ING GROEP NV

Origins in insurance and banking

The ING Group traces its roots to two major insurance companies in the Netherlands and the banking services of the Dutch government. Its oldest predecessor was the burial fund Kooger Doodenbos, founded in 1743 in Koog aan de Zaan in North Holland, by nine local men. They declared that they were entering into a contract with one another "for the collection and deposit of funds, which are to be used for a proper burial of the partners of the said contract".

An initial sum of fl. 300 was transferred to the savings bank in 1820, and by 1835 the fund decided to stop distributing its surplus cash and invest it in the bank or in securities instead. In 1949, the Kooger Doodenbos — contributing an insured capital of fl. 30,915 and 229 contracts — merged into Vesta, a birth-benefit life insurer that had relocated from Amsterdam to Arnhem. Through a series of further mergers, it eventually became part of Nationale-Nederlanden.

Insurance branch

On 12 April 1845, the fire insurance company Assurantie Maatschappij tegen Brandschade de Nederlanden van 1845 ("Fire Insurance Company of the Netherlands of 1845") was founded, as approved by King Willem II. The company grew to be the leading Dutch insurance company, opening its first foreign agency in Batavia (now Jakarta ) in 1857 and reaching branches across 139 locations worldwide by 1900. It later changed its name to De Nederlanden van 1845.

Two decades later, in 1863, the life insurance company Nationale Levensverzekerings Bank ("National Life Insurance Bank") was founded in Rotterdam. From 1932, the two companies cooperated on group insurance and pension insurance, and in 1938 De Nederlanden van 1845 acquired its first foreign insurer, De Vaderlandsche in Belgium. During World War II, the offices of both companies were bombed and 46 employees were killed. The two firms merged on 3 April 1963, to form Nationale-Nederlanden, combining the country's largest insurer with its second-largest. The new group expanded significantly internationally during the 1970s and 1980s, introducing its iconic orange N logo in 1970. In 1986, Nationale-Nederlanden expanded its portfolio to include the banking sector, becoming the sole owner of the struggling mortgage bank Westland-Utrecht Hypotheekbank.

Banking branch

In April 1881, the Rijkspostspaarbank was created with the statutory task of providing savings opportunities to broad Dutch population by leveraging the existing post-office network into a postal savings system, to encourage workers to start saving. Around 1916, the municipally-run Gemeentegiro Amsterdam (GGA) was established to centralize Amsterdam's municipal cash transactions, opening its services to private individuals in 1918. In 1961, the GGA became the first bank in the Netherlands to issue plastic payment cards ( giropassen ), and in 1969 it introduced the country's first automated teller machine, installed in Amsterdam's newly built district Bijlmermeer.

In 1918, the Postcheque- en Girodienst (PCGD) was established as part of the state telecommunication company PTT, creating the Netherlands' first national giro-based payment services allowing working families and SMEs to manage their income and expenses through post offices. In 1965, the PCGD became the first fully automated giro system in the world, and in 1979 it took over the GGA, bringing Amsterdam's municipal giro services under national administration. These state-run postal financial services were brought under the official prudential supervision of the Dutch central bank from 1979.

Separately, in 1927 the Nederlandsche Middenstands Bank (NMB) was created through the merger of several institutions — to provide credit to middle-class and SME businesses in the Netherlands and abroad, following the Dutch banking crisis of the early 1920s. During World War II, the Dutch government took over 86% of NMB's capital, and its gradual privatization continued until the turn of the 1980s and 1990s. During the 1960s, NMB increasingly focused on the retail market and expanded internationally.

In 1986, the Rijkspostspaarbank and the PCGD were combined to form the single banking entity Postbank, and had more than 7.5 million private account holders. That year, Postbank introduced Girotel, the first electronic home banking system in the Netherlands (by 2006, it had evolved into the internet platform MijnPostbank, used by 2 million customers). The Dutch government formally privatized Postbank in 1987, and it entered the free market subject to restrictions barring it from commercial lending, corporate securities trading and selling insurance — limits that constrained its ability to compete as an independent commercial bank. In 1989, Postbank merged with the NMB to form NMB Postbank Groep, which became one of the five largest Dutch banks of the time.

Merger and formation of ING Group

In 1991, the banking business of NMB Postbank Groep and the insurance business of Nationale-Nederlanden were merged to create the ING Group. The merger, completed on 4 March 1991, was made possible by the liberalization of Dutch financial law in 1990, which permitted cross-ownership between banking and insurance institutions. A decade prior, in 1981, Nationale-Nederlanden and Aegon rescued struggling regional mortgage banks, a move facilitated by the Minister of Finance and considered the first step toward lifting the ban on cross-sector mergers in the Netherlands.

The newly formed group adopted a bancassurance model, distributing Nationale-Nederlanden's insurance products through Postbank's extensive retail deposit base. The 1990 liberalization made the Netherlands a pioneer in bancassurance, and the rapid emergence of conglomerates like ING prompted the 1990 Protocol, which mandated strict cooperation and information exchange between banking and insurance supervisors. Aad Jacobs served as the group's first chairman, to integrate NMB's SME franchise, Postbank's mass retail deposits and Nationale-Nederlanden's insurance float.

