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ING to cut 7,000 jobs over 5 years

ING GroepNV is looking at accelerating restructuring plan Think Forward by increasing itsinvestment in digital platforms and increasing efficiency.

From 2016 to 2021, the Dutch lender intends to invest €800million in its digital transformation. CEO Ralph Hamers noted that the programis expected to generate about €900 million of annual cost savings by 2021, butwill also lead to a workforce reduction, primarily in the Netherlands andBelgium.

ING intends to move to an integrated banking platform in theNetherlands and Belgium. INGBelgië NV will be transformed into an omnichannel bankingenvironment through its integration with Record Bank SA. ING said it will work toward a modelbank with one retail strategy and a "harmonized" retail propositionin its challenger markets.

"It is inevitable that the various measures andintentions announced today may have a significant impact on many of ourcolleagues," said Hamers. The CEO noted that over the next five years,some 7,000 positions may be impacted, including 950 positions employed byexternal suppliers. He added that while the plans are not finalized, theintended initiatives will likely reduce the bank's staff by about 3,500full-time employees in Belgium and approximately 2,300 in the Netherlands. INGwill add staff in parts of its business where it expects to increase growth,Hamers added.

For the intended staff layoffs, ING expects to book a pretaxredundancy provision of €1.1 billion, of which €1 billion is expected in thefourth quarter.

Hamers said ING's financial targets for 2020 foresee itmaintaining its common equity Tier 1 ratio above the prevailing fully loaded requirement,currently 12.5%, with a leverage ratio above 4%. ING is targeting acost-to-income ratio of 50% to 52%.

"In light of the continuing regulatory uncertainty, weare not updating our ROE target … but we reiterate our intention to pay aprogressive dividend over time," said Hamers.