ING REIM to be ‘divested’ by 2014

ING Group plans to hive off its indirect property management business within four years as part of wider plans to split the banking and insurance giant into two.

The Dutch financial services group revealed yesterday it is separating its insurance business to concentrate on its core banking operations following pressure from the European Commission over the €10 billion of state aid it has received.

As ING Real Estate Investment Management is part of the global investment business, it would be divested before the end of 2013. 

Victorina de Boer, spokeswoman for ING, said the separation meant that all insurance and investment management activities would be “divested” over time through IPOs, or sales, or a combination of the two.

However, she also stressed the group was undertaking an ongoing strategy to create a global investment manager which would form part of its insurance business. This strategy would run concurrently with the strategy to divest the businesses.

She added: “At this point we are evaluating how (the divestment) is going to happen. It depends on the market circumstances and investor appetite. ING will work very carefully and be very thoughtful about how to manage (the separation) to make sure it supports the interest of the business, customers and employees.”

ING’s investment management business currently has €403 billion in assets under management. It has one of the largest real estate investment platforms in the world with approximately $65 billion of assets under management.

ING has already announced plans to split its indirect property fund business from the direct real estate division, which now comes under the core banking unit and will not be divested under the current strategy.

Yesterday, ING also said it planned to raise €7.5 billion in equity to help it repay the €10 billion provided by the Dutch government as well as to help meet other requirements.