Scotiabank to acquire ING Bank of Canada
TORONTO-- Scotiabank has reached a definitive agreement to purchase ING Bank of Canada (ING DIRECT) from Netherlands-based parent ING Group for $3.126 billion in cash, which is expected to result in a net investment by Scotiabank of approximately $1.9 billion after deducting the excess capital currently at ING DIRECT. This acquisition is subject to regulatory approvals. The Bank is also announcing a public offering of 29 million common shares at $52 on a bought deal basis for gross proceeds of $1,508,000,000 to fund the acquisition.
"ING DIRECT has had proven success in meeting the needs of those Canadians who are not looking for the added services, advice and relationships provided by traditional banking channels. We recognize that success and are committed to keeping this unique platform," said Rick Waugh, President and CEO of Scotiabank. "ING DIRECT will benefit from the backing of a strong, stable Canadian shareholder with the additional resources to enable it to expand and grow. This in turn will provide our shareholders with a new source of incremental earnings beginning in year one, and a new deposit base to further diversify our funding."
With approximately $40 billion in assets, $30 billion in deposits, 1.8 million customers, and over 1,100 employees, ING DIRECT is the 8th largest bank in Canada. It is a direct bank that serves customers online, via contact centres and mobile devices, offering savings, chequing, mortgages and four mutual funds. It has five ING DIRECT Cafés and no physical branches. ING DIRECT has a strong mortgage portfolio with 59% of mortgages insured and an average loan-to-value ratio on uninsured mortgages of 53%. Credit quality is high with provisions for credit losses below 0.02%.
"Scotiabank is committed to preserving what ING DIRECT's customers have come to love about it," said Anatol von Hahn, Group Head of Canadian Banking at Scotiabank. "ING DIRECT will continue to operate separately and customers will be able to interact the way they do now using their existing account numbers and passwords, served by the same familiar team."
"Scotiabank is a strong, Canadian-based and diverse multinational bank that values the impact ING DIRECT has had on the lives of Canadians over the past 15 years," said Peter Aceto, President and CEO of ING DIRECT. "With their backing and commitment to maintaining what has made ING DIRECT special, I have great optimism for the future for our fantastic employees and our loyal customers."