ING To Cut 7000 Jobs; Sees EUR 1 Bln Charges In Q4

(RTTNews) - Dutch banking firm ING Group NV (ING) Monday announced plans to cut around 7,000 jobs by 2021 mostly in Belgium and the Netherlands, as it aims to cut costs. The planned cuts represent around 13% of the bank's global workforce. The company expects to book a pre-tax redundancy provision of around 1.1 billion euros for the intended workforce reductions, of which 1 billion euros in the fourth quarter of 2016.

Under its Accelerating Think Forward programme, the initiatives are expected to deliver approximately 900 million euros or $1.01 billion in annual costs over the next five years.

The company further plans an investment 800 million euros from 2016 to 2021 in continued digital transformation.

In its statement, the company noted that of the planned job reductions, 3,500 will be in Belgium and 2,300 in the Netherlands. It also includes 950 positions employed by external suppliers.

In Belgium, the company plans to rationalise the network by integrating ING and Record Bank branches. In the Netherlands, ING will further optimise a number of business and support functions.

On a conference call, CEO Ralph Hamers reportedly told, "You have to announce these programs and these intentions at a time when you can afford them. We're strong right now, we have good results, we are growing and then you have to do the repairs, and not when you don't have any choice anymore."

Further, in line with its strategy, the company said it will be introducing financial targets for 2020. The company will maintain CET1 ratio above the prevailing fully-loaded requirement, currently 12.5%, with a leverage ratio above 4%.

The company's target for the cost/income ratio is 50-52%. In light of the continuing regulatory uncertainty, ING said it is not updating RoE target, currently 10-13% of ING Bank IFRS-EU equity, but reiterates intention to pay a progressive dividend over time.

Amidst record-low interest rates, stricter tighter regulation and ongoing sluggishness in economy, several European banks have been announcing restructuring plans.

German lender Commerzbank AG last week said it would cut almost 10,000 jobs, stop paying dividends for the time being, and merge two big units as part of a restructuring to become profitable on a sustainable basis by 2020. In the Netherlands, ABN Amro Group NV is planning to cut more than 1,000 jobs.

In Amsterdam, ING shares were trading at 10.97 euros, down 0.23 percent.