Dutch banking group ING has announced the sale of its Russian subsidiary, ING Bank (Eurasia) JSC, to Global Development JSC, marking the company’s withdrawal from Russia after three decades. The agreement, subject to regulatory approval, is expected to be completed in the third quarter of 2025.
The deal transfers ownership of ING Bank (Eurasia), including all operations and staff, to Global Development, a Moscow-based company owned by a financial investor with expertise in factoring services. Under the new ownership, the bank will rebrand and continue serving corporate clients in Russia.
“This transaction will effectively end ING’s activities in the Russian market,” the bank stated, underlining its complete departure from the country.
ING’s Three-Decade Presence in Russia
Founded in Moscow in 1993, ING Bank (Eurasia) primarily focused on serving corporate clients within Russia. Its exit signals the conclusion of a long-standing presence in a market that has become increasingly complex due to geopolitical tensions.
ING ceased all new business operations in Russia following Moscow’s invasion of Ukraine in February 2022. Since then, the bank has gradually reduced its involvement, including significant steps to separate the Russian subsidiary from its global network and systems. ING has reported a 75% reduction in lending exposure to Russian clients over the past three years.
The remaining offshore exposure to Russian clients, booked through ING entities outside of Russia, amounted to €1.0 billion as of 30th September 2024, with half of this amount covered by export credit agency (ECA) or credit and political risk insurance (CPRI). ING plans to continue reducing this exposure following the sale.
Financial Implications
The transaction is projected to result in a post-tax loss of approximately €700 million. This figure includes:
- A book loss of €400 million, representing the difference between the sale price and the book value of ING Bank (Eurasia). This loss is expected to impact ING’s Common Equity Tier 1 (CET1) ratio by approximately 5 basis points.
- Currency translation adjustments of €300 million, linked to past exchange rate movements, will be recycled through the profit and loss statement but will not affect the CET1 ratio.
Despite the financial impact, ING remains well-capitalised, with a strong CET1 ratio and resilient net profit.
The Buyer: Global Development JSC
Global Development JSC, the buyer of ING Bank (Eurasia), is described as a little-known local entity with expertise in factoring services. The company, owned by a Moscow-based financial investor, has indicated its intention to continue operating the business under a new brand.
Details of the agreement, including the sale price, remain undisclosed. The deal follows a period of “extensive due diligence,” reflecting the regulatory and operational complexities of divesting in Russia.
ING’s Broader Strategic Shift
ING’s departure from Russia aligns with its broader strategy to streamline its operations and reduce exposure to high-risk markets. The bank’s decision also mirrors a trend among Western financial institutions, many of which have scaled back or exited Russia following the invasion of Ukraine and subsequent sanctions.
By exiting the Russian market, ING reinforces its commitment to complying with international sanctions frameworks and addressing geopolitical risks.
The sale of ING Bank (Eurasia) marks the end of a 30-year chapter for ING in Russia. While the bank will incur significant financial losses as part of the transaction, it enables ING to fully disengage from a challenging market and focus on its core strategic priorities.
For Global Development JSC, the acquisition represents an opportunity to establish a stronger foothold in Russia’s corporate banking sector, albeit under a new brand.
The transaction, expected to close later this year, underscores the broader reshaping of financial markets in Russia, as local entities take on roles vacated by departing Western institutions.
Main Image: CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=90030441
