Scotiabank Buys ING Canada

August 30, 2012 by  

Scotiabank Buys ING Canada, Bank of Nova Scotia has agree to purchase ING Groep’s Canadian online bank for $3.1 billion in cash, taking advantage of a rare opportunity to grab market share in the crowded Canadian retail banking space. The asset, branded as ING Direct Canada, will bring 1.8 million customers, $40 billion in assets and $30 billion in deposits under the wing of Canada’s No. 3 bank.

Scotiabank also said it would issue 29 million shares at $52 each for total proceeds of $1.5 billion to help fund the deal. It said it would operate ING Direct as a separate entity.

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 Chief Executive Rick Waugh said in a statement the transaction would be accretive to the bank’s earnings in the first year after the deal is finalized.

“ING Direct will benefit form the backing of a strong stable Canadian shareholder with the additional resources to enable it to expand and grow,” he said.

Scotiabank said its actual net cost will be C$1.9 billion after deducting the excess capital levels currently at ING Direct.

Scotiabank also said its Basel III common equity tier 1 ratio will remain within its targeted range of 7 to 7.5% through the first quarter of 2013, meeting new standards that begin to take effect next year.

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