Of Special Interest


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17th June 2011

Capital One wins bidding for ING Direct USA

Capital One has won the bidding for ING Direct USA. It is to pay a total of $9bn (€6.4bn £5.6bn ¥726bn Y58.3bn) for the unit of which $6.2bn is in cash and $2.8bn in stock. The deal will give ING a 9.9% stake in Capital One.

ING was required to dispose of significant assets by the European Commission as a remedy for the state aid received. Although it had some time to make this disposal it must have decided that it was better to end the uncertainty as soon as possible for all stakeholders.

ING will be bitterly disappointed by the price achieved. The unit had $77.7bn (€55.1bn £48.5bn ¥6,453bn Y509.4bn) of deposits at year end, almost twice its lending level. When the auction started prices exceeding $12bn were suggested as possible for the unit. A relatively small benefit to the ING income statement of $700m is expected. Whilst the capital release of $4.1bn will up Core Tier 1 by almost 1% to reach 10.1%.