The bank will book a pretax redundancy provision of 320 million euros ($398 million) in the fourth quarter, ING said in a statement today. The firm, which has 53,000 staff, said the cuts will occur over the next three years and lead to annual gross savings of about 270 million euros from 2018.
ING, which received a 10 billion-euro bailout in 2008, plans to expand digital banking, strengthen local advisory capabilities at branches and make
additional IT investments in Dutch retail banking as it cuts staff in back offices, call centers and at the retail bank’s headquarters. The announcement comes less than two weeks after state-owned ABN Amro Group NV said it will cut as many as 1,000 jobs by 2018 and shrink its branch network as customers move to banking on their phones.
If you look at how a bank has been built, “basically it has been bricks laid upon each other,” Chief Executive Officer Ralph Hamers said in an interview with Bloomberg Television. “What you need to do is that you have to take those all out and basically replace them by one and the same.”
“Unfortunately, the more efficient way of working will impact many of our employees,’... Read More
Boosting Efficiency
“Despite the cost we believe this is a necessary and positive value-enhancing plan,” Cor Kluis, an analyst at Rabobank Groep in Utrecht said in a note today. “ING Group is able to look forward and make the necessary investments to reduce future expenses, and improve the service of the Dutch clients resulting in more future revenues.”Hamers said last month a further reduction of complexity was needed for its Dutch and Belgian operations to catch up with its direct bank elsewhere in Europe, which have offered online services without branch networks.
ING, based in Amsterdam, will invest 200 million euros in its IT systems. As part of the review announced today it will also reduce the number of positions employed by external suppliers by 1,075.
“This investment in upgrading their IT systems will take out some legacy and will help reduce the cost-income ratio in the Dutch operations to about 45 percent by 2018 compared to 51 percent in my earlier estimates,” JanWillem Knoll, an Amsterdam-based analyst at ABN Amro, said by phone.
“Unfortunately, the more efficient way of working means we will need fewer people,” Hamers said.
For Related News and Information: ABN Amro to Cut Up to 1,000 Jobs in Consumer Bank by 2018 Rabobank Groep May Cut Up to 2,000 Jobs at Dutch Operations
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