ING is to incorporate its Real Estate Investment Management (REIM) unit into its Commercial Banking division, not the Insurance arm as announced last year, the Dutch financial services group revealed at its 2009 earnings presentation on Wednesday. The decision means that the REIM unit will now fall under the Banking division along with the Real Estate Development and Finance activities.
ING is to incorporate its Real Estate Investment Management (REIM) unit into its Commercial Banking division, not the Insurance arm as announced last year, the Dutch financial services group revealed at its 2009 earnings presentation on Wednesday. The decision means that the REIM unit will now fall under the Banking division along with the Real Estate Development and Finance activities.
The move is effectively a reversal of the group's announcement in April 2009 that ING REIM would be integrated with ING Investment Management, which falls under Insurance, as part of the wider planned split-up of the group's banking and insurance activities. ING's CEO Jan Hommen told PropertyEU that the move had nothing to do with a possible sale of the group's real estate activities. 'We want the split-up of ING Group - as agreed with the European Commission - to be carried out in an orderly and transparent way. We will take our time to do that, at least the whole of the coming year, in order to get the best deal and to create maximum value for our shareholders.’
In a statement issued early on Wednesday, ING said the transfer of ING REIM to ING Investment Management would have added complexity from an organisational, legal, financial and risk perspective 'at a time when the disentanglement of banking and insurance needs to be the priority'.
ING booked writedowns of EUR 558 mln on its real estate and development portfolio in the fourth quarter of 2009, down from EUR 608 mln in the year-earlier period. As a result, ING Real Estate posted a loss of EUR 310 mln in the final quarter, against EUR 248 mln in the same 2008 period. The group sold direct property assets worth EUR 800 mln in the three months to end-December 2009, valuing the total property portfolio at EUR 13.1 bn at year-end. Of this, ING Real Estate’s portfolio accounted for EUR 7.7 bn, compared with EUR 9.8 bn at end-2008.
Over the whole of 2009, ING Real Estate saw losses widen to EUR 1.4 bn from EUR 297 mln in 2008. Development booked a full-year loss of EUR 470 mln. The total development portfolio was valued at EUR 2.5 bn at end-2009, compared with EUR 3 bn a year earlier. Real Estate Finance booked a profit of EUR 181 mln in 2009, while Real Estate Investment Management also ended the year in the black, posting a profit of EUR 73 mln
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