Dutch bank ING is to sell its profitable direct banking arm in the US to Capital One for $9 billion in a combination of cash and shares.
Under the terms of the agreement, ING will receive $6.2 billion in cash and $2.8 billion in shares of Capital One, leaving the Dutch bank with a 9.9% stake in the Maclean, VA Bank. The combined entity will be the fifth-largest bank in the US by deposits.
ING Direct USA, was launched in September 2000 and has since become the nation's largest direct bank, with $57 billion in funds and $29 billion in mortgage approvals on its books. From its headquarters in Wilmington, Delaware, the 2,275 employees offer 7.7 million customers savings accounts, current accounts, mortgages and brokerage services.
The disposal of the unit, considered a prized asset in ING's international direct banking operations, was forced on the Dutch bank by the European Commission following its tax payer funded bail out during the financial crisis.
Jan Hommen, CEO of ING Group, says the bank will focus on further building its ING Direct operations in Canada, Spain, Australia, France, Italy, Germany, the United Kingdom and Austria, none of which are affected by the EC restructuring requirements.
Under the deal with Capital One, ING Direct USA will retain the "orange ball" branding, but will have to convert to the Capital One naming franchise following a one-year transition.