Dutch bank and insurer ING is likely to sell its Asian insurance business, worth about $7 billion, in several separate deals in an attempt to get the highest price and speed up the divestment process.
The company is also preparing to list its European and U.S. insurance units on stock markets.
ING, which got 10 billion euros ($12.4 billion) of state aid during the 2008 global financial crisis, is selling assets to meet conditions set by the European Commission for its bailout and to repay the Dutch government.
"The sales process for our insurance and investment management businesses in Asia is on track," chief executive Jan Hommen said today.
"For Insurance Europe, we are stepping up our efforts as we prepare for the base case of an IPO (initial public offering)."
A person close to the deal has told Reuters that Canadian insurer Manulife and AIA, Asia's No. 3 insurer, are the only bidders left in the race who want to take on the entire insurance unit - excluding ING's annuities business in Japan - but they have put in unattractive bids.
That means the most likely scenario is a three-way split of ING's insurance assets into Southeast Asia, South Korea and the attractive pieces of the Japanese business, a strategy which could net ING a higher overall price and which could speed up the divestment process.
While Hommen declined to give details about bidders or the bidding process for the Asian insurance assets, he said it was more likely they would be sold piecemeal. "You will see some units will go quicker than others, joint ventures take more time (to sell)...Certain things will go relatively quickly," Hommen told an analysts' conference call. ING on Wednesday reported lower-than-expected second-quarter results as its bank was hit by losses and provisions on loans, mainly in Spain and Greece, two countries at the centre of the euro zone debt crisis, and its insurance business was hurt by a weak performance in Belgium, the Netherlands and Luxembourg (Benelux). "As the euro zone crisis deteriorated, we accelerated our efforts to de-risk the investment portfolio at the bank, and brought down our Spanish exposure to reduce the funding mismatch in that country," Hommen said, adding that ING would continue to cut its exposure to Spanish debt. Net profit fell 22 percent to 1.17 billion euros ($1.45 billion), below the lowest estimate in a Reuters poll of analysts. Underlying pretax profit for banking operations fell 13 percent to 995 million euros, while ING's insurance business reported a 52 percent fall to 229 million euros. (C ) Reuters