Canada's Condominium Magazine
Since 1997, ING Direct’s message to Canadians has been simple, consistent and fittingly direct: “Save your money.” It’s a message that obviously resonated with Canadian consumers: ING grew to be Canada’s eighth largest bank, with $40 billion in assets, in just fifteen years. Now, with the news that Canada’s third largest bank, Scotiabank, is taking ING over, customers of the no-frills, Netherlands-based Internet bank might wonder if benefits like no-fee chequing and high-interest savings accounts that attracted them to ING in the first place will be lost.
Scotiabank says no. Anatol von Hahn, head of Scotiabank’s Canadian banking, said that ING’s “proven, successful formula,” which took the bank to its present position in Canada, “won’t change.” The ING branding will remain for at least a year before its new owner decides on a new name, which, according to Hahn, is “99.9 per cent” unlikely to have Scotiabank in it.
The ING DIRECT branding will be maintained under licence and any future branding will reflect the type of experience that customers receive now.
ING has 1.8 million customers in Canada, and the parent company, ING Groep NV, is the largest financial services and insurance conglomerate in the world, and the twelfth largest corporation in the world, by revenue. It has 85 million customers in 45 countries. ING Direct, according to the Financial Post, has been growing its customer base in Canada at the rate of 100,000–120,000 a year in the past two years. Scotiabank intends to continue that growth, essentially letting ING continue to operate as a competitor.
More choice for mortgage borrowers?
ING Direct has been contemplating offering more mortgage products, for instance. The company already has about $29 billion in residential mortgages on the books, and the CEO of ING Direct, Peter Aceto, said that they were “optimistic” about their ability to provide enhanced mortgage services, and that customers are becoming more and more comfortable with doing business “in a direct way.” ING has no bricks and mortar branches but operates entirely online. And this plays to the younger crowd who want to do more things on the Internet. Aceto says that ING’s customers have the highest household net worth of any Canadian bank.
If the deal goes ahead, Scotiabank will become the second largest mortgage lender in Canada.
The sale of the Canadian operation by ING Groep NV is part of the Dutch banking giant’s global strategy. It is also selling its UK and Asian operations as it raises cash to repay the Dutch government, which provided 10 billion euros ($10.23 billion) bailout aid in 2008.
Before the takeover can go ahead, the offer has to be reviewed by the Superintendent of Financial Institutions, who will then advise the Minister of Finance, who will make the decision. It could be finalized by December.