Scotiabank planning to scoop up ING
TORONTO—Scotiabank plans to scoop up Canada’s eighth-largest bank, ING Bank of Canada, from Netherlands-based parent ING Group for $3.13 billion in cash.
ING would continue to operate separately under the deal announced yesterday and keep the same branding—popularized in ads in which viewers are exhorted to “save your money”—for at least 14 months.
“ING will now benefit from a strong, stable Canadian owner who will provide additional resources to continue to expand and to grow,” Scotiabank president and CEO Rick Waugh said on a conference call with analysts held just after the deal was announced.
“For Scotiabank, this will provide us with a new source of incremental earnings beginning in the first year, as well as $30 billion in retail deposits of 1.8 million customers to further diversify our funding,” he noted.
Waugh added ING’s portfolio will help Scotia solidify its No. 3 position in the Canadian deposit space.
ING Direct president and CEO Peter Aceto said ING—which has no physical branches—would continue to operate under its current no-frills banking model and as a separate entity from Scotia.
“For our customers, we expect no change . . . we will continue to offer our customers the highly-competitive and attractively-priced products that we have become known for, and we will be continuing our efforts to earn more customers with our focus on Canadians who are self-directed,” he pledged.
Parent company ING Groep NV has been struggling to keep its balance sheet healthy amid bad loans and declining margins.
It has been in the news for getting bailed out by the state—it still owes three billion euros in remaining bailout money from the Dutch government from the 2008 financial crisis.
It announced earlier this summer that it was putting its Canadian division under review for a potential sale.
Scotiabank also is announcing a public offering of 29 million common shares at $52—for gross proceeds of $1.5 billion—to fund the acquisition.
The deal, which is subject to regulatory approval, is expected to close by December.