ING bank eliminates £1.3bn costs with operational overhaul

ING has cut €1.5 billion (£1.3 billion) from annual costs, after reorganising its IT and other operations, and streamlining processes.

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ING warned that 2010 would be a “challenging” year as it works on the huge project to separate the two businesses’ operations.

In the three months to 31 December, ING repaid €930 million worth of the state loan it had received from the Dutch government a year ago. As the bank announced losses of €712 million (£621 million) for the quarter, chief executive Jan Hommen said the programme “has helped make ING a more efficient and less leveraged institution with a lower risk profile”.

“The first phase of our Back to Basics programme, which we launched at the beginning of last year, has been successfully completed with all targets exceeded,” he said, adding that alongside risk reduction the programme had “helped make ING a more efficient and less leveraged institution”.

In June last year, the bank said: “Ultimately, the revised strategy intends to create a more customer focused culture, a smaller portfolio of businesses, a simplified business model, clear products and efficient processes.”

Nevertheless, ING noted that separating the banking and insurance divisions was posing “challenges”. But as the work went on, he said, ING would continue to work to “improve the performance of both parts of the business ... by rationalising our product offering, simplifying our processes and investing in further improvements in customer service”.

ING vowed to press ahead with the work, which it said was the “right strategy”. But it said it was “appealing the proportionality of this agreement in the context of a level playing field in Europe”.

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