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The story
History
Origins in insurance and banking
The ING Group traces its roots to two major insurance companies in the Netherlands and the banking services of the Dutch government. Its oldest predecessor was the burial fund Kooger Doodenbos, founded in 1743 in Koog aan de Zaan in North Holland, by nine local men. They declared that they were entering into a contract with one another "for the collection and deposit of funds, which are to be used for a proper burial of the partners of the said contract".
An initial sum of fl. 300 was transferred to the savings bank in 1820, and by 1835 the fund decided to stop distributing its surplus cash and invest it in the bank or in securities instead. In 1949, the Kooger Doodenbos — contributing an insured capital of fl. 30,915 and 229 contracts — merged into Vesta, a birth-benefit life insurer that had relocated from Amsterdam to Arnhem. Through a series of further mergers, it eventually became part of Nationale-Nederlanden.
Insurance branch
On 12 April 1845, the fire insurance company Assurantie Maatschappij tegen Brandschade de Nederlanden van 1845 ("Fire Insurance Company of the Netherlands of 1845") was founded, as approved by King Willem II. The company grew to be the leading Dutch insurance company, opening its first foreign agency in Batavia (now Jakarta) in 1857 and reaching branches across 139 locations worldwide by 1900. It later changed its name to De Nederlanden van 1845.
Two decades later, in 1863, the life insurance company Nationale Levensverzekerings Bank ("National Life Insurance Bank") was founded in Rotterdam. From 1932, the two companies cooperated on group insurance and pension insurance, and in 1938 De Nederlanden van 1845 acquired its first foreign insurer, De Vaderlandsche in Belgium. During World War II, the offices of both companies were bombed and 46 employees were killed. The two firms merged on 3 April 1963, to form Nationale-Nederlanden, combining the country's largest insurer with its second-largest. The new group expanded significantly internationally during the 1970s and 1980s, introducing its iconic orange N logo in 1970. In 1986, Nationale-Nederlanden expanded its portfolio to include the banking sector, becoming the sole owner of the struggling mortgage bank Westland-Utrecht Hypotheekbank.
Banking branch
In April 1881, the Rijkspostspaarbank was created with the statutory task of providing savings opportunities to broad Dutch population by leveraging the existing post-office network into a postal savings system, to encourage workers to start saving. Around 1916, the municipally-run Gemeentegiro Amsterdam (GGA) was established to centralize Amsterdam's municipal cash transactions, opening its services to private individuals in 1918. In 1961, the GGA became the first bank in the Netherlands to issue plastic payment cards (giropassen), and in 1969 it introduced the country's first automated teller machine, installed in Amsterdam's newly built district Bijlmermeer.
In 1918, the Postcheque- en Girodienst (PCGD) was established as part of the state telecommunication company PTT, creating the Netherlands' first national giro-based payment services allowing working families and SMEs to manage their income and expenses through post offices. In 1965, the PCGD became the first fully automated giro system in the world, and in 1979 it took over the GGA, bringing Amsterdam's municipal giro services under national administration. These state-run postal financial services were brought under the official prudential supervision of the Dutch central bank from 1979.
Separately, in 1927 the Nederlandsche Middenstands Bank (NMB) was created through the merger of several institutions — to provide credit to middle-class and SME businesses in the Netherlands and abroad, following the Dutch banking crisis of the early 1920s. During World War II, the Dutch government took over 86% of NMB's capital, and its gradual privatization continued until the turn of the 1980s and 1990s. During the 1960s, NMB increasingly focused on the retail market and expanded internationally.In 1986, the Rijkspostspaarbank and the PCGD were combined to form the single banking entity Postbank, and had more than 7.5 million private account holders. That year, Postbank introduced Girotel, the first electronic home banking system in the Netherlands (by 2006, it had evolved into the internet platform MijnPostbank, used by 2 million customers). The Dutch government formally privatized Postbank in 1987, and it entered the free market subject to restrictions barring it from commercial lending, corporate securities trading and selling insurance — limits that constrained its ability to compete as an independent commercial bank. In 1989, Postbank merged with the NMB to form NMB Postbank Groep, which became one of the five largest Dutch banks of the time.
Merger and formation of ING Group
In 1991, the banking business of NMB Postbank Groep and the insurance business of Nationale-Nederlanden were merged to create the ING Group. The merger, completed on 4 March 1991, was made possible by the liberalization of Dutch financial law in 1990, which permitted cross-ownership between banking and insurance institutions. A decade prior, in 1981, Nationale-Nederlanden and Aegon rescued struggling regional mortgage banks, a move facilitated by the Minister of Finance and considered the first step toward lifting the ban on cross-sector mergers in the Netherlands.
