ING Group (ING +0.1%) will record a €1.2B charge after agreeing on a deal to end its payment obligations to its pension fund in the Netherlands. €400M of the Q1 charge is a payment to the fund, while €800M is related to the removal of pension assets on the bank's balance sheet.
ING is prepping an IPO of its insurance unit this year, and the deal marks "a significant milestone in the separation of bank and insurance," says CEO Ralph Hamers.
“It’s a sizable charge that will eliminate quarterly profit, which is unfortunate,” says ABN Amro's JanWillem Knoll. “Still it’s the right thing for them to do as it releases them of all obligations related to a large back book that can cause significant financial volatility.”
The stock initially fell in Amsterdam trade this morning, but has recovered into the green.