What Happened to ING and Why It Was Sold to Capital One
Discover the journey of a global financial institution, revealing the strategic shifts and forces that redefined its operations and global presence.
ING Groep, a Dutch multinational banking and financial services corporation, was well-known in the United States for its direct banking arm, ING Direct. It gained popularity for innovative online savings accounts and distinctive orange branding. The sale of its US direct banking operation, ING Direct, reflects a broader transformation within the financial industry, influenced by global events and strategic shifts.
The Financial Crisis and ING’s Restructuring
The 2008 global financial crisis severely impacted financial institutions worldwide, including ING Groep. The company faced pressure due to its exposure to US mortgage-backed securities. To stabilize its financial position, ING received substantial state aid from the Dutch government.
In October 2008, the Dutch government provided a capital injection of €10 billion. This was followed in 2009 by further support to manage its illiquid assets. These measures aimed to reinforce the bank’s capital base.
The European Commission (EC) approved this state aid under strict conditions, requiring ING to implement a comprehensive restructuring plan. This plan mandated a significant reduction in the company’s activities and a clear separation of its banking and insurance operations. The EC also prohibited ING from acquiring other financial institutions and engaging in certain price leadership activities outside its home market. ING fully repaid the €10 billion bailout to the Dutch government by November 2014, including an additional €3.5 billion in interest and dividends.
The Sale of ING Direct
The divestment of ING Direct was a direct consequence of the restructuring required by the European Commission following the state aid. ING Direct USA, launched in September 2000, had grown to become the largest direct bank in the United States. By December 2011, it served over 7.6 million customers and held nearly $83.0 billion in deposits, recognized for its no-fee, no-minimum accounts and competitive interest rates.
An agreement for the sale of ING Direct USA to Capital One Financial Corporation was announced on June 16, 2011, and the transaction officially closed on February 17, 2012. The total consideration for the acquisition was approximately $9.0 billion, comprising $6.3 billion in cash and around 54 million Capital One shares, which gave ING a 9.7% ownership stake in Capital One. This acquisition significantly bolstered Capital One’s market position, making it the sixth largest depository institution and a leading direct bank in the United States.
Many customers expressed concerns about the transition, given ING Direct’s reputation for customer-friendly services. Capital One pledged to maintain the existing account features, including no-fee, no-minimum policies and competitive rates. As part of the sale agreement, ING Direct’s distinctive orange branding and name were gradually phased out, leading to its rebranding as Capital One 360 by February 2013. Beyond the US, ING also divested other direct banking units, such as ING Direct Canada, which was sold to Scotiabank for CAD 3.1 billion in 2012.
ING Groep’s Strategic Evolution
Beyond the high-profile sale of ING Direct, ING Groep underwent a broader strategic transformation. The company shifted its focus from a diversified conglomerate, encompassing banking, insurance, and investment management, to a more streamlined entity primarily centered on banking. This strategic realignment was a core component of the restructuring plan agreed upon with the European Commission.
A significant part of this evolution involved the divestment of its global insurance and investment management businesses. This included the separation of Nationale-Nederlanden, which became NN Group. ING gradually sold its remaining stake in NN Group, completing the divestment program by April 2016. Similarly, ING’s US insurance and investment management operations were spun off and rebranded as Voya Financial, which went public in May 2013. These divestments, alongside the sale of its Latin American and Asia Pacific insurance and investment management operations, aimed to reduce complexity, strengthen the company’s capital position, and sharpen its focus on core banking activities.
ING’s Current Global Presence
Today, ING Groep operates as a global bank with a robust presence primarily rooted in Europe. Its core businesses include retail banking, direct banking, and wholesale banking services. In its retail markets, ING provides a range of products such as savings accounts, payment services, investment opportunities, loans, and mortgages. For its wholesale clients, the bank offers specialized lending, corporate finance solutions, debt and equity market products, and treasury services.
ING maintains a significant geographic footprint, operating in over 40 countries worldwide. Its primary markets are concentrated in Europe, including the Netherlands, Belgium, and Luxembourg. The company consistently ranks among the largest banks globally, managing total assets exceeding $1 trillion. ING has also embraced digital transformation, investing in advanced technologies like artificial intelligence, blockchain, and cloud computing to enhance its service offerings and reach millions of digital banking customers.