Dutch insurer ING Groep NV (ING: Quote) Friday revealed its strategy for ING Bank in the coming years and said its priorities for 2012 and 2013 include Dutch State repayment, completion of the EC restructuring requirements and meeting the Basel III capital requirements. ING plans to resume dividend payments only after all remaining core Tier 1 securities have been repaid and Basel III requirements have been met.
The company said it aims to repay remaining core Tier 1 securities as soon as possible, but remains cautious on the ongoing crisis in the eurozone and increasing regulatory capital requirements. From 2013 onwards, ING intends to maintain a minimum core Tier 1 ratio of 10 percent.
Jan Hommen, CEO of the company said, "ING is relatively well positioned to adapt to the challenges the banking industry is currently facing. The divestments we announced last year, together with the liability management exercise we just completed, have strengthened our capital position."
ING also said its focus on achieving true operational excellence will help it to reach a cost-income ratio of 50-53 percent by 2015. Procurement initiatives are expected to save 300 million euros per year by 2015. Customer centricity, operational excellence and balance sheet optimization is anticipated to achieve a return on equity under Basel III rules of 10-13 percent, the company noted.
The company has reduced Southern European sovereign debt in the fourth quarter of 2011 by about 1.2 billion euros, bringing the total reduction for the year 2012 to around 4 billion euros. ING still has remaining positions in Southern European sovereign debt of nearly 2 billion euros.
"While various regulatory changes are limiting banks to grow and both economic and societal trends are putting pressure on margins, we believe ING meets the criteria to succeed in this environment," Hommen added.
On Thursday, ING dropped its plans of an initial public offering for its insurance and investment management businesses in Europe and Asia, citing the uncertain economic outlook and turbulent financial markets. However, the company said it will prepare for a public offering for the U.S insurance and investment management businesses.
In Amsterdam, ING shares are currently trading at 6.25 euros, up 0.97 percent, on a volume of 4.31 million shares.
ING closed Thursday's regular trading at $7.99 on the NYSE.
by RTT Staff Writer
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