Dutch bank and insurer ING Group NV (ING) announced Wednesday that its profits were down 26% after a writedown of $701 million on its U.S. insurance division. Net profit was $507 million (371 million euros), down from last year’s $682 million (499 million euros), after the writedown.
ING had been bailed out to the tune of $13.7 billion in 2008; it still owes half of that. The Dutch state also took over most of its subprime mortgage-backed security exposure. Part of the agreement with regulators calls for the company to divest itself of its insurance operations, which it plans to do in two separate parts.
Jan Hommen, ING’s chief executive, said in a statement, "We are going to prepare ourselves for a base case of two IPOs for our insurance businesses: one Europe-led IPO with solid cash flow combined with strong growth positions in developing markets, and one separate U.S.-focused IPO with a leading franchise in retirement services."
Its banking division did well, the company said in its report, with an underlying profit of $1.4 billion; that was up from $342 million last year. The insurance division’s operating profit was $646 million, up from $537 million, according to Hommen, because of better investment returns and higher fees.
Another writedown is coming in Q4, this time on annuities to the tune of $1.366 billion.