ING Groep NV agreed to pay €775 million to settle an investigation by the Dutch Public Prosecution Service into requirements for client on-boarding and the prevention of money laundering and corrupt practices.

Of the amount, €675 million was intended as a fine and €100 million was for disgorgement, to be recognized in the group's third-quarter results as a special item, ING said.

The bank acknowledged "serious shortcomings" in its implementation of customer due diligence policies to prevent financial economic crime at ING Netherlands between 2010 and 2016 that were identified in the probe. These lapses have led to the termination of thousands of ING's client relationships but have also allowed clients to use their accounts at ING Netherlands for money laundering, among other things, for a number of years.

The investigation did not find evidence of former employees aiding clients in potential criminal activities or receiving personal gains. However, ING said it has taken measures against a number of former employees in senior management positions with broader responsibility for executing the said policies in the Netherlands. These measures include holding back bonuses and suspension of duties, ING noted.

The bank also initiated various initiatives at ING Netherlands to further strengthen its compliance risk management, including implementing programs aimed at improving employees' internal compliance culture and awareness and enhancing their adherence to "know your customer" and client activity monitoring requirements.

In addition, members of ING's executive board — headed by CEO Ralph Hamers — have agreed to forgo their 2018 bonuses.

ING noted that it received information requests from the U.S. Securities and Exchange Commission. "ING expects that this matter will also be resolved with the SEC without further payment or the imposition of further conditions," it said.