is an effort to further strengthen
its domestic retail banking business. Amid the bleak
macroeconomic environment, which is clouded with mounting
regulatory restrictions, Barclays has witnessed a decline in
profit in its investment-banking segment. Barclays is in
the process of conducting a strategic review to simplify its
businesses, increase profitability and reduce its over-dependence
on the investment-banking arm.
ING currently retains a Zacks Rank #4 (Sell), while Barclays
holds a Zacks Rank #5 (Strong Sell).
BARCLAY PLC-ADR (BCS): Free Stock Analysis
BANK OF NOVA SC (BNS): Free Stock Analysis
CAPITAL ONE FIN (COF): Free Stock Analysis
ING GROEP-ADR (ING): Free Stock Analysis
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