ING to split into two and launch rights issue

”ING

Dutch banking group ING, which was bailed out by the Government in October last year, is to split itself into two separate businesses and launch a €7.5 billion (£6.9 billion) rights issue in a bid to repay some of the €10 billion (£9 billion) it received in aid.

The rights issue will be fully underwritten by Goldman Sachs, JP Morgan and ING itself.

Furthermore, the bank announced today that its chief executive, Dick Harryvan, would be taking early retirement after a career of over 3 decades at the bank.

The bank will split its banking and insurance businesses and once the separation is complete, the Dutch bank plans to sell the insurance division.

Chief executive Jan Hommen said the measures would “provide a clear plan for resolving the uncertainty created by the financial crisis”.

Meanwhile, the bank is expected to report third quarter profits of €750 million, an improvement on the loss of €568 million posted in the same period a year ago.

In January this year, the bank said it was eliminating 7,000 positions from its workforce in a bid to cut costs.

The news of ING’s rights issue comes amid speculation that Lloyds Banking Group is to launch a £12 billion rights issue in a bid to repair its balance sheet following its takeover of HBOS.

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