Chillin' out till it needs to be funded
HSBC just announced its intentions to get rid of Household international or its current HSBC USA operation for $25 bln. Close on the heels of the same, ING is already floated its ING Direct USA ( with its Orange campaign) and received bids close to worth $9 bln. ING already holds a stake in Capital One which has made a stock based offer for the $80 billion in deposits, the largest online bank in the USA. Mortgages constitute another $40 bln and Morts ( Mortgage Backed Securities) a $20 bln.
ING has already received Dutch government cash for its Alt A (Sub Prime) holdings of mortgages and MBS in ING Direct which thus may be transferred to the European parent balance sheet before the sale. Followers expect the deal bidding to get higher. Meanwhile GMAC’s new avatar Ally Financial and CIT are among the bidders for the business. GE Capital has also submitted a bid for near $ 9 bln and its offer is in cash. Regulators are already ruling on bringing GE Capital’s $40 bln deposits under FDIC and banking regulation later today ING has already paid back 7 bln out of 10 bln in state aid but had agreed earlier to get out of the US in exchange for government cash infusion.
Ally had been launched after GMAC Capital went bankrupt in early 2008 and General Motors was wound down under government supervision. GM made its IPO earlier last year clearing the way for Ally to recover its lost roots. ING Direct had been one of the best retail branding operations in recent banking hstory while HSBC had grown size very quickly but fell by the wayside after the HHI sub prime portfolio spun out of control.
ING Australia is worth another $2.5 bln, on the block since May but with a higher Loan Deposit Ratio of 1.5 leaning on fresh mortgages making a sale tougher esp in australia where Business is like on another planet
ING was forced to split its insurance and bank operations and agreed to divest ING Direct USA by 2013 to obtain European Commission approval for 10 billion euros of Dutch state aid received in 2008 during the financial crisis.
Proceeds from the sale would be used to repay the state.
A spokesman for ING in Amsterdam declined to comment on whether GE and Capital One had submitted bids.
“I can confirm that the process to prepare the sale of ING Direct USA is ongoing,” Raymond Vermeulen said on Tuesday.
The Netherlands paid nearly 40 billion euros to rescue the domestic financial sector in 2008 when it was forced to nationalize ABN AMRO and provide capital injections for Aegon and SNS Reaal as well as ING.
ING has already announced several divestments and has paid back part of the state aid. It said it would repay the remaining 3 billion euros by May 2012.