ING Direct, Canada’s number one online bank, may be up for sale. It's a surprising turn of events following news that its Dutch parent company, ING Groep NV, may be strapped for funds.

Back in June, we reported on Moody’s downgrade for ING Bank of Canada’s senior deposit rating. The move followed rating cuts to the online bank’s Dutch parent company due to elevated interest rate risk based on the lender’s reliance on interest revenues and other products not based on bank deposit wealth.

On The Chopping Block?

Look’s like things haven’t taken a turn for the better. Reportedly dogged by decreasing margins and bad loans, it appears the Dutch bank is considering the sale of its Canadian arm (along with its U.K. operation) in order to bring its balance sheet out of the red. The bank is also in the process of paying back a 3-billion Euro loan from the Dutch government, doled out during the financial crisis in 2008.

The news is not yet official, as ING remains vague on whether it “may or may not” sell, but word is that a deal could be made official by Fall 2012 – and this has piqued the interest of competing Canadian banks looking to scoop  ING up to the estimated tune of $1.7 billion, according to Credit Suisse. So far, rumoured potential suitors include National Bank, and Scotiabank. A big draw is the consistent nature of ING’s client base, as the majority of their customers use the bank for long-term deposits. For a bank looking to stabilize its own deposit base, this is seen as a very attractive addition.

What It Means For Mortgages

Launched in Canada in 1997, ING is the 8th largest bank in Canada with 1.8 million customers, and known for its stance as an alternative to the Big 5 Banks. It’s also known for innovative products such as high interest saving accounts and no-fee chequing accounts as well as RRSPs, GICs and TFSAs. It also provides mortgages, notably their “Unmortgage”, which offers great features like 120-day rate holds, a 25% annual prepayment allowance, skip-a-payment options as well as discounted penalties.

It’s speculated it’s likely the absorbing bank would leave ING’s mortgage arm untouched for the time being. Things aren’t so sure regarding the broker division though, as the big banks’ interest in broker business is decreasing, (as seen when CIBC sold its FirstLine Mortgages branch). In the meantime, though (and seeing as they’re remaining coy on whether a sale is an actuality), ING has stated that they will not be making a statement to their brokers and that it’s “business as usual” – for now.

Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

Recent News Articles
Free Rent? Tenants Have Options as Landlords Offer Incentives
The COVID-19 pandemic has upended Canada’s rental market, driving landlords to boost incentives and offer renters perks to help fill their available units.
How COVID-19 is Driving Mortgage Refinances
Hundreds of thousands of Canadian households are still not paying their mortgages, by agreement with their lender.
Big Decision for Toronto Condos: Rent or Buy?
Toronto house prices may be climbing, but rents are plunging. And they have been since the start of COVID. Does that make it more financially sensible to rent or buy?