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The newly formed group adopted a bancassurance model, distributing Nationale-Nederlanden's insurance products through Postbank's extensive retail deposit base. The 1990 liberalization made the Netherlands a pioneer in bancassurance, and the rapid emergence of conglomerates like ING prompted the 1990 Protocol, which mandated strict cooperation and information exchange between banking and insurance supervisors. Aad Jacobs served as the group's first chairman, to integrate NMB's SME franchise, Postbank's mass retail deposits and Nationale-Nederlanden's insurance float.
International expansion and major acquisitions
Since its founding, ING Group has grown through a sustained program of acquisitions. Throughout the 1990s, ING broadened its asset management capabilities through the purchase of Parcom (1994) and Clarion (1998), and expanded in insurance through Wellington (1995), Equitable of Iowa (1997, for US$2.2 billion). By then, ING operated in 58 countries and was the Netherlands' largest insurer and third-largest bank. In 1998, ING sold its U.S. general insurance subsidiary, the Netherlands Insurance Group of Cos., to British insurer Guardian Royal Exchange Group for $775 million, while acquiring Guardian's Canadian insurance unit for $375 million.
Banking operations were also strengthened through the acquisitions of Furman Selz for US$600 million, and the gradual purchase of Dutch cash-management specialist Bank Mendes Gans, whose remaining shares ING acquired by 2000, when the company was delisted from the Amsterdam Stock Exchange. Separately, ING acquired Bank Brussels Lambert after launching a bid in 1997 valued at US$4.68 billion, with European Commission clearance granted in January 1998, establishing ING's leading position in the Belgian market. In 1999, ING took over the German BHF-Bank and Canadian Group Underwriters.
The early 2000s brought further geographic expansion: Aetna's financial services and international units (for US$7.7 billion), and ReliaStar (for US$6.1 billion) (both 2000), Seguros Comercial América in Latin America (2001), and DiBa in Germany (2002). In 2004, ING added Alliance of Canada to its insurance portfolio and Rodamco Asia to its asset management operations. In the same year, it agreed to sell most of ING BHF-Bank to the German bank Sal. Oppenheim for €600 million, transferring €6 billion in risk-weighted assets and around 1,800 employees, while retaining certain assets under the name ING Bank Deutschland and selling the London branch to Deutsche Postbank.
Expanding its retail banking business overseas, ING used the direct banking business model it had developed with NMB Postbank to launch direct banking in other countries. The first of these was set up in Canada in 1997 as ING Bank of Canada, and was soon followed in several other countries including the US, UK, Germany, Spain, Italy, France and Australia. In July 2007, ING paid $1.3 billion for the Latin American pensions business of Banco Santander, becoming the region's second-largest behind BBVA and increasing Latin American funds under management to €35.5 billion.
By early 2008, ING Direct had grown to 20 million customers in nine countries, with €210 billion in deposits and close to €90 billion in mortgages, contributing about 7% of group profits in 2006. In 2008, ING acquired CitiStreet — an American retirement-plan and benefit administration company, with more than 14 million participants — from Citigroup and State Street Corporation for €578 million.
Barings Bank
The 1995 purchase of Barings Bank for a symbolic £1 after its dramatic collapse led to a boost in ING's wholesale and investment banking business. Barings was founded in 1762 by Francis Baring, a British-born member of the German–British Baring family of merchants and bankers, and was, after Berenberg Bank, one of England's oldest merchant banks.
In 1995, the 233-year-old bank collapsed after Nick Leeson — the 28-year-old head of Barings Futures Singapore — accumulated £830 million in catastrophic unauthorized losses on Nikkei 225 futures contracts, concealed in an error account. His positions were destroyed by the plunge in the Nikkei following the Kobe earthquake of 17 January 1995. Barings was declared insolvent on 26 February 1995 and Leeson was subsequently sentenced to six and a half years in a Singapore prison. ING acquired Barings for £1, assuming its liabilities and establishing ING Barings — gaining an investment-banking platform, international brand recognition and the historic Barings Archive. In 2001, ING sold the US operations of ING Barings to ABN AMRO for US$275 million. The Barings art collection and the charitable Baring Foundation remain based at ING's London office.
