ING to Cut 2,400 Jobs; Quarterly Profit Misses Estimates

PARIS â€" The ING Group, the largest Dutch bank, said Wednesday that it would cut 2,400 jobs in its retail banking business as more of its customers adopt mobile banking.

The bank, based in Amsterdam, also posted a fourth-quarter profit of 1.4 billion euros, or $1.9 billion, up 21 percent from the year-earlier as the bank booked onetime gains on asset sales. The figure missed the 1.6 billion-euro estimate that analysts surveyed by Reuters had expected.

Without the divestments, the fourth-quarter profit would have been a more modest 373 million euros, ING said.

With the announcement Wednesday, ING has announced about 7,500 job losses in just over a year, shrinking its work force by about 9 percent, said Frans Middendorff, an ING spokesman.

The bank said it was booking the costs of the latest round of restructuring in 2012, with an after-tax charge of 452 million euros. The cost-cutting measures, it said, “are essential to drive future performance, reducing annual expenses by a comined 1 billion euros by 2015.”

In a presentation to investors, the bank showed that in just five years, the number of mobile and Internet banking transactions at its Dutch retail unit had soared, growing from a level about 32 percent greater than traditional branch transactions in 2008, to more than 400 percent greater last year.

“We have made great progress in improving service and investing in IT as customers move swiftly towards mobile banking,” Jan Hommen, the ING chief executive, said in a statement. “As our business model evolves, so must our organization.”

As a result of that shift, Mr. Hommen said, the Netherlands retail banking unit will reduce its work force by about 1,400 employees by the end of 2015, saving 120 million euros a year beginning in 2016. ING Bank in Belgium will cut another 1,000 employees by 2015, “through natural attrition,” rather than layoffs, something it said would save it 150 million euros a year.

Mr. Middendorff said that there wo! uld inevitably be layoffs at the Dutch retail unit, but said it was impossible to estimate how many until the other reductions take place over the next three years.

ING’s fourth-quarter results included a total of 1.6 billion euros of one-time gains from its divestments. It booked a gain of 1.1 billion on the sale of ING Direct Canada, and another 745 million euros on the sale of Insurance Malaysia. It booked a loss of 244 million euros on the sale of ING Direct UK to Barclays, a deal that is expected to close before the end of June. It also began preparing last year for the long-delayed initial public offering of its ING U.S. insurance business.

ING was bailed out by the Dutch state after the Lehman Brothers shock of 2008; it said it had reached a deal with the European Commission to gain “more time and greater flexibility for restructuring,” even as it repaid the government 1.1 billion euros and paid down debt.

ING also noted that with the nationalization this month of SNS Reaal, it and other Dutch banks would be required next year to contribute to a special onetime levy of 1 billion euros. It said that it expected to book a charge of 300 million to 350 million euros on its share of the costs.