In order to get approval from the EC on ING's Restructuring Plan, ING needs to divest ING Direct USA by the end of 2013. ING regards the operation as a very strong franchise and the US market offers potential for growth. It is anticipated that a divestment will take several years and will not be completed before the end of 2013. In the meantime, ING will ensure that it continues to grow the value of the business and offer a superior customer experience.
This WSJ article provides a nice summary of the reason behind this restructuring:
So now we know: the European Union really does mean business. ING Group has been forced into a much more radical restructuring than anticipated, as the price of compliance with the E.U.'s rules on state aid provided during the financial crisis.
I'm not sure why the EU is forcing ING to divest ING Direct USA. The US bank is sizable with over $90 billion in assets and almost $75 billion in deposits based on 6/30/09 FDIC data.
This shouldn't have any short-term effect on ING Direct. ING has four years to divest ING Direct. I assume it could be either a sale or a spin-off. The only worry I have is if they sell it to some mega bank.
When Bank of America acquired Countrywide, the effect on Countrywide Bank's online deposit products was major. Countrywide's SavingsLink was one of the best online savings accounts. The SavingsLink account was transitioned into Bank of America's Growth Money Market Savings Account which has monthly maintenance fees and fees for ACH transfers. And the rates are no longer competitive for online savings accounts. The transition did take time. Bank of America completed the acquisition of Countrywide on July 1, 2008. The SavingsLink account transition just occurred last September. If ING Direct is acquired by another bank, hopefully we won't see changes like what we saw at Countrywide Bank.
It's rare for ING Direct to offer the best rates, but they are usually fairly competitive with their deposit products. Every once in a while they do come out with a very competitive deal (like the 12-month CD special that just ended). Even though they don't usually have the best rates, they have a simple online interface, good customer service and no monthly maintenance fees (my latest ING Direct review).
Thanks to the reader who mentioned this news in the bank deals hub page.