Dutch bank ING is designing a shared network and IT services infrastructure for its global banking operations, as it prepares to separate its insurance operations from the main business.
The company was last year ordered by the European Commission to separate its banking and insurance operations, having taken on a €10 billion capital injection from the Dutch government. It had also initiated a cost cutting and simplification programme, called Back to Basics, after it plunged to a loss the year before.
As the company, whose UK offices are based in Reading, today reported a stronger than expected net profit of €1.1 billion (£911 million) for the second quarter this year, it said it was making “good progress” on the operational separation and outlined work on the scheme for the next three years.
ING chief executive Jan Hommen told investors that the two businesses will operate “on an arm’s-length, stand-alone basis” by the end of the year. “We currently have 1,100 projects underway worldwide, with separation costs estimated at €110 million to 150 million for 2010, of which €30 million was taken in the first half,” he said.
All of the project teams are “in place” and the key issues have been “identified”, he said, with the final separation being planned and designed. By the end of the year, there will be interim solutions for each business in place, he said, with “ring fencing” where necessary to ensure their operational separation.
Between 2011 and 2013, permanent IT solutions will be in place in each business, looking to improve their performances by introducing global shared services for each, as well as shared network infrastructure, datacentres and servers.
Under the Back to Basics cost cutting programme, the bank has been reorganising IT and processes, and cutting staff. Costs fell another three percent to €2.2 billion in the quarter.
Last year, ING signed a large contract with Atos Origin to help set up a “simplified” IT infrastructure. The services company also provides applications, system integration, consultancy and back office processing services.
Find your next job with computerworld UK jobs