Managing the Crisis – Behind the Ing's Division

Managing the Crisis – behind the ING's Division

Introduction

We choose to took into the consideration in our essay the way that ING Group had decided to solve its problems caused by the latest financial crisis. Our essay is divided in three parts. In the first section the history of the ING Group was presented with the emphasis on the merger of two kinds of financial activity: banking and insurance. The second part describes how the financial crisis affected the company. In the third part we elaborately described the process of dividing the ING Group into two separate companies – insurance and banking.

The ING Group is a global financial institution of Dutch origin offering banking, investments, assets management, life insurance and retirement services. It serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia. ING operates with a workforce of over 125,000 people in 45 countries. It owns also ING Direct, a virtual bank with operations in Australia, Canada, France, Italy, Spain, UK, US and elsewhere. So, ING is the one from the largest World's financial companies. The company is placed among the 20 largest financial institutions around the world and ranks in Europe's top 10 biggest financial entities. Additionally, in the 2009 Forbes Global 2000, ING was ranked as the eighth-largest company in the world.

The Group is trying to achieve financial growth both by providing new forms of banking and investment, such as online stock brokerages and online banking, and by investing in high-growth businesses and countries with growing economies. Since its establishment in 1990, ING Group has extended by numerous acquisitions, as well as by opening new branches of its existing businesses. In w very short time the ING has developed from a Dutch company with some international business to a multinational financial institution with only Dutch roots.

The Merger – a Sketch of ING's history

ING Group was formed in 1991 by a consolidation of two financial institutions: Nationale-Nederlanden and NMB Postbank Group. These two companies were well-established Dutch financial institutions those times. The Postbank was established in 1881 by the national government of the Netherlands as the Rijkspostspaarbank. After that it was privatized in 1986 and then in 1989 it merger with the NMB Bank into the NMB Postbank Group. It has 7,5 million private account holders and was one of the largest providers of financial services in the Nederlands. Meanwhile, the Nationale-Nederlanden was one of the largest insurance companies in the country. It was formed in 1962, by a fusion of the Assurantie Maatschappij tegen Brandschade De Nederlanden van 1845 and the Nationale Levensverzekerings Bank as response to a falling market share.

At the beginning of 90's in the Nederlands the legal restrictions on mergers between insurers and banks were moderated. This motivated the insurance company Nationale-Nederlanden and banking company NMB Postbank Groep to start negotiations about the prospective merger between these two groups. Afterwards it was proved that there was much more advantages with only few disadvantages. So the companies decided to fuse. The official brand of Group created by this merger was the Internationale Nederlanden Groep (ING). During the next 15 years that went by since the said partnership began, few rapid changes occurred and the regional company turned into a multinational financial service entity. Currently, ING's operations is targeting to numerous nationalities and is involved in many internationally-held activities. This was achieved through a mixture of dynamic growth, such as the creation of ING Direct from scratch, as well as various large acquisitions.

However, the roots of ING existence go up to the mentioned earlier companies: insurers De Nationale Levensverzekering Bank and De Nederlanden van 1845 and to the public bank services such as De Rijkspostspaarbank and De Postcheque- and Girodienst, as well as to the Nederlandsche Middenstands Bank. These are the legal precursors of ING, often called the "founding fathers" of Nationale-Nederlanden and NMB Postbank Group. A detailed orgin of the ING Group is presented in the graph below.

Graph 1 ING Group Pedigree ( source: www.ing.com )

Latest history of the ING Group is composed mainly of the acquisitions of financial institutions. In 1995 ING acquired investment bank and asset management firm Barings. This acquisition increased the brand recognition of ING around the world and strengthened its