Chillin' out till it needs to be funded
The insurance assets have to be separated from banking as per a covenant with the Dutch government. additionally ING has to reurn $5 bln to the Dutch government before it is allowed to pay Dividend. The Asian operations are spread across North Asia, Thailand, Malaysia and India , with probably negligible direct presence in China in Banking. The $6 bln sale outlined is for the valuation of its insurance ASia assets, Goldman Sachs leading the deal and JP Morgan also appointed Advisor the bank will meanwhile llok to list its combined European insurance and investment operations.
Jan Hommen, the bank’s CEO had earlier advised a single wealth unit across insurance and investment funds management for both Europe and Asia to satisfy Dutch regulators(ctv.ca) but apparently demand in the business for an IPO are not sufficient. Anyway, not much details were enclosed and plans were dropped for the IPO and a single Wealth entity for insurance and funds. China is expecting to focus on double digit growth in insurance premiums as per the new regulator. Swiss RE estimates all of Asia to grow at 12%, while Europe and Us grow at 3% (Reuters) The 6 bln size is a first figure from last year’s EV estimates by the bank itself. Value in the sale is unlikely to be realised unless interesting pieces are sold independently.
Leaders AIA and Prudential have “high” less than 10% consolidated of Asia market shares apparently excluding india entirely where both are in a different regulatory regime , playing as partners to local promoters. HSBC is selling its GIC assets in Singapore, China and Hongkong. Local Chinese insurers had earlier bid for AIA business before a successful $11 bln IPO finally pulled it out of the woods since AIG led the 2008 collateral debacle into government ownership.
Prudential has already walked into anti trust blocks for its earlier bulking up purchases last year, and local regulators at country levekl are likely to go deep into ant trust for allowing sales in a sensitive domestic markets.