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ING Pondering Future of Barings Unit

November 20, 2000|From Bloomberg News and Reuters

AMSTERDAM — Dutch financial-services firm ING Group over the weekend said it's considering selling or closing the U.S. unit of its investment bank, ING Barings, citing rapid consolidation in the industry and rising salaries as the largest Dutch financial-services company imposes stricter performance targets for its business units.

ING said it hired Goldman Sachs to review options for the U.S. unit, given its "limited market position" there. ING Barings' European business will be combined with the wholesale banking business in Western Europe, while the company will continue with its profitable emerging markets business in Asia, Central Europe and Latin America.

"If you ask me is selling [the U.S. unit] an option, yes, that's an option. Is closing it an option? Yes, that's also an option," said ING spokeswoman Jose Tijssen.

ING Barings' U.S. retreat comes three years after it bought New York-based brokerage Furman Selz for $600 million. The banking and insurance firm opted to try investment banking in 1995, when it bought London-based ING Barings for 1 British pound (about $1.50) after bets by derivatives trader Nick Leeson led to the firm's collapse.

Overall, ING said third-quarter profit rose 23%, led by ING's banking business after it bought Germany's BHF-Bank last year, but profit growth at ING Barings was "considerably subdued."

Operations such as ING Barings have found it harder to compete with bulge-bracket firms and invest the sums needed to keep up. The bulge bracket is a group of firms in an underwriting syndicate.

This year, U.S. brokerages Donaldson, Lufkin & Jenrette and PaineWebber have agreed to be bought by Credit Suisse First Boston and UBS Warburg, respectively, while J.P. Morgan was snapped up by Chase Manhattan.

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