Acquisition of Oyak Bank
In June 2007, ING announced the acquisition of the Turkish bank Oyak Bank for US$2.673 billion, marking its entry into the Turkish market. Oyak Bank, founded in 1984, was among the ten largest banks in Turkey with a market share of around 3%. The bank had a total of 360 branches, 1.2 million active retail customers and 10,000 SME customers. In 2006, the bank reported a pre-tax profit of 165 million Turkish lira (€94.6 million), with total assets of 11.8 billion Turkish lira (€6.77 billion) and a book value of TRY 988 million (€566 million).
Capital injection and divestiture
In 2008, as part of the 2008 financial crisis, ING Group, together with many other major banks in the Netherlands, accepted a capital injection from the Dutch government (see § Government capital injection and state aid below). Following reports of alleged capital shortfalls, on Friday, 17 October 2008, ING's share price fell by more than 27%. ING also recorded a loss of €500 million in the third quarter of 2008, its first quarterly loss ever, and a reported net loss of €729 million for the full year. As a condition of Dutch state aid, the EU demanded changes to the company structure, including the sale of insurance businesses in Latin America, Asia, Canada, Australia and New Zealand, and ING Direct units in the US, Canada, and the UK. This included the sale of the ING Direct US operations to Capital One, ING Direct Canada to Scotiabank (doing business as Tangerine), and the ING Direct UK operations to Barclays Bank in 2012. The spun-off insurance businesses in North America were renamed Voya Financial in 2014.In 2009, Postbank and ING Bank were merged into a single brand, ING. The merger was completed in January 2009 under CEO Nick Jue. The rebranding officially launched on 10 February 2009, costing €890 million and 2,500 jobs, largely driven by Postbank's historical inability to sell complex, higher-margin financial products. In October 2009, ING announced that its insurance arm would again be separated from ING Group. In April 2016, ING sold the last shares in NN Group, making it exclusively a bank again.
Corporate restructuring (2009–2016)
As of 2008, before the onset of the financial crisis, ING provided banking, insurance, and asset management services to more than 85 million customers in over 40 countries. With 125,000 employees and a balance sheet total of €1,332 billion, it was one of the largest financial institutions in the world. The state aid came with stringent conditions. Following consultation with the Dutch government, ING undertook a far-reaching restructuring plan intended to restore its long-term commercial viability while preventing the state aid from excessively distorting competition.
In April 2009, new chief executive Jan Hommen unveiled a "back to basics" strategy under which ING would sell 10 to 15 businesses worth a cumulative €6–8 billion, freeing up an estimated €4 billion in capital and narrowing its lending focus to Europe. A key measure was the sale of all insurance activities by the end of 2013. In addition, ING was required to divest Westland Utrecht Hypotheekbank in order to strengthen competition in the Dutch retail banking market. Finally, ING was temporarily barred from acquiring other companies and from pursuing price leadership.
Splitting of the ING Group
The restructuring process began in 2009. Within the group, the two main divisions were organizationally separated from one another. At the time, the banking business had assets of €912 billion (13th in Europe), while the insurance business had revenue of $64 billion (sixth in the world). Since 1 January 2011, ING Bank has operated as an independent company, separate from ING's insurance and investment management operations.
ING Bank consists of two divisions: Retail Banking and Wholesale Banking (known as Commercial Banking until a rebranding in January 2016). Retail Banking covers retail and direct-banking services for individuals and SMEs in Europe, Asia and Canada. Wholesale Banking provided banking services such as lending, payments and cash management to companies, governments and financial institutions in more than 40 countries.
ING's insurance and asset management activities consisted of life insurance, non-life insurance, pension and investment activities. These activities were split into two further units, one for US operations and one for European operations, each to be listed separately on the stock exchange.
NN Group
Since late 2009, ING weighed how to divest its insurance arm, the NN Group — then estimated to be worth €12–16 billion — under the EU-mandated restructuring. In April 2014, investment companies from Hong Kong and Singapore had already subscribed for €1.3 billion. In May 2014, ING announced that it would bring NN Group to the stock exchange, priced at €20 per share — valuing NN Group on 1 July 2014 at €7 billion. The offering of 77 million shares raised €1.5 billion, and ING retained a stake of 71.4% in NN Group. ING also consolidated its investment management business which was floated and rebranded as NN Investment Partners.
At the time, NN Group employed over 12,000 people in 18 countries and had €168 billion in assets under management. In May 2015, ING's remaining stake in NN Group stood at 42.4%, at which point the European Commission's restrictions on ING regarding matters such as acquisitions and price leadership lapsed.
