ING Direct Canada May Be Sold

ING-DirectThe country’s #1 online bank brand, ING Direct Canada (ING), is apparently up for sale.

Its financially challenged Dutch parent, ING Groep NV, reportedly wants to divest of it to raise cash.

Officially, ING says it “may or may not” sell its Canadian operations. But the Globe reports that a deal could be announced by the fall, and could close as soon as year-end.

The Financial Post cites a source at Credit Suisse (CS) who speculates that Scotiabank or National Bank could be potential buyers. Other suitors might include a mega credit union looking to go national.

The CS analyst estimates that ING’s price tag could be north of $1.7 billion.

Chances are, any buyer would run ING as a separate operation, at least for a while. That would likely leave ING’s retail mortgage business unaffected for a period of time, perhaps with the exception of its pricing.

ING’s mortgage broker division is another question. This will put brokers a bit on edge as they wonder whether the new buyer will keeps ING’s broker offerings intact. If we were betting people—and we are—we’d wager that it would, since ING depends on brokers for a strong majority of its mortgages.

An ING contact said the company is not planning on making a statement to brokers. For the foreseeable future it is “business as usual.”

ing-canadaIdeally, a sale would also have no adverse effects on the company’s “unmortgage.” ING’s mortgages have some of the best features in the industry, with a 25% annual prepayment allowance, 120-day rate hold, great online access, skip a payment, discounted penalties, and great rate blend policy.

ING Direct Canada launched in 1997 and is Canada’s eighth largest bank by assets. It has 1,100 employees, $40 billion in assets and roughly 1.8 million clients. It earned about $117 million of profit last year, according to the Globe.

As of last year, ING reportedly held $31.5 billion in residential mortgages, a large portfolio for a bank its size. Most of its mortgages are insured.

Sidebar: Earlier this year, ING Groep NV disposed of its U.S. operation to Capital One for $9 billion.

Rob McLister, CMT

  1. How do you figure that? Maybe good to Brokers. Not so sure about Clients.
    – Market leading mortgage rates? nope
    – Conventional mortgages? nope
    – Open, interest only HELOC`s? nope
    – Best HELOC rates? nope
    They do have my respect though since they are marketing geniuses and built a solid and profitable business from scratch, backed up with excellent customer service.

  2. Where there is weakness in the market there is opportunity. Mortgage Broker’s are still the best way to arrange mortgage for consumers so this sale may make another lender with friendly broker ties stronger ie credit unions or National Bank. I just hope they keep their features the same since ING is as friendly as your going to get.

  3. INGs rates are no longer the best, they were a year ago, but not anymore, which is why they lost me as client.

  4. This is not good news! With the departures of FLM, Concentra, Macquarie and now ING Brokers have lost what accounted for nearly 40% of our business. It is time for Brokerages to really step up and fight, I don’t mean by offering a discounted interest rate at 60% of your commission either.

  5. You may want to check your facts before you post
    Market leading rates? YES on some terms
    Conventional mortgages? YES
    Open interest only HELOC? YES

  6. A common thread here is that the FI’s are making brokers a thing of the past. Or at least trying to. More and more brokers I know are becoming Bank BDM’s; It’s the new normal.
    Some non broker bank outfit can easily pony – up 1.8 billion;
    I miss working with brokers most of them were a fun bunch.

  7. ING’s website rates fluctuate but they’re usually .25-.35% higher than you can get elsewhere. Right now they’re great at 3.09% but you can almost always get a better rate through a broker.

  8. Why do so many people think that the buyer will be non-broker friendly? I heard 2/3 of ING’s mortgages come from brokers. I doubt the buyer would want to lose that volume.

  9. It would be a shame if ING is sold, first of all because it would go against its philosophy and in second place because a traditional bank will charge us traditional fees,,, not fun…

  10. Ivory tower
    I currently get top status with ING and I am getting 2.99% on a 5 year, 3.59% on a 7 year and 3.89% on a 10 year. So there are the facts on that subject.
    Now with respect to conventional mortgages. I am curious why you would post a link on collateral charges to back up your statement beacuase they are 2 totally different things. If you need to know the difference I suggest to pull out a text book called Understanding Mortgages 101 (Basic Edition)and that will explain the difference for you. In the end ING offers conventional mortgages.

  11. Banker99, well let’s review your supposed facts shall we. 2.99% on a 5 yr fixed is not marketing leading, it’s following since every Banker and Broker on main street is currently matching that for the asking and some are beating it.
    As for ING, your misinformed. They “ONLY” offer Colateral mortgages and not conventional standard charge mortgages. I guess when your only reference is your outdated Understanding Mortgages 101 (Basic Edition) textbook, you missed all the memo’s that ING sent out 8 months ago!

  12. I like how you are throwing the work “conventional” in front of standard charge. Ivory Tower it is either collateral charge or standard charge. Yes ING only offers collateral charges however as per your original post you said they do not offer conventional and as I said you are WRONG. As far as rates go, yeah I guess Xceed has them beat. Wow.
    Also nice comeback on the text book commnet. Did I not just read that on another post? Face it. You are wrong on 3 of your 4 posts. As I said originally check your facts. Check your facts. Check your facts

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