International expansion and major acquisitions

Since its founding, ING Group has grown through a sustained program of acquisitions. Throughout the 1990s, ING broadened its asset management capabilities through the purchase of Parcom (1994) and Clarion (1998), and expanded in insurance through Wellington (1995), Equitable of Iowa (1997, for US$2.2 billion). By then, ING operated in 58 countries and was the Netherlands' largest insurer and third-largest bank. In 1998, ING sold its U.S. general insurance subsidiary, the Netherlands Insurance Group of Cos., to British insurer Guardian Royal Exchange Group for $775 million, while acquiring Guardian's Canadian insurance unit for $375 million.

Banking operations were also strengthened through the acquisitions of Furman Selz for US$600 million, and the gradual purchase of Dutch cash-management specialist Bank Mendes Gans, whose remaining shares ING acquired by 2000, when the company was delisted from the Amsterdam Stock Exchange. Separately, ING acquired Bank Brussels Lambert after launching a bid in 1997 valued at US$4.68 billion, with European Commission clearance granted in January 1998, establishing ING's leading position in the Belgian market. In 1999, ING took over the German BHF-Bank and Canadian Group Underwriters.

The early 2000s brought further geographic expansion: Aetna 's financial services and international units (for US$7.7 billion), and ReliaStar (for US$6.1 billion) (both 2000), Seguros Comercial América in Latin America (2001), and DiBa in Germany (2002). In 2004, ING added Alliance of Canada to its insurance portfolio and Rodamco Asia to its asset management operations. In the same year, it agreed to sell most of ING BHF-Bank to the German bank Sal. Oppenheim for €600 million, transferring €6 billion in risk-weighted assets and around 1,800 employees, while retaining certain assets under the name ING Bank Deutschland and selling the London branch to Deutsche Postbank.

Expanding its retail banking business overseas, ING used the direct banking business model it had developed with NMB Postbank to launch direct banking in other countries. The first of these was set up in Canada in 1997 as ING Bank of Canada, and was soon followed in several other countries including the US, UK, Germany, Spain, Italy, France and Australia. In July 2007, ING paid $1.3 billion for the Latin American pensions business of Banco Santander, becoming the region's second-largest behind BBVA and increasing Latin American funds under management to €35.5 billion.

By early 2008, ING Direct had grown to 20 million customers in nine countries, with €210 billion in deposits and close to €90 billion in mortgages, contributing about 7% of group profits in 2006. In 2008, ING acquired CitiStreet — an American retirement-plan and benefit administration company, with more than 14 million participants — from Citigroup and State Street Corporation for €578 million.

Barings Bank

The 1995 purchase of Barings Bank for a symbolic £ 1 after its dramatic collapse led to a boost in ING's wholesale and investment banking business. Barings was founded in 1762 by Francis Baring, a British-born member of the German–British Baring family of merchants and bankers, and was, after Berenberg Bank, one of England's oldest merchant banks.

In 1995, the 233-year-old bank collapsed after Nick Leeson — the 28-year-old head of Barings Futures Singapore — accumulated £830 million in catastrophic unauthorized losses on Nikkei 225 futures contracts, concealed in an error account. His positions were destroyed by the plunge in the Nikkei following the Kobe earthquake of 17 January 1995. Barings was declared insolvent on 26 February 1995 and Leeson was subsequently sentenced to six and a half years in a Singapore prison. ING acquired Barings for £1, assuming its liabilities and establishing ING Barings — gaining an investment-banking platform, international brand recognition and the historic Barings Archive. In 2001, ING sold the US operations of ING Barings to ABN AMRO for US$275 million. The Barings art collection and the charitable Baring Foundation remain based at ING's London office.

Acquisition of Oyak Bank

In June 2007, ING announced the acquisition of the Turkish bank Oyak Bank for US$2.673 billion, marking its entry into the Turkish market. Oyak Bank, founded in 1984, was among the ten largest banks in Turkey with a market share of around 3%. The bank had a total of 360 branches, 1.2 million active retail customers and 10,000 SME customers. In 2006, the bank reported a pre-tax profit of 165 million Turkish lira (€94.6 million), with total assets of 11.8 billion Turkish lira (€6.77 billion) and a book value of TRY 988 million (€566 million).

Capital injection and divestiture

In 2008, as part of the 2008 financial crisis, ING Group, together with many other major banks in the Netherlands, accepted a capital injection from the Dutch government (see § Government capital injection and state aid below). Following reports of alleged capital shortfalls, on Friday, 17 October 2008, ING's share price fell by more than 27%. ING also recorded a loss of €500 million in the third quarter of 2008, its first quarterly loss ever, and a reported net loss of €729 million for the full year. As a condition of Dutch state aid, the EU demanded changes to the company structure, including the sale of insurance businesses in Latin America, Asia, Canada, Australia and New Zealand, and ING Direct units in the US, Canada, and the UK. This included the sale of the ING Direct US operations to Capital One, ING Direct Canada to Scotiabank (doing business as Tangerine ), and the ING Direct UK operations to Barclays Bank in 2012. The spun-off insurance businesses in North America were renamed Voya Financial in 2014.

Origins of the ING logo

In 2009, Postbank and ING Bank were merged into a single brand, ING. The merger was completed in January 2009 under CEO Nick Jue. The rebranding officially launched on 10 February 2009, costing €890 million and 2,500 jobs, largely driven by Postbank's historical inability to sell complex, higher-margin financial products. In October 2009, ING announced that its insurance arm would again be separated from ING Group. In April 2016, ING sold the last shares in NN Group, making it exclusively a bank again.