In April 2016, ING sold its remaining 14% stake in NN Group for €1.4 billion. This marked the final step in ING's five-year restructuring process, after which ING remained a pure banking company. NN Investment Partners was later sold by NN Group — by then fully independent of ING — to Goldman Sachs for €1.7 billion, in a deal completed in April 2022. With its main component Nationale-Nederlanden, the NN Group is active – besides the Netherlands – in Belgium, the Czech Republic, Greece, Hungary, Poland, Romania, Slovakia, Spain, and Japan. Following the 2014 split, ING continued for ten years as a distributor of Nationale-Nederlanden insurance policies for small and medium-sized businesses. From 2024, ING offered business-insurance (motor, contents, legal-expenses, disability) developed with Allianz.
Sale of non-core activities
From 2009 onward, business units that did not fit the new group structure were divested. The proceeds were used to strengthen ING's capital position and to repay state aid. In 2010, ING's Private Banking activities in Asia were sold for €985 million, generating a sale profit of €332 million. The sale of ING's Swiss private-banking unit — which managed €10 billion in client assets — to Julius Baer Group for CHF 520 million ($505 million) closed in the first quarter of 2010, generating a profit of €120 million for ING. In the same period, ING sold its 51% stake in an Australian life-insurance and wealth-management joint venture to ANZ for €1.1 billion.
In August 2010, ING announced the sale of a 50% stake in a portfolio of Canadian industrial real estate. The sale was completed in November 2010 at €1.4 billion including assumed liabilities. At the same time, ING evaluated the potential sale of ING Real Estate Investment Management, then the world's largest real-estate fund manager by assets with €66.4 billion under management; the process required EU state-aid conditions. In February 2011, ING sold the majority of ING Real Estate Investment Management to CB Richard Ellis (CBRE) for $940 million, adding $59.8 billion in assets under management to CBRE's investment platform.
By the end of 2010, ING Group had 107,000 employees, more than 18,000 fewer than at the end of 2008.
In 2011, ING sold ING Car Lease to BMW. The transaction generated proceeds of €696 million, of which half was profit. In 2011, ING completed the sale of its Latin American life insurance and asset management activities to Grupo Sura (see § Latin American divestment). By the end of 2011, ING Group's workforce had further declined by 10,000 to around 97,000 employees.
In February 2012, ING Direct US was sold to the American bank holding Capital One (as announced in 2011). The sale price was €7 billion, part of which was paid in Capital One shares. ING subsequently held a 9.7% stake in Capital One. This transaction resulted in a profit of €0.5 billion for ING.
In December 2012, ING completed the sale of its insurance business in Malaysia to AIA Group. The sale proceeds were €1.3 billion, resulting in a profit of €750 million. This sale was part of ING's plans to divest its Asian insurance and asset management activities. In February 2013, ING sold its life insurance operations in Hong Kong, Macau and Thailand. ING achieved a net book profit of €950 million on the sale. The transaction with the Pacific Century Group, which paid a total of €1.64 billion, had already been announced in October 2012.
In August 2013, ING announced the sale of its life insurance business in South Korea to the investment firm MBK Partners. ING retained an indirect stake of 10% in ING Life Korea and received €1.24 billion. ING recorded a loss of €950 million on the sale. The transaction was completed in December 2013. With this sale, ING had divested the bulk of its Asian insurance activities slated for near-term sale. Its remaining Japanese life insurance business, ING Life Japan, proved unsuitable for a standalone sale and was instead folded into the European insurance divestment timeline (see § NN Group).
Adjustments to the restructuring
ING found it difficult to complete the restructuring plans to have sold its insurance and asset management activities by the end of 2013. In November 2012, ING reached an agreement with the European Commission giving ING more time and flexibility to complete the divestments. The deadline was extended to the end of 2016 or 2018, depending on the region in which the activities were located.
Negotiations for the sale of the Dutch consumer bank Westland Utrecht Bank did not lead to a result. Its commercial activities were incorporated into the retail banking arm of Nationale-Nederlanden, while the mortgage portfolio largely remained with ING Bank. Finally, ING submitted a schedule for the repayment of the remaining €3 billion in state aid plus a 50% premium (€1.5 billion), in four equal instalments between 2012 and 2015.
From Wikipedia’s article on ING Group, shared under CC BY-SA 4.0.7