A big bank in the Netherlands, one that received a bailout in 2008, is dismantling its far flung and complex operations to focus on core banking and lending operations. The bank is also shedding 1,700 human jobs and at the same time investing €320 ($248) million to improve human-less banking technology.
ING Groep announces job cuts
The one-time expansive Dutch financial services company, ING Groep NV (ADR) (NYSE:ING), announced Tuesday it would cut jobs in back office, call centers and information technology departments and boost investment in mobile and online banking technology. The company is expecting to save €270 million per year starting in 2018 and it is taking a one-time charge of €320 million in the fourth quarter for restructuring.
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The job reductions and focus on human-less banking come as similar moves in retail banking are occurring at major European firms such as ABN Amro, which cut 650 to 1,000 full times jobs by 2018 and invested €150 million to improve its online and mobile banking services. Other firms to make similar moves include Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) and Royal Bank of Scotland Group PLC (NYSE:RBS) (LON:RBS).
“In today’s digital world, change is a constant factor,” Ralph Hamers, the ING Groep NV (ADR) (NYSE:ING) chief executive, was quoted as saying in a statement. “Customers are using a range of channels for their banking needs. They expect to do their banking the way they want, when they want and in a consistent, reliable, clear and easy way. In this environment we need to continuously improve our service.”
ING Groep focusing on traditional banking
In the wake of receiving billions in government aid during the financial crisis, the New York Times noted that the Dutch bank is moving to become a much smaller company with a primary focus on traditional banking.
As the company recently made its final repayment on government bailout aid, six months earlier than expected, the company had already spun off a number of business units.
In 2013, ING began the process of shedding itself of Voya Financial Inc (NYSE:VOYA), its one-time United States business, through an initial public offering. ING Groep NV (ADR) (NYSE:ING) plans to entirely remove itself from ownership interest in the company by the end of next year. In July, ING brought in €1.5 billion by exiting non-core banking operations in insurance and investment management through the initial public offering of the NN Group. The company also sold its online bank in the unites states to Capital One Financial Corporation.