ING Group is divesting its insurance-investment management activities in the Philippines in favor of Ayala-controlled Bank of the Philippines Islands (BPI) for an undisclosed sum.
According to the Dutch-owned global financial services firm, its Philippine operations handle P78.4 billion worth of investments.
An agreement was reached with BPI after ING decided to separate its banking and insurance-investment management businesses as part of a commitment with the European Commission in October 2009 wherein it promised to divest its insurance or investment management business by or before 2013, ING said in a statement.
BPI is one of the country’s largest banks in terms of market capitalization and the second largest in asset management and trust handling P458 billion as of end-September.
A non-disclosure agreement was part of the deal as both parties decided not to divulge the transaction’s amount.
With the divestment, ING — through ING Bank Manila’s trust department — can no longer engage in investment management activities in the Philippines, as trust and investment management must operate under a trust license.
ING believes its management activities in the Philippines would continue to prosper under the strong team of BPI, the Dutch firm said.
With ING Bank still in the country, ING said it “will continue to focus on its strong franchise in financial markets, lending and syndications, structured finance and corporate finance."
ING booked a net income of P1.134 billion as of end-September, an amount that is close to its P1.136-billion full-year income in 2009.
Philippine offshore branch
ING established a Philippine representative office in 1990 which was converted into an offshore branch in 1991. It received its commercial banking license in 1995 and became the first foreign bank upgraded to a universal bank in 1996.
It received its trust license from the Bangko Sentral ng Pilipinas in 1998.
The Dutch-based group got a €10-billion capital injection in late 2008 from the Dutch government, of which €5 billion has been repaid after a year from the proceeds of a stock rights issue.
Part of the deal with the European Commission was for ING to separate its banking and insurance-asset management and to divest the latter by 2013. — VS/JE