Struggling to stay in the black amid bad loans and declining margins, Netherlands-based ING says it is considering selling off its very successful Canadian operations.
The development has led many banking industry observers to speculate that Canada’s top five banks will soon be competing to scoop up the Dutch bank’s Canadian operations when the parent company finally puts it up for sale.
On Thursday, ING released an announcement indicating that it was mulling over the possible sell-off of its Canadian and UK operations.
“ING continuously evaluates its portfolio of business, in line with its stated objective of sharpening its focus," the bank said in a statement issued Thursday. "Within this context, ING today announced that it is currently reviewing strategic options for ING Direct Canada and ING Direct UK.
“These review may or may not lead to transactions, and no decisions have yet been made in this regard,”
ING entered the Canadian scene in 1997 with a no-fuss, no-fee banking to customers who have grown weary with the escalating fees that local banks have saddled them for years. The online-focused Dutch upstart did not have any bricks-and-mortar branches but rather managed high-interest saving, chequing accounts and mortgages online and allowed withdrawals and deposits through ATMs.
It's phenomenal growth in high-ratio insured mortgages, through the broker channel, suggests buyers may queue up for an opportunity to buy, said analysts Thursday.
Still, despite considerable success in Canada, ING owes three billion euros representing the remaining bailout money it got from the Dutch state during the 2008 financial crisis.