ING Direct USA’s orange ball is NOT bouncing out of Wilmington, according to the bank’s CEO.
Addressing rumors the online bank is shutting down its headquarters here in Wilmington, CEO Arkadi Kuhlmann says that couldn’t be further from the truth.
A little background here, back in 2008, Netherlands-based ING Group received a $14 billion dollar bank bailout. In exchange for support from the Dutch nation, one of the conditions ING agreed to was to divest ING Direct USA by 2013, which means sell its shares.
“When there’s a change in ownership, there’s always some level of uncertainty, but that also depends a little bit about what the health of the business itself is. And, in that case, we’re actually a pretty healthy business,” said Kuhlmann. “It’s pretty clear to me that this will be a fairly smooth process. There’ll be new shareholdings that will basically want to carry on the mission.”
“In general for situations like this, the CEO, the divesting firm, and the acquiring firm have incentives to make good press in order to facilitate a relatively smooth changeover. In fact, banks acquired during the recent financial crisis have demonstrated both situations – sometimes the acquisition has been used to strengthen existing operations, whereas sometimes the acquisition has resulted in layoffs,” said Fred Bereskin, an Assistant Professor of Finance in the Alfred Lerner College of Business and Economics at the University of Delaware.
Just last month, 721 Wilmington Trust employees found out they would be out of a job when Buffalo-based M&T Bank takes over this summer, so it’s understandable people worry when they hear the words, “new ownership.”
Still, Kuhlmann describes morale among his associates as high and says his bank’s 14-hundred Wilmington employees need not worry.
“We love Wilmington, we love the riverfront… we’re looking for more employees.”
ING is the 15th largest bank and employs 24-hundred people nationwide, with about $9.5 billion in equity. Kuhlmann says there are a number of people interested in buying ING’s shares, although he wouldn’t say who; he did say the pool is small, since there aren’t too many people who can write a $10 billion dollar check.