Scotiabank buys ING Direct Canada for C$3.1 billion
By Cameron French and Euan Rocha
TORONTO (Reuters) - Canada's No. 3 lender Bank of Nova Scotia (BNS.TO: Quote) agreed to buy ING Groep's ING.AS Canadian online bank for C$3.1 billion ($3.14 billion), taking advantage of a rare opportunity to grab market share in the country's crowded retail banking space.
The online bank, branded as ING Direct Canada, will bring 1.8 million customers, C$40 billion in assets and C$30 billion in deposits under the wing of the bank commonly known as Scotiabank.
Amsterdam-based ING put the unit up for sale earlier this month as part of a series of planned asset divestments to raise funds to repay a Dutch government bailout from the 2008 financial crisis.
Scotiabank will pay cash for the Canadian unit and said it will issue 29 million shares at C$52 each for total proceeds of C$1.5 billion to help fund the deal.
After deducting excess capital levels currently at ING Direct, Scotiabank's actual net cost will be C$1.9 billion, it said, adding that the takeover will be accretive to Scotiabank's earnings in the first year after closing, which is expected by the end of the year.
It also said its Basel III common equity tier 1 ratio will remain within its targeted range of 7 to 7.5 percent through the first quarter of 2013, meeting new standards that begin to take effect next year.
"SAVE YOUR MONEY"
Earlier this month, the Dutch bank said it expected a quick sale of parts of its $7 billion Asian insurance business, and it is also preparing to list its European and U.S. insurance units on stock markets as part of its restructuring. Continued...