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ING Group to Sell Stake in Capital One
September 5, 2012
[ by Melanie Gretchen ]
After this coming Monday, ING no longer will be able to answer "Capital One," in response to the question, "what's in your wallet?" That's because the Dutch firm expects to close the sale of its 9% stake in Capital One - a deal that will bring ING €300 million ($378 million). The Dutch financial services firm will sell all of its 54 million shares to the holding company for about $3 billion, which will increase its core Tier 1 ratio to 11.9%. "Tier 1 Ratio" measures a firm's ability to weather financial shocks.
The Dutch firm acquired the Capital One stake in February 2012, when Capital One bought ING Direct USA for $9 billion. Capital One paid for the deal, in part by issuing $2.8 billion worth of new shares to ING - making ING the largest shareholder in Capital One at that time.
Since then, the combined business reported $200 billion in deposits, turning it into the country's 5th-largest bank by deposits, surpassing PNC and TD Bank – and making it worthwhile to sell at this time.
Paydown of Government Bailout from 2008. In 2008, ING received a €10 billion ($12.5 billion) bailoutfrom the Dutch government. In order to pay down the government's stake, ING has been forced to sell several significant assets. Besides the sale of its Capital One stake, the Dutch firm sold its Canadian online bank to local Canadian rival, Bank of Nova Scotia, last month for $3.1 billion. Next it plans to sell its Asian insurance businesses.
For further details, go to [Dealbook, 9/5/12].

